Federal Advocacy Update, March 31, 2025
Senate Lawmakers to Move Forward with Separate Budget Reconciliation Plan
With government funding resolved for the remainder of the fiscal year (through September 30), Republican lawmakers in the Senate are turning their sights to the massive legislative package they hope to pass using the privileged process known as budget reconciliation. Despite significant pressure from House Speaker Mike Johnson (R-LA) for the Senate to take up the House-passed measure targeting $1.5 trillion in minimum spending cuts, more than half of which would come from Medicaid, many GOP senators are wary about cutting too deeply into safety-net programs, and they aren’t united internally on where their spending cuts should come from. Senate Majority Leader John Thune (R-SD) has openly said the House-passed reconciliation blueprint will need changes to get through the upper chamber.
The Congressional Budget Office (CBO) now estimates the United States is likely to breach its debt limit in August or September if Congress does not act. That projection is adding renewed urgency for lawmakers to use the reconciliation package to increase the debt limit, which would be a controversial provision for many Republicans. With Johnson’s razor thin margins in the House, the two chambers have yet to reach an agreement on a path forward.
As a solution, Thune (R-SD) now intends to move forward on the Senate’s fiscal blueprint without first resolving the two chambers’ major disputes over the package. Instead, Thune will seek to pass a budget resolution that provides a different, lower set of spending cut targets for Senate committees than their House counterparts. This would allow the upper chamber to maintain an “aspirational” goal of major cuts without locking lawmakers into unrealistic fiscal targets that must be met to unlock the Senate’s privileged reconciliation process, allowing for a simple majority vote.
Both sets of instructions would be in the final budget resolution, and then the two chambers could hammer out differences later over what the actual reconciliation details look like. Though nothing is set in stone yet, the Senate could start adopting a compromise budget on Wednesday, though the process may easily draw out into Friday or Saturday. Thune’s goal is to pass the more flexible blueprint ahead of Easter recess, which will go from April 11 through April 27.
President Trump Withdraws Elise Stefanik’s United Nations Nomination to Bolster Republican House Majority
In a surprise reversal, President Trump has withdrawn his nomination for Rep. Elise Stefanik (R-NY) to serve as UN ambassador over fears about size and durability of the GOP’s narrow House majority. Stefanik had waited for months on her nomination to be heard in the Senate due to the House GOP's tiny margin. However, ahead of Florida’s special elections to fill two vacant seats, the race to replace former Representatives Michael Waltz (now serving as National Security Advisor) has become increasingly narrow in what was assumed to be a safe district for the GOP. Stefanik's seat would have been filled by a special election in New York. The Republican Party currently holds a 218-213 seat majority in the House, with four seats currently vacated following the deaths of two Democratic lawmakers in safe districts for the minority party.
Trump to Announce Additional Tariffs This Week
The financial markets and Capitol Hill are bracing for Wednesday, April 2, when President Trump has promised to unveil a massive tariff plan on at least 10-15 countries. Those tariffs are in addition to the 25% tariff announced last week on cars built or auto parts from Canada and Mexico. While Trump hasn’t been entirely clear what tariffs he will put in place, he has stated that he would impose reciprocal tariffs on all countries.
HHS Initiates Significant Restructuring and Layoffs
On March 27, U.S. Department of Health and Human Services Secretary Robert F. Kennedy Jr. announced plans to significantly cut the size and embark on a full-scale restructuring of the department in accordance with President Trump's Executive Order “Implementing the President’s ‘Department of Government Efficiency’ Workforce Optimization Initiative.” According to HHS, the plan will save the agency $1.8 billion annually.
The plan will fire an additional 10,000 employees. Combined with the roughly 10,000 employees who have voluntarily opted to leave the department since President Trump took office, this would represent a 25 percent reduction in the overall HHS workforce – from the current 82,000 full-time employees to 62,000. The cuts are agency-wide and span across the nation. Five of the agency’s 10 Regional Offices will be closed and 28 divisions will be consolidated into 15.
CDC Cuts $11.4 Billion in State/Local Public Health Funds
The CDC last week announced that it is terminating $11.4 billion in funding for state and local health departments that was allocated to them, nongovernment organizations, and international recipients to respond to the COVID-19 pandemic.
While the clawed-back funds were largely being used initially for Covid testing, vaccination, community health workers and initiatives to address Covid health disparities, the funds have been supporting overall public health epidemiology and laboratory capacity as well as vaccines for children.
Relevant Hearings & Markups
Tuesday, April 1 | 10 a.m. House Small Business Committee hearing on “The Golden Age: Unleashing Main Street Through Deregulation.”
Wednesday, April 2 | 10 a.m. ET Senate Environment and Public Works Committee hearing on “Constructing the Surface Transportation Reauthorization Bill: United States Secretary of Transportation’s Perspective” with Transportation Secretary Sean Duffy.
Wednesday, April 2 | 10 a.m. House Natural Resources Oversight and Investigations Subcommittee hearing on “Unleashing the Golden Age of American Energy Dominance.”
Wednesday, April 2 | 2 p.m. House Education and Workforce Health, Employment, Labor and Pensions Subcommittee hearing on “A Healthy Workforce: Expanding Access and Affordability in Employer-Sponsored Health Care.”