Federal Advocacy Update: February 24, 2025
Senate Passes Budget Reconciliation Bill; House Looks to Move its Own Package
House Republicans returned from their week-long recess today, faced with the monumental task of advancing their massive budget reconciliation package. The measure authorizes funding for many of President Trump's domestic priorities (including funding for the border and energy production) and also includes language that would extend the 2017 Tax Cuts and Jobs Act (TCJA). Before the long break, the House Budget Committee adopted Republicans' budget resolution on a party-line vote; the measure could be considered by the full House as early as Tuesday.
The House budget resolution directs multiple authorizing committees to come up with at least $2 trillion in spending reductions – to be paired with $4.8 trillion in new spending – between fiscal years 2025 and 2034. If committees are unable to achieve a minimum of $2 trillion in cuts to “mandatory” spending programs – such as Medicaid and SNAP – the $4.8 trillion in new spending will be reduced by a commensurate amount. If and when the resolution clears the lower chamber, individual authorizing committees would then begin marking up their portions of the reconciliation package according to the agreed-upon fiscal targets.
There are early signs that House Republicans have their work cut out for them. As described in previous legislative updates, Speaker Mike Johnson (R-LA) can likely only afford to lose one or two Republican votes. Already, several members of the Republican conference have stopped short of endorsing the spending package due to concerns over potential cuts to Medicaid and other social programs. For their part, budget hawks in the House Freedom Caucus are uneasy with the measure's drastic spending on tax cuts and are skeptical that House committees be able to produce substantial savings to offset the massive costs.
Aware of the tempestuous negotiations in the House (and their colleagues' slim margin), Senate Republicans are in the process of advancing their own budget reconciliation plans through a two-bill approach: the first of which addresses funding for President Trump’s domestic priorities and the second which would extend the 2017 tax cuts.
Last week, the Senate approved its first reconciliation bill, a $350 billion defense and border security measure. According to Senate Budget Committee Chairman Lindsey Graham (R-SC), the ten-year plan will be fully offset with cuts to other programs. Notably, the Senate budget resolution provides little indication as to which programs would be used to pay for the new spending. Instead, the resolution sets a deficit reduction floor for the Senate committees overseeing SNAP and Medicaid. As expected, the Senate budget plan is silent on tax policy, with committee leaders deciding to punt negotiations over extending provisions of the TCJA to a second measure to be introduced later in the year.
Congress Faces Shrinking Window to Pass FY 2025 Budget
While Republicans forge ahead on their budget reconciliation plans, a separate (though related) budget issue looms over Washington, and time is running out to address it. With Congress failing to pass a federal appropriations package for the fiscal year that began last October 1, lawmakers have been forced to approve a series of short-term Continuing Resolutions (CRs). Pursuant to the latest CR, lawmakers have until March 14 to either pass another stop-gap budget or clear an omnibus spending bill that funds the entirety of the federal government through September 30, 2025.
Notably, any appropriations package is subject to the filibuster and will need bipartisan support. As of this writing, a new long-term spending measure looks increasingly unlikely, as Democrats and Republicans are nowhere near finalizing a deal and have been unable to agree on a topline spending number. Absent an 11th-hour agreement, Congress will need to approve another CR.
Further complicating negotiations is the Trump administration's aggressive, and potentially extrajudicial, funding freeze. While Democrats have signaled that they are eager to avert a government shutdown on March 14, they're threatening to withhold support for any spending bill if the administration continues its efforts aimed at restricting federal funding. As House and Senate Republicans remain laser-focused on reconciliation, Congress appears to be making little progress toward finalizing an FY 25 budget (or even a short-term CR) – one of which must be passed to avoid a government shutdown in just over two weeks.
House Republicans Pass Bill Targeting Biden-Era Regulations
Earlier this month, House Republicans passed the Midnight Rules Relief Act (H.R. 77), which gives Congress the authority to fast-track the process of rolling back federal regulations imposed by the previous administration. Specifically, H.R. 77 would give Congress the power to overturn multiple federal rules under a single Congressional Review Act Resolution, as long as the rules were enacted during the final year of the prior president's term. Under current statute, Congress is only permitted to roll back a single rule in each congressional review resolution.
Notably, a version of the bill passed the Republican-controlled House late last year in anticipation of President Trump's return to the Oval Office. That measure was never taken up in the Senate, owing to the upper chamber's Democratic majority in the last Congress. With Republicans now in control of the Senate, the measure is likely to be considered, though its ultimate passage is less certain due to the Senate filibuster.
While Republicans' measure may not ultimately pass, as previously stated, Congress still has the authority to roll back individual federal rules through a joint resolution of disapproval. Notably, such a resolution is not subject to the Senate filibuster, meaning Republicans are more likely to successfully roll back Biden-era federal policies through individual joint resolutions. During President Trump's first term, Republicans successfully revoked 16 Obama-era regulations.
Trump Hands Environmental Review Rulemaking to Individual Agencies
On Thursday, President Trump moved to revoked decades worth of rules governing the review process for proposed infrastructure projects under the National Environmental Policy Act (NEPA). Previously, under NEPA, the Council on Environmental Quality (CEQ) created uniform review rules with which federal agencies were forced to comply. Under the White House's new directive, federal agencies are now subject to "voluntary guidance" from the CEQ. The move effectively shifts rulemaking from the CEQ to individual federal agencies and raises the prospect that interagency and public reviews may not occur. Moreover, the move may cause confusion between federal agencies, as each will now be tasked with developing their own rules and processes for environmental review. Accordingly, agencies may not reach a final, unanimous consensus on NEPA implementation and project approval.
Relevant Hearings and Markups
Tuesday, Feb. 25 | 10 a.m. House Appropriations Energy-Water Subcommittee oversight hearing on the state of the Civil Works Program.
Tuesday, Feb. 25 | 10 a.m. House and Senate Veterans Affairs committees joint hearing on “Legislative Presentation of Disabled American Veterans & Multi VSOs.”
Tuesday, Feb. 25 | 2 p.m. House Judiciary Constitution and Limited Government Subcommittee hearing on “Subject to the Jurisdiction Thereof: Birthright Citizenship and the Fourteenth Amendment.”
Wednesday, Feb. 26 | 9:30 a.m. House Oversight Economic Growth, Energy Policy, and Regulatory Affairs Subcommittee hearing on “Leading the Charge: Opportunities to Strengthen America’s Energy Reliability.”
Wednesday, Feb. 26 | 10 a.m. Transportation and Infrastructure Committee markups on several measures, including the Disaster Management Costs Modernization Act (H.R. 744). Among other things, the bill would authorize FEMA to permit recipients to retain excess management costs for up to five years after the close-out of a disaster; and permit grant recipients to use excess management funds for capacity-building activities to prepare for or recover from other disasters.
Wednesday, Feb. 26 | 10 a.m. Senate Environment and Public Works Committee hearing on “Infrastructure Investment and Jobs Act Implementation and Case Studies.”
Wednesday, Feb. 26 | 10:15 a.m. House Education and Workforce Committee hearing on “Unleashing America's Workforce and Strengthening Our Economy.”
Wednesday, Feb. 26 | 10:30 a.m. Senate Agriculture, Nutrition and Forestry Committee hearing on “Perspectives From the Field: Farmer and Rancher Views on the Agricultural Economy, Part 2.”
Wednesday, Feb. 26 | 11 a.m. Senate Commerce, Science, and Transportation Committee hearing on “Interdicting Illicit Drug Trafficking: A View from the Front Lines.”