Republicans Already Clashing Over Trump Policy Rollout

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Republicans Already Clashing Over Details of Trump Policy Rollout

With Republicans in control of all major branches of the federal government starting in January, it seems reasonable to assume that it will be smooth sailing ahead for GOP policymakers as they roll out their plans to overhaul the tax system, dramatically reduce spending and carry out President-elect Donald Trump’s plans to deport migrants, boost the oil industry and strike back at foes both inside government and out. But cracks are already beginning to show in the foundation of the new Trump era, as key lawmakers lay out different legislative strategies for how to proceed next year.

Sen. John Thune of South Dakota, the incoming Senate majority leader, said this week that he wants to quickly pass a legislative package focused on border and energy policy, preferably in the first 30 days of the new administration. That package would advance under budget reconciliation rules, allowing it to pass with a simple majority — a crucial requirement for Republicans, who will have 53 seats, too few to clear the usual 60-vote threshold without help from Democrats. Once the border and energy package passes, a second reconciliation package focused on tax policy could be assembled and voted on, later in the year.

House Speaker Mike Johnson endorsed the two-step strategy, telling Fox News today: “You gotta put border at the top of the priority list. We all agree on that.” As for what else is included in the first package and what could wait until the second, Johnson said that is still to be determined. He noted that the timing could be tricky, since the Senate will be occupied with confirmation votes for Trump’s cabinet appointments. “So it's clock management,” he said.

Other Republicans in the House, however, are raising questions about the two-step approach. “Our members need to weigh in on that. This doesn’t need to be a decision that’s made upon high, okay?” said House Budget Chair Jodey Arrington, per Politico. “We’re all unified around the objectives, [but] how we roll it out, the tactics and strategies, still under discussion.”

Rep. Lloyd Smucker, a Republican from Pennsylvania who sits on the tax-writing Ways and Means Committee, said he thinks taxes should have top priority. “I’d like to see us do tax in the first reconciliation,” he told Politico. “Businesses want predictability, so the sooner we can figure this out and have it predictable for them, I think that can be better.”

Ways and Means Chair Jason Smith is also pushing for a tax-first approach. Smith told Punchbowl News that he is concerned that Congress may not have the capacity to push through two reconciliation bills in one year, especially with a tiny majority in the House. “If you look at history, in the last 25 years, every Congress has had only one reconciliation bill become law,” he said. “And we only have a 217 to 215 seat majority. So we think we can pass multiple ones into law? Yeah, I don’t know what island some people [are on].”

Some House Republicans are floating different potential approaches. Rep. Chip Roy, who sits on the Budget Committee, said he wants Republicans to move quickly on a reconciliation bill that includes all of the basic GOP priorities, while leaving the heavy lift of tax reform for later. “I remain of the belief that we ought to deliver very quickly on a reconciliation package that has core tenets of the things we want to accomplish in terms of border and fees and so forth, IRA repeal, then some elements of tax policy,” he said. “And then maybe do a second version that gets at true long-standing permanent tax reform.”

Whichever way it plays out, it could get complicated.

“You almost need a whiteboard for all the moving parts, because it’s more than just: Do you run two reconciliations for the two different open budget years, where this one’s more policy and this one is more tax, financial, debt, deficit-type issues?” said Rep. David Schweikert, who sits on the Ways and Means Committee. “At the same time, are you also calculating your votes” in a House that will need to maintain near-perfect unity in order to pass the GOP agenda.

The bottom line: Republicans have a good idea about what they want to accomplish in the next Congress, but narrow majorities and potentially conflicting priorities could slow their efforts to pass Trump’s legislative agenda.

Johnson Rejects Biden Request for $24 Billion in Ukraine Aid

House Speaker Mike Johnson on Wednesday nixed the idea of delivering another $24 billion in aid for Ukraine this year, rejecting a request by the Biden administration. Johnson says that Donald Trump’s election to a second term means that he, rather than the outgoing administration, should be able to decide on the U.S. approach to that war.

The Biden administration reportedly asked Congress last month for $16 billion to replenish U.S. stocks of equipment sent to Ukraine and $8 billion for the Ukraine Security Assistance Initiative, a program that provides arms to Ukraine and funds training of Ukrainian and other forces through contracts with U.S. defense companies.

