U.S. Political Update: Trump Inauguration & Congressional Reconciliation Process

I am sure that many, if not all of you, have been keeping up to date with President Trump’s inauguration, executive orders, and recent statements. The mainstream press, globally, has been keeping readers up to date. Social media has also been working overtime to share posts, memes, and caricatures from the right, left, and center.

The actions that the U.S. Congress will take over the next few months are the ones that will change policy. The process the Republicans will use so they do not need support from Democrats is called reconciliation. Reconciliation is not straightforward, but it does have rules in both the House of Representatives and the Senate that will help your understanding of the process and whether the more consequential policy changes will be achieved.

Before reconciliation takes place, both the House and Senate, must pass a budget. This is not an easy task. In the past, even when Republicans have controlled the House, they were not able to pass a budget. A majority vote in the House and in the Senate is required. Since the Republicans control both the House and the Senate their goal is to get a budget passed without any support from Democrats.

In the Senate, the budget is not subject to filibuster. The filibuster is a procedure that typically gives the minority party, in this case the Democrats, a tool to stop Republicans from passing legislation without Democrats’ support. With Republican Party majorities in both the House and the Senate, all are watching to see if the Republicans are able to pass a budget. It does not need President Trump’s signature.

Assuming the budget is passed, it will specifically have to call for reconciliation. Doing so will send specific signals to the Committees to change spending, revenue, deficits, and debt limits by specific amounts. Reconciliation is a fast-track way to make changes, but it has limits. The changes must relate to spending or revenue. Policy changes that do not relate to spending and revenue cannot be included in reconciliation. In the Senate, a ruling determining whether a provision can be included is made by a Parliamentarian, a non-political position. In the House, provisions are subject to a point of order if the deficit is increased.

For weeks, House and Senate Republicans have been arguing about whether there should be two reconciliation bills or just one. Reconciliation can only be used two times in a Congressional session which lasts two years. The House wants one reconciliation bill; the Senate wants two. Currently, the Republicans are focused on one bill. The Speaker of the House, Mike Johnson, is concerned because margins in the House are small, and Republicans, depending on the provisions, may not be able to keep all of its Members together, especially not for two bills. In the next month, to avoid disunity, President Trump is meeting with every Republican House Member of Congress.

Now for the substance. Republicans want to extend President Trump’s tax cuts that were enacted during his first term. These cuts will expand the current budget deficit so that many cuts will have to be made to offset the tax cuts. Reconciliation cannot negatively impact or cut Social Security – this provision will limit the reductions in spending Republicans can make to offset tax cuts.

The Republicans also want to fund President Trump’s deportation program, which is estimated to cost billions. Republicans also want to cut President Biden’s climate change programs and make cuts to discretionary programs, including programs that provide a social safety net for the poor. Republicans are also proposing cuts to Medicare, the U.S. healthcare program for seniors. These cuts are an example as to why Senate Republicans thought two bills would work better. Extending Trump’s tax cuts for the wealthy and pairing tax cuts with making cuts to popular social programs is a bad look for Republicans. But that, at least for now, is not the track the process is on.

The challenges for passing a budget and for getting through reconciliation are steep. Not all Republicans want to cut discretionary programs, not all Republicans want to cut President Biden’s climate change programs, and many Republicans are against cutting healthcare for seniors or the working poor. In the House, the Speaker has almost no margin for error and no Democrats will join Republicans in either the House or the Senate. In the Senate, there is a three vote margin but there are three or four Republicans who are not in lock step with the Trump agenda.

For now, the first step is whether Republicans can pass a budget in the House. The timeline is quick and begins in a couple of weeks. All eyes will be on the House and on Speaker Johnson to see if he and President Trump can keep all the Republicans together for the Budget vote.