Budget timeline moves up in Senate as GOP preps flexible targets

WASHINGTON — Senate Majority Leader John Thune told GOP senators Wednesday that a compromise budget resolution could hit the floor for a “vote-a-rama” as soon as next week, which would allow the House to adopt it the following week before the two-week April recess.

This accelerated time frame, if both chambers can adhere to it, would let Republicans hit the ground running after the recess to write the “big, beautiful” budget reconciliation bill that President Donald Trump wants.

Speaker Mike Johnson, R-La., has set an informal deadline of Memorial Day to send the measure to Trump, including a massive tax cut package, more money for defense and border security, domestic energy incentives, a debt limit increase and trims to mandatory spending.

As recently as Tuesday, Thune, R-S.D., had been telling colleagues that Senate consideration could slip to the week of April 7, which likely wouldn’t give the House time to act before the recess.

But discussions made a big leap on Wednesday with a new strategy: provide a different, lower set of spending cut targets for Senate committees than their House counterparts. Under this scenario, the final budget resolution adopted by both chambers would “instruct” House and Senate committees differently.

The House’s targets could look like what that chamber already adopted, achieving at least $1.5 trillion in 10-year cuts compiled by various committees, including over half through the Energy and Commerce panel’s $880 billion savings floor.

On the other hand, Senate committees would receive much lower targets to preserve maximum flexibility, similar to that chamber’s adopted budget in which some panels would have to secure as little as $1 billion in cuts to keep the total package eligible for reconciliation, which avoids a filibuster. Still, the expectation was that Senate committees would achieve well above that figure, in order to fully offset a $340 billion-plus border and defense spending package.

Both sets of instructions would be in the final budget resolution, and then the two chambers could hammer out differences later on what the actual reconciliation details look like.

“What needs to ultimately be reconciled is the final bill. The resolution’s looking different in two chambers, I don’t think anybody’s getting worked up about that,” Sen. Eric Schmitt, R-Mo., said Wednesday. “But eventually everybody does kind of need to unlock the process, which is what the resolution is for.”

The working theory is that eventually what matters for “Byrd rule” enforcement in the Senate is whether that chamber’s reconciliation instructions are adhered to.

For example, if the Senate Agriculture Committee’s instruction is to find a minimum $1 billion in cuts, while the House Agriculture Committee is instructed to achieve $230 billion, a final bill could in theory come in below the House figure as long as it clears the Senate threshold.

Political realities in both chambers may dictate a higher level of spending cuts. But for now, at least the committees on both sides of the Capitol could get to work.

“I think if it’s a number where the committees have some flexibility … then I think that takes pressure off the number, because it gives folks some room to work,” Sen. John Hoeven, R-N.D., said Wednesday.

Divisions on spending

And GOP senators on Wednesday made clear they are still torn on savings targets. Sen. Steve Daines, R-Mont., said he thinks his conference will end up backing a minimum $2 trillion in spending cuts spread over 10 years.

“That’ll be a minimum number. It’s not a ceiling, it’s a floor,” Daines said. “I think it’s doable.”

But Sen. Mike Rounds, R-S.D., said he thought the House budget cuts ultimately would prove unpalatable even to House members, and that a compromise would largely mirror the Senate’s version in terms of cost savings.

“I don’t think the House will have the votes to do what the House is talking about,” Rounds said. As for the House budget resolution, he said, “They sent it out with a request that they not see it again. That’s the way I interpret and so do a lot of my colleagues.”

Sen. Roger Marshall, R-Kan., said he was trying to keep an open mind on spending cuts in an attempt to determine what could win a majority of votes in both chambers.

“I think that’s one of the defining questions in this process,” Marshall said. “How much should we slow the spending in future years?”

A strong appetite for deep cuts rivaling the House plan was clearly in short supply when the Senate took up its budget resolution last month. When Sen. Rand Paul, R-Ky., offered an amendment to increase the amount of required cuts to roughly $1.5 trillion, he got just 24 votes, or fewer than half of his chamber’s Republicans.

And several Republicans made clear they are not willing to make major cuts in Medicaid, the federal and state health insurance program for poor people.

Medicaid is the ripest target for cuts in Energy and Commerce’s jurisdiction, other than Medicare, which GOP leaders and Trump have said they plan to tread lightly on. Senate Finance, which has jurisdiction over Medicaid, would have been instructed to find $760 billion in overall cuts if Paul’s budget amendment had been adopted.

“We’re not going to cut Medicaid,” Marshall said. “We will try to strengthen Medicaid for the future of all those who need it the most, the most vulnerable.”

Sen. Josh Hawley, R-Mo., said he needs assurances that the budget resolution, which typically would not spell out cuts to specific programs, isn’t setting up for a subsequent reconciliation bill that would reduce Medicaid benefits.

“If they think, you know, this is going to be a bait-and-switch activity, where it’s, we’ll vote for our resolution, which will be general and generic, and then later on when we see the bill, it’s going to contain Medicaid cuts. I just want to be real clear, I’m not going to vote for that,” he said.

While adding work requirements to the safety-net program would be fine, Hawley said, he took issue with possibly requiring states to cover more of the cost of Medicaid. That’s likely to result in cuts at the state level, he said. “Beyond work requirements, if it’s something that results in reductions in benefits to folks who depend on it and who are qualified and are working, I’m not going to vote for that. That’s 20% of my state,” he said.

Meanwhile, Sen. Thom Tillis, R-N.C., said he thought leadership would have to convince fiscal hawks to get on board with promises of future cuts, if the Senate lands on $2 trillion as its target. That would likely involve promises of more spending cuts in subsequent legislation, Tillis said.

Sen. Rick Scott, R-Fla., said he wants to see a plan for a balanced budget, but doesn’t need this year’s reconciliation bill to be the vehicle to achieve it.

“Part of this is mandatory, and part of this is discretionary and you’ve got to do it both ways,” he said, referring to the mandatory spending that can be addressed in the reconciliation process and discretionary spending that is determined in annual appropriations bills. “That’s the right way to look at it.”

A plan to balance the budget could be enough to get him to “yes” on a reconciliation bill that includes an increase to the debt ceiling, he said.

But no one expects a budget compromise to come easily. “It’s difficult because of the mood around here,” one Republican said, declining to be identified in order to speak candidly. “We just got through the [fiscal 2025 continuing resolution], and that has made things, I think, even more difficult. But it needs to be done.”

‘Current policy’ fans

One area of considerable common ground — although not total unity — among Republicans in both chambers is on taxes.

Planning for the tax package has already been underway, with numerous meetings on both sides of the Capitol. Kevin Hassett, director of the National Economic Council, and James Braid, the White House legislative affairs director, met with Ways and Means Republicans on Wednesday.

GOP leaders and the Trump administration want to use a “current policy” baseline so that the $4 trillion-plus cost of extending the 2017 tax cuts permanently doesn’t need to be offset to meet reconciliation targets.

That’s never been done before, but some budget analysts believe the Senate parliamentarian is likely to opine that it’s OK under the Byrd rule, as long as some tweaks are made to generate a fiscal impact in the first 10 years.

Republicans and Democrats have been meeting separately on the issue with Senate Parliamentarian Elizabeth MacDonough, and a bipartisan meeting with her — where both sides make their cases — is expected to happen soon. That’s the final step before she issues Byrd rule guidance.

----------

Paul M. Krawzak and Aidan Quigley contributed to this report.