House and Senate Republicans’ budget plans are on a collision course this week, with each chamber vying to advance separate blueprints for their party-line reconciliation packages.
After punting on a markup last week, House Republican leaders say they could unveil a broad framework for energy, national security and tax policy this week.
The exact timing, however, remains unclear, and Speaker Mike Johnson (R-La.) said Sunday on Fox News that they might push back a markup in the House Budget Committee “a little bit further.”
“I’ve got to make sure everyone agrees before we bring the project forward, that final product,” he said, “and we’ve got a few more boxes to check, but we’re getting very, very close.”
Over in the Senate, the Budget Committee, led by Chair Lindsey Graham (R-S.C.), is plowing ahead with a markup on Wednesday and Thursday. That panel released its own budget resolution last week. A summary said the goal was to increase onshore and offshore oil and gas production and eliminate a fee on methane leaks.
The two budget resolutions are expected to propose different degrees of spending and cuts for committee leaders to pursue given the range of competing demands from conservatives and more moderate members in each chamber. House leaders are aiming for one large reconciliation package that can clear Congress by simple majority, while the Senate is going for two or more smaller bills.
The discordance among Republicans — and between the House and Senate — could set up a contentious intraparty fight in the coming weeks. The contrasting approaches could derail Johnson’s ambitious plan for the House to pass its package by Easter and will likely continue to complicate efforts to reach a separate, bipartisan agreement on fiscal 2025 government funding.
“[Graham] can control what he does in his chamber, and we can control what we can do in our chamber,” Rep. Jason Smith (R-Mo.), who is overseeing much of the House’s tax policy changes, said last week. “It’s kind of unfortunate that he’s going to go through a practice that doesn’t accomplish anything.”
House Budget Chair Jodey Arrington (R-Texas) told reporters that House reconciliation leaders will probably know early this week whether they have “a deal that’s ready to be marked up.”
A key hang-up is that conservatives are demanding spending cuts well above what House Republican leaders think could be achievable without losing some support from moderates.
Lawmakers last week tentatively settled on pursuing $4.7 trillion in savings, which likely would not cover anything beyond an extension of expiring tax cuts, as POLITICO reported.
Both House and Senate leaders have met with President Donald Trump repeatedly to make their case but the president appears willing to let the chambers race to see who can get the first budget reconciliation bill done.
Energy, regulations, tax credits
The Senate Budget Committee resolution would task the Senate Energy and Natural Resources Committee, House Energy and Commerce Committee, and House Natural Resources Committee with finding at least $1 billion in deficit reductions over a 10-year span.
Those reductions could be funded by GOP priorities such as boosting oil and gas lease sales in public lands and waters and the collection of related royalties, though it’s not clear that energy markets would yield the intended results.
The Senate Environment and Public Works Committee would be charged with recommending policies that would “increase the deficit” by up to $1 billion over 10 years. Repealing EPA’s methane fee could help do that by reducing revenues and would require offsets in other places.
The House and Senate Agriculture committees would be asked to achieve at least $1 billion in spending reductions, which could mean conservation and nutrition assistance programs will be targeted.
Across the Capitol, committee leaders have similarly been pushing for the House budget resolution to include oil and gas lease sales as a big revenue driver. Arrington has also backed proposals to repeal renewable energy tax credits in Democrats’ 2022 climate law to generate savings.
The Senate’s budget blueprint does not target tax credits in the Inflation Reduction Act; those could come later.
A debate over whether to include a debt ceiling extension has also become embroiled in the negotiations. Johnson told reporters Friday that he will try to include a debt limit suspension in the House’s reconciliation package.
Such a provision appears unlikely to survive; leaders will need full Republican support to pass their package, and there a numerous conservatives who generally do not vote to lift the debt limit.
Rep. Kat Cammack (R-Fla.) said she’s been talking to Senate counterparts about including the “Regulations from the Executive in Need of Scrutiny (REINS) Act” in reconciliation. Senate Energy and Natural Resources Chair Mike Lee (R-Utah) has been vocal about wanting the REINS Act included.
The legislation, which Republicans have pushed unsuccessfully in recent years, would require Congress to approve any “major” regulations, which Cammack argued would have a greater impact on spending than other options currently being discussed.
“If you think about … most of the regulations that have taken place over the last 40 years, they’ve done more to hinder energy production and independence than anything else,” she said. “The REINS Act is regulatory reform on a historic scale.”
She added there are a few mechanisms that could be used to make the legislation suitable for reconciliation, which requires a clear budget nexus — “but it is doable.”
Shutdown talk
While Republicans struggle with their party-line legislation, bipartisan negotiations for reaching a deal on fiscal 2025 spending heated up last week, with lawmakers under increasing pressure from the fast-approaching March 14 funding deadline.
House and Senate appropriators have yet to reach agreement on a top-line funding number more than four months into the fiscal year. Johnson and Democratic leaders fired shots across the Capitol last week, accusing one another of stalling negotiations or misrepresenting the state of the funding talks.
Negotiations continue, according to Republican and Democratic appropriators, but Democrats are growing increasingly impatient with the Trump administration’s moves to circumvent bipartisan spending laws and freeze spending. Some are suggesting they would force a shutdown if Republicans can’t agree to hold the administration accountable. Democratic leadership has not explicitly signaled their support for that strategy.
A federal judge has ordered an end to the spending freeze, but Democrats say some money remains inaccessible, and they have concerns about other administration moves that they believe are illegal.
Sen. Andy Kim (D-N.J.) said on NBC’s “Meet the Press” on Sunday that “we are at a point where we are basically on the cusp of a constitutional crisis, seeing this administration taking steps that are so clearly illegal. And until we see a change in that behavior, we should not allow and condone that, nor should we assist in that.”
Democrats are especially wary given that Trump and Elon Musk, one of his top advisers, tanked a bipartisan spending deal in December after congressional leaders agreed on it.
“That can’t happen again,” said Connecticut Rep. Rosa DeLauro, the House’s top Democratic appropriator. “We need assurances that once the agreement is made, we can move forward and get these bills done and passed on behalf of the American people.”
Another fiscal 2025 continuing resolution appears increasingly likely, with members of both parties saying they see a stopgap as the only way forward. Senate Appropriations Chair Susan Collins (R-Maine) told reporters last week that while she and House Appropriations Chair Tom Cole (R-Okla.) continue to exchange numbers with Democrats, “I would not say that we are close.”
House and Senate fiscal 2025 spending bills from last year are tens of billions of dollars apart, with the House versions proposing cuts to a broad range of energy and environment programs. Renewable energy advocates have called on appropriators to move forward with the Senate’s more robust Energy-Water bill.
On Monday, the center-left think tank Third Way published a new memo, shared first with POLITICO’s E&E News, saying the Senate version “rises to the occasion” while the House version “fails to provide the needed investments, which risks ceding our competitive advantage to countries outpacing us in funding.”
Disaster aid for California will be another point of contention, especially as some Republicans continue to call for that funding to be tied to conditions or for it to be fully offset.
Reporters Kelsey Brugger, Meredith Lee Hill and Benjamin Guggenheim contributed.
