The budget resolution sets the terms of the final settlement bill intended for Republicans to use to pass the president’s policy agenda.
WASHINGTON – On April 10, US House members approved a budget resolution, the first step to enacting President Donald Trump’s legislative agenda, overcoming considerable procedural hurdles a few days after uncertainty.
The resolution was first passed by the House of Representatives on February 25 with a narrow vote of 217-215, and passed by an amendment to the Senate on April 5. The House agreed to the Senate amendment on April 10 with a narrow vote of 216-214. Reconciliation process.
The passage of the resolution was a victory for both House Speaker Mike Johnson (R-La.) and Senate majority leader John Tune (Rs.D.), resisting their respective meetings, particularly from fiscal conservatives who opposed planned increases in spending.
“By clearing this important hurdle, the House Committee is working with the Senate committee to quickly prepare each part of the settlement bill and is on track for markup during the next work period,” wrote in a statement by the Epoch Times. “We will not shake up our commitment to providing legislation that reduces spending, secures borders, keeps taxes low for families and job creators (and) restores American energy control.”
Approval of the resolution by both houses is only the first step in the settlement process.
The final bill is expected to include provisions that extend the tax cuts originally enacted by the 2017 Tax Cuts and Employment Act (TCJA), as well as new funds to build a wall along the US border with Mexico.
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Below we discuss important aspects of the process.
Reconciliation process
Republicans use the settlement process to pass the law. This process allows you to pass budget bills without facing the Senate’s 60 vote coagulation requirement. Given that there are only 53 Republicans in the Senate, reconciliation is the only way to pass key laws at party boundaries without support from Democrats.
Due to immunity from filibusters, settlements have often been used to enact the most major federal laws in recent US history. The 2010 Healthcare Settlement Act enacted key provisions for Obamacare, the 2017 TCJA, and recently the Biden administration’s policies that enacted the 2021 US Rescue Plan Act and the 2022 Inflation Reduction Act, all passed as settlement bills.
The settlement bill may only include provisions closely related to taxation, expenditures and public borrowing known in the Senate as the “bird rules.” Pure policy changes that do not have financial ties are generally unacceptable. Furthermore, measures to increase the deficit in 10 years will not be accepted and must be offset by corresponding reductions in expenditure.
The budget resolution passed in both houses was a legal prerequisite for commencing the drafting of the bill. The resolution includes instructions to various committees to make recommendations on reducing and increasing spending on the bill. These will be received by the Senate and House Budget Committees and will write bills that include them. Perhaps the Senate and House of Representatives should write two different bills and adjust these differences before passing the same bill for presentation to the President.
Drafting of the bill
Passing the resolution through both homes means that legislative leaders will begin drafting the bill in line with its top-line conditions, allowing several committees to make recommendations for new spending and reductions on the final bill.
“The budget resolution unlocks the ability of the House and Senate to make Trump’s tax cuts permanent, reduce wasteful spending, fully fund border security needs for four years, and provide the military with the shots they need.”
The resolution itself includes amounts that will increase spending over the decade from 2025 to 2034.
Homeland Security, which covers immigration enforcement, will acquire $90 billion to $175 billion in new funding, and will support new detention facilities, overtime salaries, and transport of immigration and customs enforcement (ICE) to implement Trump’s deportation plan targeting illegal immigrants.
US Customs and Border Protection (CBP) will also receive new funds for border security, including potential approval to advance the construction of border walls, a key Trump promise since the 2016 campaign.
“(Bordertial) Tom Homan said, ‘I’m asking you for money,'” Graham reported at a February 11 press conference. “If you want to track down 300,000 migrant children who are missing… if you want to finish the wall… if you want to have a more modern border, you need money to do that,” he added.
The resolution also allows for approximately $100 billion and $150 billion in new defense spending. The funds could be granted for new procurement, such as naval vessels, for activities in the Indo-Pacific region that address threats from the Chinese Communist Party.
Law enforcement and judicial issues will see spending between $110 billion and $175 billion. It is used to promote judicial procedures for some people and asylum seekers.
Additionally, the bill would allow the US to increase its debt limits of $4 to $5 trillion in the later this year to avoid defaults.
Each relevant committee must submit recommendations on increased spending to the Senate and House budget committees, within these restrictions, and draft bills, respectively. Elected Republican officials say the bill must be completed quickly as the windows of political opportunity are closed.
The controversy remains
Most Republicans support the general idea of large bills to enact conservative priorities. But the overall cost and offset are controversial among many Republicans who are committed to reducing public spending.
The Senate’s proposal is a push to make the individual income tax cuts permanent, originally enacted by the TCJA. These reductions are set to expire on December 31st, and will return to pre-2017 levels if Congress has not taken action. The overall extension of the TCJA is the most expensive item on the bill, costing up to $4.5 trillion.
However, the Senate’s revision to budget resolution has ordered enforceable spending cuts of just $4 billion. In contrast, the original House direction called for a cut of up to $1.5 trillion in spending cuts.
Congressional fiscal conservatives argue that tax cuts come with corresponding cuts to other areas of spending, and that there is a guarantee that the final legislation will not increase the deficit.
“I reluctantly voted for the Senate amendment…based on three specific commitments that form the floor to consider the final settlement package” commitments include bill mandatory spending, Qi candidate grants, Medicaid, and spending reductions of “$1 for $1 for $1 tax cuts” trillions of dollars. “Unable to achieve these baselines, including deficit neutrality, will make it impossible to support the final settlement product,” he said.
In contrast, Rep. Thomas Massey (r-ky.) was the only Republican in the House to oppose the Senate amendment. “If we were trying to speed up our country’s economic collapse and bribe our voters, the strategy isn’t much different to what Congress is doing today,” he writes about X.
House Budget Committee Chairman Geordy Arlington (R-Texas), who wrote the House resolution, also expressed concern about the potential financial impact.
The budget resolution directs the House Energy and Commerce Committee to cut $880 billion over a decade. This is a potential level of reductions in Medicaid programs that work with states to provide health insurance to low-income people. Democrats have criticised this aspect of the plan very much, but Johnson and the GOP leaders said only unnecessary spending and abuse on the program will be eliminated.
“The budget resolution that has passed through the House of Representatives… will start moving on to some of the most extreme cuts of healthcare, nutritional assistance and what’s important to everyday Americans,” said minority leader Hakeem Jeffries (DN.Y.) at a press conference on April 10 after the bill was passed. He argued that the bill would involve “the biggest Medicaid cut in history.” The program enjoys support from all involved voters, and it is unlikely that Democrats in both the Senate and House of Representatives will vote in favor of the final bill.
Even some Republicans have expressed concern about the program cuts, particularly concerns in state battlefield districts such as New York and California. Others, including conservative activist groups, are concerned about the provisions of the Senate direction that could raise the debt cap to $5 trillion.
“This budget sets the stage of history’s biggest deficit growth, an unprecedented bill that requires a savings of just $4 billion to offset a deficit of up to $5.8 trillion, an absolute dishonor.
Republicans have defended the plan by suggesting that high economic growth caused by tax cuts will offset the deficit. Still, they are working to quickly resolve these differences and create a final bill soon. This is only because it will be more difficult to pass the major legislative package as a medium-term approach in 2026.
“People will get TI-ill next year than this year, because there will be an election year. This is the time,” Rep. Richard McCormick (R-Ga.) told the Epoch Times. “We don’t have another bite on the apple. This is it.”
Nathan Worcester contributed to this report.
