The ambitious plan proposed by John Thune, the incoming Senate Majority Leader, to address President-elect Trump’s agenda is expected to encounter major challenges due to internal disagreements among Republican senators regarding strategy and policy.
There is widespread Republican support for swiftly advancing a budget reconciliation bill that would allocate funds for completing the U.S.-Mexico border wall, expanding the Customs and Border Protection workforce, and improving the capacity to manage migrant flows at the border.
Additionally, Republicans largely agree on including measures to bolster domestic energy production in the initial budget proposal. However, Thune’s suggestion to move a substantial portion of discretionary defense spending into mandatory spending has sparked concerns among some Appropriations Committee members and fiscal conservatives, who worry about its impact on the federal deficit.
Senator Brian Schatz questions the feasibility of passing defense spending changes with slim margins
Senator Susan Collins, the incoming Appropriations Committee Chair, expressed reservations, citing the potential for bypassing the committee’s oversight and exacerbating fiscal challenges.
The inclusion of increased defense spending in the reconciliation package may also face opposition from House conservatives focused on controlling Pentagon expenditures. Senator Brian Schatz warned that securing enough votes for such a move would be highly unlikely given the slim margins in both chambers of Congress.
Debates among Senate Republicans extend to the all in all scope of the first reconciliation package. While some advocate for focusing on border security, energy, and defense, others push to incorporate broader policy reforms from the House-passed Secure the Border Act. Certain conservatives argue that tightening asylum laws or implementing other immigration reforms could have major budgetary implications, potentially satisfying reconciliation rules.
Republicans are also divided on whether to prioritize extensive federal spending cuts and civil service reforms in the initial reconciliation package or defer them to a subsequent one focused on extending Trump-era tax cuts. Discussions remain preliminary, with no consensus reached on the best approach.
The tax-focused reconciliation package presents its own complications. The projected $4.6 trillion increase to the deficit over a decade, under current policy assumptions, has prompted calls for alternative scoring methods.
While Senate Republicans favor basing estimates on current tax rates, some House Republicans prefer using current law, which assumes the expiration of Trump tax cuts, leading to concerns over the package’s perceived fiscal impact. Suggestions such as a temporary four-year extension of the tax cuts have been floated to mitigate costs.
Further disagreements have emerged over whether to expand the tax package to include Trump-backed proposals, such as exempting tipped income and Social Security benefits from taxation. These measures, estimated to cost billions over the next decade, have raised concerns about their budgetary consequences among fiscal conservatives.
Senate Republicans described their discussions as exploratory, with plans to refine their strategy for the two reconciliation packages. John Barrasso emphasized the importance of seizing the opportunity to deliver on campaign promises, while Trump’s address to the GOP retreat underscored the mandate provided by recent electoral victories.
