12 February 2025 House Budget Committee to consider FY2025 resolution House Budget Committee Chairman Jodey Arrington (R-TX) February 12 released an FY2025 budget resolution that includes a reconciliation instruction to the Ways & Means Committee for not more than a $4.5 trillion net increase in the deficit over 10 years to accommodate extensions of Tax Cuts & Jobs Act (TCJA) provisions expiring at the end of 2025, and few if any other additional tax cuts. The resolution provided instructions to other committees and calls for a minimum of about $1.5 trillion in savings (deficit reduction) generally. The budget will be marked up in the Budget Committee on Thursday beginning at 10 a.m. Committees, including Ways & Means, are required to report reconciliation legislation by March 27. The $4.5 trillion is a net instruction, and revenue offsets could come from Ways & Means to offset some tax cuts. Because it is an FY2025 budget, the window for measuring tax cuts cost is 2025—2034. The Congressional Budget Office (CBO) estimated the cost of tax cut extensions over that window at $4 trillion irrespective of interest costs, which aren't counted for budget purposes. Ways & Means Chairman Jason Smith (R-MO) had called for a minimum $4.7 trillion reconciliation instruction and said any less was saying that President Trump is wrong on tax policy, and ideally wanted $5.5 trillion to accommodate the President's tax cut proposals. He nonetheless called $4.5 trillion a "good starting point." Regarding that $4.5 trillion figure, Chairman Arrington said in Politico, "I think it's clear to me from my discussions with Ways and Means leadership, our leadership and the White House and Treasury officials … that that's enough to do the things that everyone wants to do." That number isn't assured, however, under a claw-back mechanism in the text of the budget, likely addressing spending cut targets sought by conservatives. The budget resolution sets a policy to lower mandatory spending by $2 trillion over the budget window, which is largely made up of Medicare, Medicaid and Social Security payments. Not meeting the target reduces the Ways & Means instruction that allows a deficit increase. "It is the goal of this concurrent resolution to reduce mandatory spending by $2 trillion over the budget window," the budget states. "If the combined deficit reduction provided by authorizing committees is below this target, it is the policy of the Committee on the Budget of the House that the instruction provided to [Ways & Means] should be reduced by a commensurate amount to offset the difference." The Energy and Commerce Committee, which has jurisdiction over the Medicaid program, is instructed to lower the deficit by no less than $880 billion over the budget window, which is close to the anticipated savings of moving Medicaid payments to a per-capita-cap payment system. The Hill Newspaper reported, "The numbers outlined in the budget resolution could also prompt concern among moderates, who may be worried about Republicans slashing programs such as SNAP and Medicaid, with one unnamed member citing significant concerns over Medicaid from members. 'The president has been saying that he doesn't want the Medicaid cuts, and members are concerned about voting for something that is tough and doesn't have a path,' the member said." Speaker Mike Johnson (R-LA) has said Republicans aren't eyeing Medicaid benefit cuts, just requirements to combat fraud, waste, and abuse. The House GOP budget also includes a $4 trillion debt limit increase. Addressing that issue via reconciliation is problematic given that no Democrats will likely support the reconciliation bill and because some House Republicans refuse to vote for a debt limit increase or suspension, and the House majority is 218-215 and likely to drop to 217-215. The budget and related materials are available here.
Document ID: 2025-0463 | |||