Congress returns to D.C. with plans to begin the detailed process of turning President Trump's domestic policy agenda into a multi-trillion dollar policy bill that is expected to touch everything from tax cuts and Pentagon funding increases to expanded border security spending — along with corresponding cuts to help balance the cost.
Republicans may control both the House and the Senate but they are already fighting an uphill battle to find consensus on major elements of the plan. Intra-party factions remain at odds with the fundamental budget framework that directs committees to start their work. The House barely approved that bill before a two-week holiday recess and they plan to begin the next steps this week.
Republicans are using a budget tool called reconciliation, a process that enables Congress to bypass the 60-vote threshold normally required to advance a bill in the Senate. At this stage, committees are working to meet the instructions set out for them to change revenue, deficits, spending, or the debt limit by specific amounts. Eventually, the budget committee will assemble all the drafted legislation from committees into one large legislative package that both chambers will vote on.
But getting to that point is going to be a thorny endeavor that will test the GOP's ability to overcome internal divide under tight margins in both chambers.
"They have a very slim majority," said Josh Chafetz, law professor at Georgetown University. "Can they actually keep the entire conference together in both chambers? We haven't really seen many tests of that yet because there's been so little legislative activity."
House Speaker Mike Johnson, R-La., set a goal of getting the legislation to Trump's desk by Memorial Day, an ambitious timeline that may well fall by the wayside.
Differences on size of spending and cuts
Republicans are aiming to craft a legislative package that would extend the 2017 Tax Cuts and Jobs Act while authorizing additional cuts, raise the debt ceiling and boost defense spending and funds to increase security along the U.S.-Mexico border.
But there are major differences among Republicans, including over the targets themselves. House committees are instructed to cut at least $1.5 trillion in spending; the Senate has just $4 billion as a floor for spending cuts.
Sarah Binder, a politics professor at George Washington University, said deficits have grown in the years since the Trump tax package was first passed, putting more pressure on fiscal hawks who worry about spending but may also want to back lower taxes.
"Conservatives want to do rather large spending cuts," she said. "There's more disagreement than one might've expected for something (normally) as unifying as tax cuts for the Republican party."
In order to get the budget blueprint to pass the House, Senate GOP leaders publicly committed to finding larger spending cuts than what was included in the resolution itself. But bridging that divide will not come easily.
"Republicans have always had this challenge where they talk about deficit reduction in the abstract, but that becomes very difficult when it's time to specify what they would cut to fix the budget," said Jessica Riedl, a senior fellow at the Manhattan Institute who previously worked as chief economist to Sen. Rob Portman, R-Ohio.
"Now they have to roll up their sleeves and figure out how to dramatically cut Medicaid, student loans, and food aid programs that are popular not only in Democratic districts, but in a lot of Republican districts as well," Riedl said.
Medicaid fight will be front and center
A major point of contention is cuts to Medicaid, the federal-state health insurance program for people with disabilities and low-income adults. The House instructed the Energy and Commerce Committee, which has jurisdiction over the program, to find $880 billion in savings over the next 10 years.
A report last month from the nonpartisan Congressional Budget Office found that the provisions in the House plan could only be reached by massive cuts to Medicaid.
But there is vehement opposition from some Republicans about significant cuts to the program, including Missouri Sen. Josh Hawley, who has vowed to not support any measure that would lead to cuts in Medicaid benefits.
A dozen House Republicans recently wrote a letter to the chairman of the Energy and Commerce Committee along with House leadership, warning they won't support a bill that includes "any reduction in Medicaid coverage for vulnerable populations."
"Balancing the federal budget must not come at the expense of those who depend on these benefits for their health and economic security," their letter read.
For his part, Speaker Johnson has pledged to "protect the benefits that everyone is legally entitled to" and that they'll look to "waste, fraud, and abuse" for savings, something experts say won't be enough to meet that $880 billion target.
"This is going to tie Republican lawmakers in knots," Riedl said. "When you make certain promises that major spending programs will not be cut, and it turns out that such promises are mathematically impossible within the savings framework you've promised, that's when lawmakers panic and try to figure out what promises they can afford to break and which ones they cannot."
The tension between lawmakers who say they won't vote for massive cuts to a popular program and lawmakers who only voted to advance the budget resolution because of promises of deficit reduction is only going to increase.
"The problem for Republicans right now is they're going to have to deal with doing the largest Medicaid cuts of all time or breaking the promise to the people who only went forward because they thought they were going to get the largest Medicaid cuts," said Bobby Kogan, a former Senate Budget Committee staffer who is now senior director of federal budget policy at the Center for American Progress, a progressive research group.
Time pressures are adding further complications. Republicans also want to use the bill to increase the debt limit. Independent analysts expect the federal government could hit the borrowing limit sometime this summer.
In addition, the reconciliation process sets a deadline of Sept. 30 to pass the bill or lose all of the benefits of the budget process.
"This legislative schedule is going to really tighten how much time they have left because they're going into the summer season," Binder said. "Otherwise, the budget resolution in the Senate loses its privilege if it's expired."
All about the math
You may be hearing "current policy baseline" thrown around a lot in the next month.
Simply put — it's a way to make the nearly $4 trillion in tax cut extensions look like it costs nothing.
The approach, pushed by some Senate Republicans, would essentially count the 2017 tax cuts, which expire this year, as ongoing policy that doesn't cost anything to extend.
"The equivalent would be — what if Democrats did a one year of Medicare for All, completely unpaid for, and then they come back next year and say, OK, it's free to continue," said Kogan. "That's what Republicans are doing."
Advocates for the approach say it helps enable more permanent policy while not getting in the way of congressional efforts to cut spending. Opponents call it a budget gimmick that will add trillions to deficit increases.
Maya MacGuineas, president of the bipartisan Committee for a Responsible Federal Budget, is among the experts who say changing the rules for assessing spending in this way could have permanent consequences.
"This ad-hoc, inconsistent, manipulative, and disingenuous approach to budgeting is enough to make your head explode, and it is going to make the debt explode," MacGuineas said in a statement. "Congress isn't even pretending to do honest budgeting at this point."
The strategy also won't fly with deficit hawks, who begrudgingly advanced the budget resolution because of assurances they would get sufficient cuts in the end.
And this is where the Trump factor could come into play.
A big difference between Trump's first presidency and second is the level of his involvement during Hill negotiations. He privately calls members directly to whip support for his priorities and publicly threatens to primary lawmakers who don't fall in line.
"It's all well and good to have a red line," Kogan said. "But one question that members are going to have to figure out is what do you think of your red line when Donald Trump calls you up and says, vote for this or you're dead to me?"
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