In a news conference with other House Republican leaders, Johnson was asked if he would include that aid for Ukraine in an upcoming spending bill needed to keep the government open past a December 20 deadline.

“I’m not planning to do that,” the speaker said. “There are developments by the hour in Ukraine. I think, as we predicted and as I said to all of you, weeks before the election, if Donald Trump is elected, it will change the dynamic of the Russian war on Ukraine, and we’re seeing that happen. So it is not the place of Joe Biden to make that decision now. We have a newly elected president, and we’re going to wait and take the new commander in chief’s direction on all that. So I don’t expect any Ukraine funding to come up now.”

The Biden administration, racing to deliver all the assistance funding approved by Congress this year before Trump returns to office, announced another package of $725 million in military aid this week.

Trump has pledged to end the war in Ukraine, though he is widely expected to lean on Ukrainian President Volodymyr Zelensky to negotiate a deal with Russian President Vladimir Putin.

“To push back against cutting off U.S. assistance entirely, pro-Ukraine lawmakers are working to pass legislation by the end of the year that gives Congress the power to compel the president to provide future military and economic support,” The Hill’s Laura Kelly reports.

Trump Picks Former Congressman to Head IRS

President-elect Donald Trump said Wednesday that he has picked former congressman Billy Long of Missouri to be commissioner of the Internal Revenue Service. Trump cited Long’s 12-year tenure in Congress and his experience in the real estate business and as an auctioneer in making the announcement.

“He is an extremely hard worker, and respected by all, especially by those who know him in Congress,” Trump said in a statement. “Taxpayers and the wonderful employees of the IRS will love having Billy at the helm. He is the consummate ‘people person,’ well respected on both sides of the aisle.”

Number of the Day: $100 Billion

“The Biden administration has doubled its estimate of how much money it can collect by cracking down on an arcane tax avoidance scheme,” The Washington Post’s Julie Zauzmer Weil reports.

The Treasury Department now projects that it can collect more than $100 billion over the next decade by blocking instances of a practice known as “basis shifting,” in which large business partnerships manipulate the value of assets by moving them between related entities, in whole or in part to generate tax savings.

“Although it is a large increase in the forecast, $100 billion remains a conservative estimate,” Zauzmer Weil writes, citing an unnamed Treasury official. “Data on basis shifting is difficult to come by, he said, but the department updated its estimate based on expert feedback on the prevalence and magnitude of the transactions.”

Read more at The Washington Post.

Fiscal News Roundup

• GOP Lawmakers Already Divided Over Sweeping Trump Policy Bill – Politico
• Trump Taps Former Representative Billy Long as IRS Commissioner – Bloomberg
• Vivek Ramaswamy to Axios: DOGE Not Planning Cuts to Social Security, Medicare – Axios
• Trump’s DOGE Push Finds Support From Some Democrats on Capitol Hill – CNN
• Johnson: No Ukraine Aid on Year-End Spending Stopgap – Politico
• Hegseth Says He Plans to "Fight Like Hell" to Win Confirmation: "Why Would We Back Down?" – CNN
• Democratic Senator Says Trump's Defense Secretary Pick Pete Hegseth's Nomination Is "Doomed" – CNN
• Trump Mulls Replacing Hegseth With Florida Gov. Ron DeSantis – Wall Street Journal
• Billionaire Who Performed the First Private Spacewalk Is Trump’s Pick to Lead NASA – Associated Press
• Trump Nominates Cryptocurrency Advocate Paul Atkins as SEC Chair – Associated Press
• Peter Navarro Served Prison Time Related to Jan. 6. Now Trump Is Bringing Him Back as an Adviser – Associated Press
• Closing Asset Loophole Can Raise $100 Billion in Taxes, Treasury Now Says – Washington Post
• Legislators Propose 15% to 25% Tax Rate for New States Adopting Internet Gambling – Associated Press
• Powell Says Economic Strength Gives Fed Ability to Take Time on Rate Cuts – Wall Street Journal
• UnitedHealthcare CEO Is Killed in a ‘Targeted Shooting’ Outside a New York Hotel, Officials Say – Associated Press

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