What to expect in Washington (May 19) (2025)

Negotiations are continuing over unsettled details related to the House budget reconciliation bill with extensions of Tax Cuts & Jobs Act (TCJA) provisions expiring at the end of 2025 as its centerpiece, including whether to make the bill's Medicaid changes more stringent and its work requirements effective earlier; possibly accelerating the Ways and Means bill's changes to Inflation Reduction Act (IRA) energy tax credits; and increasing the $10,000 state and local tax (SALT) deduction cap. The slate of unresolved issues represents the balancing act GOP leaders must contend with as time grows short to meet their self-imposed Memorial Day deadline for passage. Regarding Medicaid and IRA credits, some conservatives think the approach taken in the House bill as written is not sufficient while others view the current proposals and any attempts to deepen them as too severe.

There are multiple inflection points for potentially changing the bill. The Medicaid and IRA issues were the focus of House Budget Committee conservatives, four of whom — Reps. Chip Roy (R-TX), Ralph Norman (R-SC), Andrew Clyde (R-GA) and Josh Brecheen (R-OK) — voted against approving the bill assembling the recommendations of 11 committees on Friday. The Budget Committee reconvened at 10 p.m. on Sunday after a weekend of discussing possible changes and reported the combined bill 17-16 with Reps. Roy, Norman, Clyde, and Brecheen voting "present." Committee Republicans did not detail any potential changes that caused members to change their votes, and suggested the details were fluid. Press reports suggested changes under discussion included accelerating Medicaid work requirements to December 31, 2026. Rep. Norman said he and others received a commitment for IRA credits to end earlier, Bloomberg reported.

Prior to the vote, Budget Committee Ranking Member Brendan Boyle (D-PA) expressed concern about members not being able to see the full details prior to a vote. Chairman Jodey Arrington (R-TX) said deliberations continue "at this very moment," and will continue into the week, likely up until the time of a House vote. Arrington said members will see changes in a manager's amendment, but he was not in a position to describe all of the ongoing discussions. He said there were currently no formal changes to the bill and the committee voted on the same language that was before them Friday.

Rep. Roy posted on social media after the vote, in part: "Importantly the bill now will move Medicaid work requirements forward and reduces the availability of future subsidies under the green new scam. But, the bill does not yet meet the moment — leaving almost half of the green new scam subsidies continuing. More, it fails to end the Medicaid money laundering scam and perverse funding structure that provides seven times more federal dollars for each dollar of state spending for the able-bodied relative to the vulnerable."

Approval by the Budget Committee allows the bill to proceed to the Rules Committee, where substantive changes can be formalized. House Speaker Mike Johnson (R-LA) said on Fox News Sunday, "The plan is to move it to the Rules Committee by midweek and to the House floor by the end of the week, so we meet our initial, our original Memorial Day deadline." The Rules Committee meeting is scheduled for Wednesday, May 21, at 1:00 a.m.

The Rules announcement includes a comparative print reflecting some changes to the bill.

With the 220-213 majority, House Republicans can only lose the votes of three members to pass the GOP-only reconciliation bill. Prior to floor consideration, Republican leaders will need to agree to an increase in the $10,000 state and local tax (SALT) deduction cap with a group of high-tax state GOP members who have been pushing for relief from the cap, including Reps. Nick LaLota (R-NY), Elise Stefanik (R-NY), Mike Lawler (R-NY), Andrew Garbarino (R-NY), Tom Kean (R-NJ), and Young Kim (R-CA). Press reports have suggested a $40,000 cap was under consideration, and that discussions over how to pay for it are ongoing.

Rep. LaLota has suggested increasing the top individual tax rate, which has been discussed in relation to the reconciliation debate but was omitted from the Ways and Means Committee bill. "Allowing the top tax rate to expire — returning from 37% to 39.6% for individuals earning over $609,350 and married couples earning over $731,200 — breathes $300 billion of new life into the effort," he wrote on social media May 17. "It's a fiscally responsible move that reflects the priorities of the new Republican Party: protect working families, address the deficit, fix the unfair SALT cap, and safeguard programs like Medicaid and SNAP — without raising taxes on the middle class."

Both the Ways and Means and Energy and Commerce committees approved recommendations for some of the most controversial parts of the reconciliation bill, including a broad tax package and Medicaid changes respectively, May 14 after all-night markups, but the momentum coming out of those votes stalled with the controversy in the Budget Committee and the need to resolve SALT-related issues before a full House vote.

The Medicaid issue is seen as possibly requiring some additional presidential leadership. Politico reported: "Trump has been reluctant to approve any moves that can be construed as cutting Medicaid, which many of his own voters in deep red states rely on for health care. GOP leaders have been privately discussing moving up the work requirement start date from 2029 to 2027. But as private talks between hard-line holdouts, White House officials and GOP leaders wore on this weekend, one thing became increasingly clear. 'In the end, the president is gonna have to weigh in on where he stands on Medicaid,' one person involved" said.

The report also stated: "GOP leaders also told the hard-line holdouts that there are not the votes to immediately repeal Biden-era green energy tax credits that the holdouts are pushing for, rather than the gradual phase-out currently in the draft legislation. That point enraged the hard-liners … "

There is also increasing attention beyond the House when the bill moves to the Senate and is likely to be significantly modified in the Senate, meaning House members could be voting on some policies that won't ultimately be enacted.

A Washington Post story said, "Republicans across the ideological spectrum are worried about what could happen to their bill when it reaches the Senate," given that "many of the proposals most important to the House may not survive the upper chamber's strict rules that govern the budget process" and Senators have already stated their intention to make policy changes. "There are dozens of members who have expressed that concern to our leadership, and those members are insisting that either the Senate go first, or the Senate and the president bless … whatever bill that we're ultimately asked to vote on," Rep. LaLota said. "We don't want to have a … scenario where the House votes on something that ultimately gets trashed in the Senate or by the president. We should make every effort possible to vote on something only if it's real."

Congress — The Senate is back in session today with a vote at 5:30 p.m. related to the nomination of Charles Kushner to be Ambassador to the French Republic and Ambassador to Monaco.

With support from Sen. Mark Warner (D-VA), a bipartisan stablecoins regulation bill could see floor time this week as Democrats who had blocked debate on the bill last week touted changes they had won in the bill text.

The House is also in today, with votes beginning at 6:30 p.m. on suspension bills under the jurisdiction of the Science, Space, and Technology, Foreign Affairs, and Veterans' Affairs committees. Later in the week are planned votes on two Senate-passed Congressional Review Act (CRA) disapproval resolutions:

• S.J. Res. 13 — Providing for congressional disapproval under of the rule submitted by the Office of the Comptroller of the Currency of the Department of the Treasury relating to the review of applications under the Bank Merger Act.
• S.J. Res. 31 — Providing for congressional disapproval of the rule submitted by the Environmental Protection Agency relating to "Review of Final Rule Reclassification of Major Sources as Area Sources Under Section 112 of the Clean Air Act"

The main item on the House schedule is a vote on the budget reconciliation bill.

The Senate Finance Committee has set a hearing for Tuesday, May 20 at 10 a.m. on the nomination of former Rep. Billy Long (R-MO) to be IRS Commissioner.