Republicans Prepare For Trifecta

  • This week has some of the first confirmation hearings
  • Trump summons Congressional Republicans to Mar-a-Lago
  • Can Trump pressure 38 Republicans who voted against increasing debt ceiling?
  • Big parliamentary question ─ one or two Reconciliation Bills

This week will see the first Senate hearings on some of some of the key nominees for incoming President Trump’s cabinet.

Among the most watched is likely to be the nominee for Defense Secretary ─ Pete Hegseth. When under the Congressional spotlight, there is always the chance of news developing, but Hegseth is a professional television figure who should be well prepared. Other nominees set for confirmation hearings this week are Trump’s nominees for Attorney General ─ Pam Bondi ─ and Secretary of State ─ Marco Rubio.

On the policy front, Trump summoned Congressional Republicans down to Mar-a-Lago for strategy sessions, as the Congress and the White House worked to develop a first 100-day agenda.

The challenge Trump tried to work on this weekend was how to best navigate passage of his agenda with a razor thin majority in the House.

Among the groups that came to Florida was the very conservative Freedom Caucus. The group has already torpedoed efforts by Trump and Speaker Mike Johnson to increase the debt ceiling in the final days of the Biden Administration.

As the Congress dealt with the funding of the government through a Continuing Resolution (CR), the future President and the Speaker wrote legislation that would extend government funding. In the same bill, they also tried to increase the debt ceiling for two years. Since the Democrats were not partners in the negotiations, the bill needed to pass with only Republican votes. The Freedom Caucus never supported the deal, and 38 Republicans voted no, sinking the effort.

By summoning these conservative Republicans down to Mar-a-Lago, the future President tried to convince his fellow Republicans, that they would need to support a Republican-only effort to create new policies on central issues including immigration, taxes, energy, and spending reductions. No Democrats will support this effort, and for February and March, with two House Members leaving to serve in the new administration, the Republican majority will be down to two votes – 217 Rs to 215 Ds. As a bill dies on a tie vote, if one Republican votes with the Democrats, any Trump initiative would die on a 215 to 215 vote. If the objecting Republicans just don’t vote, the leadership can only lose two votes to avoid a 215-Rs to 215-Ds tie.

Republicans in Washington, D.C., have developed a plan to pass the Trump agenda under the budget process. That requires two steps: first a budget resolution and then a Reconciliation Bill to implement the budget resolution. This was the process used in Trump’s first term to pass his tax cut program and during the Biden Administration when Congressional Democrats used Reconciliation to pass the so-called Inflation Reduction Act, which expanded Obamacare and created new energy efficiency programs costing billions of dollars. As with the Republican plan, this year, the Biden program passed with Democratic votes.

As the Congress and the new administration focus on Reconciliation, there’s one technical issue that needs to be resolved in the next few weeks. It’s whether to pass the entire Trump agenda in one Reconciliation Bill or divide the agenda into two bills that would allow quick early action on immigration and energy proposals first and then have a second bill for renewing Trump’s tax proposals. However, increasing the national debt ceiling could be part of any package, and the House leadership is concerned that if everything isn’t in one bill, it will be hard to get some of the Freedom Caucus Republicans to vote for a bill that raises the debt ceiling. In fact, there is some concern that a handful of the most conservative Republican will never vote for any bill that increases the debt ceiling.

Over this past weekend, as Trump talked to the different factions in the Party, he started referring to the challenge with “one big, beautiful bill.” However, he also stated that a two-bill strategy may be possible. While this may seem trivial, with the small Republican majority, it could be the make-or-break decision in getting the Trump agenda passed.

Big decisions to make with only one week to go before the Inauguration of Trump 47.

Disclosures (show)

Sign in to read the report!

We have detected you are an active member!

Ray: 5484c4-300b0c-c338a2-02ee89-ac203f

Want to receive Regular Market Updates to your Inbox?

I am your default error :)

Events

Trending tickers in our research