27 January 2025

What to expect in Washington (January 27)

President Trump continues to have cabinet nominees confirmed, and meetings continue this week to try to shape the budget reconciliation process that Republicans want to use to extend Tax Cuts & Jobs Act provisions expiring at the end of 2025. The Senate is in session this week, and will vote on the nomination of Scott Bessent to be Treasury Secretary today at 5:30 p.m. The Saturday procedural vote to advance the nomination was 67-23, with 14 Democrats joining Republicans in support. The nomination of Sean Duffy to be Secretary of Transportation is next up.

The House is out this week, as Republicans hold a retreat in Doral, FL, that is to include an address by President Trump today (Monday, January 27) and meeting with VP Vance tomorrow (Tuesday). Speaker Mike Johnson (R-LA) hopes to present to members a blueprint for reconciliation. Politico reported that reconciliation plans are a focus in anticipation of a Budget Committee meeting on the issue when the House returns, and Johnson also wants to present government funding and debt limit options. The report said centrist Republicans are "relaying their concerns to GOP leaders about some committees' plans to target pieces of the Affordable Care Act, Medicaid and the Supplemental Nutrition Assistance Program … "

Last week, House committee chairs led a discussion with members to discuss some of the revenue ideas that have been floated for a reconciliation bill, including work requirements for Temporary Assistance for Needy Families (TANF), SNAP, and Medicaid, and other health changes.

The packaging and revenue approach to the GOP agenda remains unsettled. On Fox Sunday Morning Futures January 26, Senate Majority Leader John Thune (R-SD) said of disaster aid for California wildfires: "What can ride on that? We will see. Obviously, we have to finish up all the spending bills from last year because the Democrats left us with that mess … We haven't even funded FY25, which we're currently in the middle of. And then we have got the Fiscal Year '26 budget. We got reconciliation, which is the vehicle that enables us to get a lot of things, the things that we want to get done on energy, on the economy, on the border, on military readiness … how it all gets packaged together is still something that we are discussing with the president and his team and with our colleagues in the House."

Leader Thune said, "Hopefully a reconciliation bill will also include a significant amount of spending cuts, among other things; energy policy, all things border policy that we want to get done through reconciliation … But all those things are going to have to be packaged together. And I guess my hope is that, as we move through this process, we will do it in a way that enables us to get all the votes that we need in the House of Representatives — and it's a narrow margin there, including the SALT caucus … " Further on revenue offsets, Thune said, "there's a long list of things that we're looking at."

On Meet the Press, Budget Committee Chairman Lindsey Graham (R-SC), who has long advocated a two-bill approach to reconciliation, said more funding is needed for border enforcement. "We need to do two bills in reconciliation. The first bill should be $100 billion for the border, $200 billion for national security. Put those points on the board."

Trade — "Momentum is growing among President Trump's advisers to place 25% tariffs on Mexico and Canada as soon as Saturday, bucking conventional wisdom in Washington and on Wall Street that he would back off the threatened levies as he has in the past in exchange for concessions … " the Wall Street Journal reported last night. "Tariffs against Mexico and Canada would be the first salvos in a multifront trade war that Trump looked ready to start unexpectedly on Sunday with his Colombia duties, before that country hewed to his demands to accept repatriation flights for migrants. He has also threatened to hit … Denmark and a range of other European countries with tariffs, but he appears intent to turn his aim next on the U.S.'s North American neighbors."

On Wednesday, January 29 (10:00 a.m.), the Senate Finance Committee is set to hold a hearing to consider the nomination of Robert F. Kennedy, Jr., to be Health and Human Services Secretary.

EO Alerts — An EY Alert, "US issues Executive Order on BEPS 2.0," is available here.

An EY Alert, "United States President signs 'America First Trade Policy' Presidential Memo," is available here.

A WCEY Alert, "President Trump's Week One Executive Actions Impacting Health Care," is available here.

An EY Office of Public Policy (OPP) "Trump administration executive action alert: Key executive actions from 20 January 2025" is available here.

An energy-focused OPP document is available here.

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Contact Information

For additional information concerning this Alert, please contact:

Washington Council Ernst & Young

Document ID: 2025-0328