If it seems like I am writing a lot about the budget reconciliation process, that’s because I am. The reason is because the Trump administration and the congressional Republicans are going to attempt to use it to enact their legislative priorities without the help of the Democrats, and this is both highly risky for the GOP and a cause of optimism for their opponents.
Here, I am going to recover some ground that I’ve already trod about how and why Speaker of the House Mike Johnson is choosing this strategy. Specifically, I wrote about how Johnson angered his own caucus last year when he relied on mostly Democratic votes to raise the debt ceiling and sought to appease them by making a couple of promises. The first promise he made is that this year, when the debt ceiling needs to be raised again, he will do it through the budget reconciliation process. If you want to understand the significance of this commitment, I refer you to the Bipartisan Policy Center’s website:
Budget reconciliation is a legislative procedure made available as a result of the 1974 Congressional Budget and Impoundment Control Act. Reconciliation allows for expedited consideration of certain and specified changes in law to align spending, revenue, and the debt limit with agreed-upon budget targets. Over the 50-year history of the Act, 23 budget reconciliation bills have been enacted, most recently the 2022 Inflation Reduction Act.
If a concurrent budget resolution includes direct instructions to specified committees to make changes to laws within their jurisdiction to achieve a particular budget outcome, the reconciliation process can be launched. The bill that results from those instructions is known as a reconciliation bill, receives expedited consideration in the Senate—no ability to delay or filibuster—through time limits on debate and, with a consent agreement, amendments.
As a result, a reconciliation bill can avoid the Senate’s 60-vote filibuster threshold and provides lawmakers the chance to pass legislation with a simple majority vote.
Johnson is in charge of the House of Representatives, but he has to be mindful that the Senate Democrats can block his legislation from being considered with a filibuster. Using the reconciliation process can theoretically get around this problem and allow both the House and Senate Republicans to pass bills without making any concessions at all to the Democrats. With respect to the debt ceiling, however, this will only work if nearly every Republican member of Congress, in both chambers, is willing to vote for a hike. Particularly in the House, most Republicans have historically been unwilling to do this. And that has led Republican Speakers John Boehner, Paul Ryan, Kevin McCarthy, and Johnson to cut deals with the Democrats to avoid a catastrophic national credit default. It does no good for Johnson to promise the hike will be done in a way to avoid a Senate filibuster if he still has to go running to the Democrats to pass it in the House.
So, that leads to the second promise he made. In order to entice nearly every House Republicans to vote to increase the debt ceiling by $1.5 trillion this year, he promised that he would find $2.5 trillion in cuts to mandatory spending. Now, what is mandatory spending?
Mandatory spending, controlled by laws other than appropriations acts, includes spending on entitlement programs. This includes the big three—Social Security, Medicare, and Medicaid—and many smaller programs such as supplemental nutrition assistance, federal civilian and military retirement benefits, and unemployment insurance. Spending is also mandatory for items the government cannot avoid, such as plaintiff awards from lawsuits.
Spending that is not considered mandatory is called “discretionary.” At this point, I need to talk about some of the limitations on using the budget reconciliation process. Here’s one:
Discretionary spending subject to the regular appropriations process—such as annual funding for the Departments of Education and Defense—cannot be included in the reconciliation process.
So, now you can see why Johnson’s promise to reduce government spending by $2.5 trillion in return for a $1.5 trillion hike in authorized borrowing focused exclusively on mandatory spending. It’s because he isn’t allowed to use reconciliation to cut discretionary spending.
A second limitation on the budget reconciliation process is that it cannot make changes in Social Security. This is hugely consequential. In 2023, the government had $3.8 trillion in mandatory spending. Social Security accounted for over $1.3 trillion of that total.
Do the math. If you subtract the $1.3 trillion in Social Security spending from $3.8 trillion, you get $2.5 trillion. That is the exact amount Johnson promised to cut. If Congress actually did this for next year’s budget, it would wipe out all Medicare and Medicaid spending. It would wipe out SNAP food assistance and child nutrition programs. It would end veterans’ income security and pension security and bank deposit security. We would no longer have unemployment compensation.
