What to Know in Washington: GOP Confused Over Budget Strategy

Donald Trump’s wavering over a budget legislation strategy is leaving Republican lawmakers unsettled over how to proceed. But first you should know:

• Trump is keeping the global economy on its toes over tariffs.
• We highlighted the key players to watch in Congress’ 2025 tax talks.
• Trump’s dealmaking skills will be put to the test with nearly 200 major union contracts expiring in 2025.

GOP Confused Over Budget Strategy Amid Mixed Signs from Trump

Republican lawmakers are strategizing on how to muscle their agenda through budget reconciliation. But they could face delays due to mixed signals from President-elect Donald Trump.

Two-Track Strategy vs One: Trump left the door open to passing two reconciliation bills Monday — after calling for one massive bill encompassing measures on the debt limit, tax policy, border security, energy, and defense. Budget reconciliation allows Republicans to move their legislation without the threat of a Senate filibuster.

The president-elect’s indecisiveness might normally not matter. But in this case, it could hold up a major bill. Republican lawmakers have turned to Trump for direction. Once they’ve settled on a one- or two-track approach, the reconciliation process makes it difficult to reverse course, Ken Tran and Jack Fitzpatrick report.

Speaker Mike Johnson (R-La.) told reporters Monday that he “wouldn’t get too wound up” on the exact strategy for enacting the GOP agenda early in Trump’s term.

Still, Johnson hopes to adopt in early February reconciliation instructions. Republicans will have to decide if they’re doing one bill or two bills soon — at least preliminarily — to kick off the process. Read More

Read BGOV’s Congress Tracker for our breakdown of lawmakers’ agenda and the politics driving it.

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Donald Trump is gearing up to go ahead with a major tariff package.

That’s the major takeaway after the president-elect shot down Washington Post reporting that he might moderate plans for across-the-board tariffs.

Trump said Congress will use revenue from tariffs to help pay for extending his 2017 tax cuts in a “powerful” bill that would eliminate taxes on tips. He also said tariffs will help revitalize US Steel after President Joe Biden blocked Nippon Steel’s bid to purchase the iconic but struggling firm.

The president-elect is “deeply committed to this,” said Everett Eissenstat, a trade lawyer who held key positions in Trump’s first administration and as an adviser to Congress.

• “There’s been a couple of comments via social media over the last several weeks that reiterated that tariffs are a central plank of his economic policy. And it doesn’t just appear to be for transactional purposes.”

Trump’s plans could face legal challenges, as they did in his first term. Congress could also balk at using revenue from tariffs to pay for tax cuts. Some members — including die-hard free trade Republicans — may oppose using them at all, especially if they go beyond a certain threshold. The challenge of imposing a major package could be one reason Trump’s advisers might be considering other options, despite what the president-elect says on social media. Read More

Watch These Key Players in Congress During the 2025 Tax Talks

As Republicans seek to extend or modify the expiring tax cuts from the GOP’s signature 2017 law, several key players could make or break that process.

Among them are incoming Senate Budget Chair Lindsey Graham (R-S.C.) and House Budget Chair Jodey Arrington (R-Texas), who would have to approve the start of the budget reconciliation process, and the nonpartisan Joint Committee on Taxation and the Congressional Budget Office, which provide cost estimates for proposed legislation.

Senate Parliamentarian Elizabeth MacDonough is also likely to play a critical role; she serves as the chamber’s de facto reconciliation referee.

The president’s advisers, including newly tapped Kenneth Kies to serve as assistant secretary for tax policy at the Treasury Department, and the tax-writing committee and leadership office staff, which includes lawyers, tax professionals, and business experts, will be influential.

• “Members are obviously driving the big picture strategy and policy decisions,” said Marc Gerson, a former House Ways and Means Committee tax counsel now at Miller and Chevalier. “But for a lot of fulfilling that strategy, they heavily rely on staff.” Read More

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