Lawmakers are, of course, with the rest of the nation focused on the aviation tragedy at Ronald Reagan Washington National Airport. There has been continued confusion over the White House Office of Management and Budget (OMB) memorandum directing federal agencies to pause all activities related to obligation or disbursement of all Federal financial assistance, even after it was rescinded January 29. The order required a review to identify programs, projects, and activities implicated by any of the President's executive orders, and potentially other factors. The funding freeze was scheduled to take effect on January 28, but a federal Judge blocked enforcement until 5 p.m. on February 3.

It was unclear whether rescission of the order, via a short memo from OMB January 29, was a policy reversal or workaround:

• Semafor cited an official as suggesting that rescinding it let the White House get around the court injunction and resume engaging with agencies on executive orders: "Anything deemed at odds with the President's EO will freeze."
• The Wall Street Journal (WSJ) January 29 reported, "The White House argued Wednesday that even though its Monday night call for a spending pause was now rescinded, the administration is still reviewing federal programs for ways to cut spending it views as wasteful." (The report said part of the impetus for the order was Trump administration frustration with employees at the Centers for Disease Control and Prevention "who sent money to the World Health Organization after the White House had moved to withdraw the U.S. from it.")
• Politico said, "The memo's rescission does not rule out a new memo from the White House budget office on another spending freeze, with administration officials arguing that such an action falls within the power of the executive branch."
• NPR reported that White House Press Secretary Karoline Leavitt said the move was just rescinding the Monday directive and efforts to "end the egregious waste of federal funding" will continue.

An accompanying Administration spreadsheet prescribed a top-to-bottom review of whether tax provisions and many other programs across the government provide funding related to illegal immigration, activities overseas, climate plan, burden on domestic energy resources including through the Inflation Reduction Act and Infrastructure Investment and Jobs Act, DEI, environmental justice, equity-related grants, etc.

Amid the lingering anger over the order, Senate Budget Committee Democrats boycotted the panel's January 30 vote on the nomination of Russell Vought to be OMB Director. "We will not vote for someone so clearly unfit for office," they said on social media. Republicans voted the nomination out 11-0. A full Senate vote on confirmation is expected next week, with a procedural vote set for 5:30 p.m. on Monday, followed by a vote on confirmation of Christopher Wright to be Secretary of Energy.

The original order and continued efforts to further its aims, as well as the plan to offer buyouts to Federal workers, appear to reflect dual goals of dismissing progressive ideology from federal government programs and curbing spending that are being taken very seriously by the Administration. "It became clear the bureaucrats were still trying to funnel unapproved discretionary grants of funds to their pet projects. So, OMB, led by Russ Vought, felt it was necessary to protect taxpayer resources to issue clearer guidance establishing for these discretionary grants of funding that are not directed by Congress that they go through a political approval process at the agency … " Stephen Miller, White House Deputy Chief of Staff for Policy, said on CNN January 28. "The choice here is simple. It is very simple, and I want to state it clearly, either Donald Trump gets political control over this government and ends the waste, abuse, and fraud on the American people, or we let bureaucrats autopilot federal spending."

A Washington Post story on the genesis of the order and potential staying power of its intent said that Miller and others asked an OMB team led by Vought "to write guidance for agencies on implementing Trump's executive orders that reviewed and froze funding … Vought was deeply involved even though he has yet to be confirmed by the Senate as OMB director and is not actually employed by the government." Echoing comments from other members who are being asked for clarity from groups in their states, Senator Susan Collins (R-ME) was cited in the report as saying Wednesday, "I don't know whether this is at [Vought's] direction or [Elon] Musk's direction or the acting director of OMB, I just don't know. That's one of the things I want to find out … because we don't know who to go to for clarification."

Tax — House Republicans are coming off a retreat in Doral, FL, to try to firm up some reconciliation plans before the Budget Committee marks up the requisite FY2025 budget resolution as soon as next week. There were discussions for weeks prior to the retreat about how much each committee can offer up in savings and through what proposals. That could lead to a revenue target for the reconciliation bill that is necessary for the budget process to play out, and it seems a final determination hasn't been made. Discussions have been fluid but one area gaining steam is work requirements for programs like Medicaid, Temporary Assistance for Needy Families (TANF), and the Supplemental Nutrition Assistance Program (SNAP).

A January 30 Tax Notes story, "Fast Budget Timeline Faces Reality of Small House GOP Margin," cited House Republican Policy Committee Chair and Ways and Means Committee member Kevin Hern (R-OK) as saying at the close of the retreat January 29 that committee chairs are still finalizing the cost ranges for their panels on reconciliation. "If we're going to meet the timeline that we're trying to meet, we're going to have to probably get this resolution done by the middle of February," Ways and Means and Budget Committee member Blake Moore (R-UT) said. "So we're going to make a call, move forward, and see if we can galvanize the conference to get behind something."

Multiple stories have cited Senate Majority Leader John Thune (R-SD) and Senate Finance Committee Chairman Mike Crapo (R-ID) as saying the Senate plans to be ready with a budget — that will likely reflect a preferred two-bill approach that starts with border issues and leaves tax cut extensions to a second bill — and tax plans. The thinking has long been that House leaders are focused on a one-bill approach given their narrow majority, and that the border priorities may be necessary to sway any tax bill holdouts.

Punchbowl News January 29 cited Chairman Crapo as saying he wants a long extension of the TCJA provisions expiring at the end of 2025 and would prefer permanence. "Crapo said there's been no final decision on how to score the Trump tax cut extension yet. He wants to use a 'current policy baseline' that would make it so the over $4 trillion of tax cut extensions count officially as costing nothing because they're in law right now," the story said. "Crapo confirmed that Republicans would have to make 'some adjustments' to the tax cuts to make them work under this baseline."

There has long been the expectation that each of the provisions would need to be modified in some respect to meet the budget reconciliation requirement that proposals have some revenue impact.

Tax administration — Chairman Crapo and Ranking Member Ron Wyden (D-OR) released a discussion draft of the next iteration of bipartisan legislation addressing Internal Revenue Service (IRS) procedure and administration. (The Finance Committee has a long history of bipartisan action on this issue.) According to a Committee release, provisions would:

• Require the IRS to improve "math error" notices so that taxpayers are better positioned to timely respond
• Streamline review of offers-in-compromise to facilitate the taxpayers' resolution of tax debts
• Simplify foreign bank account report (FBAR) compliance
• Clarify and expand Tax Court jurisdiction
• Expand the independence of the National Taxpayer Advocate (NTA) from the IRS
• Increase civil and criminal penalties on tax professionals
• Expand taxpayer access to the IRS Independent Office of Appeals
• Extend the so-called "mailbox rule" to electronic submissions
• Protect taxpayers by adopting reasonable standards and due process for issuing and revoking return preparer identification numbers (PTINs)
• Strengthen the IRS whistleblower program while protecting confidentiality
• Protect hostages from unfair tax processes and penalties

Health - On January 29, the Senate Finance Committee held a hearing on President Trump's nomination of Robert F. Kennedy Jr. for Secretary of the Department of Health and Human Services (HHS). During the hearing, Chairman Crapo and other Republicans voiced confidence in Mr. Kennedy and his Senate confirmation. Chair Crapo said, "He deserved to be confirmed," while many Democrats questioned whether Mr. Kennedy was the right candidate to lead HHS. The dominant themes throughout the hearing were addressing chronic conditions through improved diet and Mr. Kennedy's position on vaccines.