Speaker Mike Johnson (R-LA) said February 9 that a House Budget Committee markup of an FY2025 budget resolution, the first step in unlocking the budget reconciliation process to be used to extend Tax Cuts & Jobs Act (TCJA) provisions expiring at the end of 2025 with only Republican votes, may be pushed back for a second week as tax bill details continue to be negotiated among members. "It's a very complicated and complex set of things that we are delivering … " he said on Fox News Sunday. "We were going to do a Budget Committee markup next week. We might push it a little bit further because the details really matter. Remember that I have the smallest margin in history about a two-vote margin currently."

Speaker Johnson said Republicans are "very close" to finalizing details, after a February 6 White House meeting with the President and about a dozen members representing disparate factions of the House GOP, including the Freedom Caucus group of conservatives, reportedly broke a logjam of differing perspectives. Lending more urgency to the situation was the decision by Senate Budget Chairman Lindsey Graham (R-SC) to release an FY2025 budget Friday and plan to mark it up this Wednesday and Thursday (February 12-13). Graham and others want two separate reconciliation bills, with the first to quickly provide border security funding and a win on the issue before attending to what they foresee as difficult tax deliberations in bill #2.

Speaker Johnson said he appreciates the Senate's zeal but has told Senator Graham, "I have about 170 additional personalities to deal with and he's only got 53 on the Republican side there. We have, you know, a very diverse caucus with lots of interests." House Republican leaders want an all-in-one bill, and Ways & Means Committee Chairman Jason Smith (R-MO) said last week a Senate-first effort "doesn't accomplish anything," because the resulting budget and bills "would never pass here." Asked about offsetting the $4.6 trillion cost of TCJA extensions (including interest costs, $4 trillion without), Speaker Johnson said, "We're looking for the offsets and we have to do that. We have to be good financial stewards because the other concern is that we are growing the national debt. We don't want to add to the deficit by doing this."

The House and Senate will need to pass the same budget resolution to unlock the reconciliation process, then pass the same bill for it to be law. In addition to one bill or two, unsettled details for the effort include:

• the baseline by which an extension bill will be measured — either current law or current policy, under which extending expiring provisions doesn't incur a cost for congressional budgeting purposes
• the duration of tax cut extensions, be it temporary for five or fewer years or permanent or some combination, which will play a big role in the cost of the package
• the amount of spending cuts and tax increases that should accompany the budget reconciliation bill and what those proposals should be, with Punchbowl News reporting that $2 trillion-$2.5 trillion is now the target for cutting federal spending

Of course, the Senate's reconciliation rules influence these decisions. There has long been the expectation that, under a current policy baseline, each of the provisions would need to be modified in some respect to meet the budget reconciliation requirement that proposals have some revenue impact. Punchbowl has reported, "Realistically, Republicans will need to use a current policy baseline — which considers the extension of the 2017 tax law to be cost-free — in order to make the tax cuts permanent under Senate rules for reconciliation." The cost-free element could steer the bill around the reconciliation rule against decreasing revenue during a fiscal year after the years covered by the reconciliation bill. The TCJA, which used a current law baseline, relied upon revenue-raising provisions (including some taking effect in the later years of the budget window) to enable permanency of the TCJA corporate rate cut, thus clearing the prohibition on decreasing revenue in years beyond the budget window.

Some reports have observed that Speaker Johnson's slim majority could be an asset. An all-in-one bill could be portrayed by GOP leaders as a vote in favor of (or against) the President and his agenda. As the Wall Street Journal said of Johnson, "If he can somehow get everyone together on a single bill, he can make a case to the Senate that there is no other plausible alternative. However, getting everyone in the House GOP behind a single plan is a nearly impossible juggle."

Trade — Tariffs are back in the news this week. The President is set to impose tariffs on steel and aluminum imports (expected to be 25%) today.

Asked on Fox News February 7 about the prospect that President Trump's forthcoming reciprocal tariffs against Europe could include an additional amount to reflect the value-added tax (VAT) as it applies to US companies, Stephen Miller, White House Deputy Chief of Staff for Policy, said, "Other nations all around the world use the VAT to get an unfair trade advantage against the United States … And the president is making clear that we are going to pursue a policy of reciprocity. In other words, if we are getting charged 30% by Europe, then we need to charge them 30% in return. If they want to be charged less than 30%, they are going to have to lower their barriers so that it is fair and equal and, yes, reciprocal treatment." He said, "Europe is engaging in predatory practices," and "tech companies are subject to digital taxes."

The President said in remarks prior to meeting with the Japanese prime minister February 7: "I'll be announcing that next week, reciprocal trade, so that we're treated evenly with other countries. We don't want any more or any less. So, I'll be announcing that next week and many other things, having to do not even with trade but other things. But I'll be talking about reciprocal trade sometime next week. We'll have a news conference, and we'll lay it out. Pretty simple."

After the meeting, the President said, "We're going to have tariffs, mostly reciprocal tariffs … And I'm going to be probably meeting on that Monday or Tuesday, have an announcement, probably a news conference. But probably reciprocal tariffs where a country pays — who charges us so much and we do the same. So, very reciprocal because I think that's the only fair way to do it, that way nobody's hurt. They charge us, we charge them. It's the same thing. And I seem to be going in that line, as opposed to a flat fee tariff."

Meanwhile, President Trump on Friday signed an Executive Order (EO) undoing the shutting down of the de minimis exception that was included in the previous February 1 order imposing 10% additional tariffs on imports from China. The de minimis exception allows a shipment of merchandise imported by one person on one day worth up to $800 to generally be imported free of duties and taxes.

Bill intros — Bills of interest introduced in the House February 7 (the Senate was out) include:

• H.R. 1112, to reduce the holding period used to determine whether horses are section 1231 assets to 12 months, Rep. Andy Barr (R-KY)
• H.R. 1113, to allow a 3-year recovery period for all racehorses, Rep. Andy Barr
• H.R. 1128, to increase the rate of the excise tax based on investment income of private colleges and universities and to broaden the definition of applicable educational institution by lowering the threshold with respect to aggregate fair market value per student, Rep. Mike Lawler (R-NY)
• H.R. 1140, to allow individuals with a direct medical care service arrangement to remain eligible individuals for purposes of health savings accounts, Rep. Chip Roy (R-TX)

Congress — The Senate will convene at 3 p.m. today, February 10. At approximately 5:30 p.m., the Senate will hold a procedural vote on the nomination of Tulsi Gabbard to be Director of National Intelligence. The Senate Finance Committee will vote on the nomination of Jamieson Greer to be United States Trade Representative (USTR) on Tuesday, February 11 at 11:30 a.m.

The House is also back in today, with Financial Services Committee bills on the suspension calendar. The Ways and Means Oversight Subcommittee will hold a hearing on "IRS Return on Investment and the Need for Modernization" on Tuesday, February 11, at 10 a.m.

The Ways and Means Health Subcommittee will hold a hearing on "Modernizing American Health Care: Creating Healthy Options and Better Incentives" on Tuesday, February 11 at 2 p.m.