Fortunately for Johnson, he has a 10-year budgetary window to find these savings, so they would not have to come all at once. Still, we have to take into account that Trump has pledged not to make cuts in Medicare. In 2023, Medicare amounted to $839 billion of the total $3.8 trillion in mandatory spending. The biggest remaining slice of spending is the $616 billion dedicated to Medicaid.
In our most recent podcast, Brendan and I interviewed the Pennsylvania Policy Center’s executive director Marc Stier who warned about coming cuts to Medicaid. It’s a prediction that was amplified on Sunday by Jonathan Cohn in a HuffPost piece. Considering the numbers I cited above, I think you can see why. There’s nowhere else to find the money Johnson needs to even approximate keeping his promise to cut $2.5 trillion.
Now, remember, since Johnson decided to completely bypass the Democrats and use the budget reconciliation process not only to raise the debt ceiling but to enact Trump’s energy and immigration legislation and to extend his 2017 tax cuts, he’s put himself and the incoming administration in an all-or-nothing situation. He can afford to lose no more than two House Republican votes or the whole first year agenda collapses like a house of cards.
So, let’s consider the popularity of the coming Medicaid cuts. As Cohn writes, the Republicans are considering “cuts to Medicaid that could cause millions of Americans to lose health insurance.” This would be done largely by block-granting Medicaid money to the states, which a 2004 KFF survey found is opposed by 71 percent of Americans and 86 percent of Medicaid enrollees.
In other words, it’s a very, very unpopular proposal that politicians who care about being reelected should be extremely reluctant to support. But all the cutting can’t come from Medicaid alone. That’s why House Budget Committee chairman Jodey Arrington (R-TX) is floating some other ideas. Cohn writes:
Some of the other items on the list would face similar political difficulties. The proposed food assistance costs would affect tens of millions of Americans, while the cuts to clean energy subsidies would undermine a manufacturing boom that’s been generating jobs and money all across the country — including a new “battery belt” of electric vehicle production infrastructure across the South. Already, House Republicans representing some of these districts have been lobbying to keep the subsidies in place.
It’s unclear if energy subsidy cuts can be included under the reconciliation rules, but if that’s permitted it’s not at all assured that a bill can pass that includes them. The same is true of draconian cuts to food assistance affecting tens of millions of Americans. You can go down the list. Cuts in mandatory spending are not easy because they’re not popular.
Cuts anywhere near the level Johnson has promised in return for near universal Republican support for a debt ceiling hike would almost assuredly cause at least 3 House Republicans to balk. So, he’s going to have to break his promise. Right?
But if he breaks his promise will Republicans like Chip Roy, Thomas Massie and Paul Gosar simply shrug their shoulders and vote to raise the debt ceiling anyway? That’s very doubtful. And this is only one part of Johnson’s challenge. As I discussed in my prior pieces, there are Republicans who won’t support an extension of Trump tax cuts if they don’t increase the SALT tax deductions and many more Republicans who won’t support an extension if they do.
I know some of you are concerned that Democrats will cross over to help the Republicans pass their agenda, and we will see some of that. But I think you can see how little appetite Democrats will have to support the reconciliation bill that represents the vast bulk of their legislative agenda. I don’t think the GOP will find any Democrats who are willing to countenance the type of cuts we’ve been discussing to food assistance, health coverage and Medicaid, for example.
One way out is for the Republicans to change the rules on what’s permissible under reconciliation rules. They may have no choice but to try, because as things stand, they really cannot expect anything but catastrophic failure.
Terrific analysis, thanks.
Another way out, it seems to me, is an extension of the “Republicans can change the rules of what’s permissible” tactic, and that is: Republicans do what they want *by any means necessary*. Change the rules, ignore the laws, overturn the rules, etc.
How far congressional Republicans are willing and able to go will be one of the limits (or not) to how far Trump and his minions are able to go.