House GOP Struggles to Button Up Plan to Pass Trump Agenda

Speaker Mike Johnson (Sipa USA)
Sipa USA
By Yuval Rosenberg and Michael Rainey

Good evening. Elon Musk today sought to defend his controversial effort to scale back the federal government. Standing in the Oval Office, with President Donald Trump seated at his desk nearby, Musk fielded questions while accompanied by his four-year-old son, X. “The people voted for major government reform, and that’s what the people are going to get,” he said.

Musk claimed that the federal bureaucracy is rife with corruption and fraudsters, suggesting without evidence that public employees are lining their pockets at taxpayers’ expense and insisting that his DOGE team has been “maximally transparent.”

Trump on Tuesday signed an executive order directing federal agencies to work with DOGE to “shrink the size of the federal workforce and limit hiring to essential positions.”

House GOP Tries to Button Up Blueprint for Passing Trump Agenda

House Republicans are pressing ahead with efforts to mark up a budget resolution as soon as Thursday even though they have yet to finalize the details of that blueprint and their Senate counterparts have unveiled a different plan.

"We'll be rolling out the details of that probably by tonight," Johnson told reporters at a morning news conference. "We are right on the schedule that we need to be on."

That House schedule includes a recess from Friday until February 24, creating some urgency for the House GOP to build momentum for a single-bill approach to enact President Donald Trump's agenda. That House plan has been held up by intraparty fighting that has also left Republicans in the chamber playing catch-up with impatient GOP senators, who are preparing two separate reconciliation bills. The two chambers will ultimately have to agree on the budget resolution, needed to unlock the spending and tax legislation Republicans was to pass on a partisan basis.

Yet some House Republicans are reportedly "increasingly skeptical" that they'll be able to move ahead with the resolution this week, given lingering disagreements and mounting frustrations among key lawmakers. Questions have also persisted as to whether Republicans can raise the debt ceiling on their own as part of their package, thereby depriving Democrats of a chance to use the matter as leverage.

House Republicans have struggled to balance competing priorities. Budget hawks in the House have insisted on steeper spending cuts. But spending reductions at the level that some prefer may require deeper cuts to Medicaid or other programs, which reportedly would draw objections from more centrist Republicans. On the other hand, smaller spending cuts could require Republicans to adjust their planned tax cuts, either by jettisoning some ideas favored by Trump or shortening the duration of some cuts - options that aren't appealing to other GOP lawmakers or the administration.

House Budget Committee Chairman Jodey Arrington is reportedly preparing a resolution that would require a minimum of $1.5 trillion in spending cuts over 10 years, with the hope of reaching $2 trillion. Those cuts would partially offset tax cuts totaling some $4.5 trillion over a decade.

Politico reports that the House Republican draft plan would call for less than $4.7 trillion in deficit spending in instructions for the House Ways and Means Committee, which "would barely give the committee enough breathing room to extend all the 2017 Trump tax cuts that are expiring at the end of this year, which the Congressional Budget Office estimates will cost around $4.6 trillion - let alone Trump's other tax priorities."

House Ways and Means Chairman Jason Smith is pushing for more room to include Trump's tax cuts. "Let me just say that a ten-year extension of President Trump's expiring provisions is over $4.7 trillion, according to CBO," he said. "Anything less would be saying that President Trump is wrong on tax policy."

But the ultraconservative House Freedom Caucus is pressing for larger spending cuts. "We should not be negotiating with ourselves on how little to cut from Joe Biden's insane spending levels," the group said in a social media post on Tuesday. "The Republican budget resolution should aim for $2.5 trillion in deficit reduction with a bare minimum of $2 trillion in instructions."

The Freedom Caucus defied House Republican leadership this week and released its own plan "to kickstart the resolution process." The "Emergency Border Control Resolution" adopts a two-step approach like that favored by Senate GOP leaders. The first step would provide $200 billion in funding for border security and defense combined with $486.3 billion in spending cuts, including a rollback of Biden student debt cancelation and electric vehicle programs. The plan would also raise the debt limit by $4 trillion.

Rep. Andy Harris of Maryland, the Freedom Caucus chair, reportedly said that the group would also release its tax plan, intended as a separate bill, this week.

"What holds everyone back is, what's the level of deficit reduction we're going to agree to, and is it real deficit reduction?" Harris said, according to Roll Call. "Because if you project unrealistic growth projections and assume that's going to bring in revenue, to us that's not true deficit reduction. Deficit reduction is when the CBO is going to score a reasonable GDP growth rate."

The bottom line: House Republican leaders expressed optimism that they'll be able to resolve intraparty differences and begin consideration of a budget resolution, but it's still not clear what their plan includes or if it can get the GOP votes necessary. The Senate Budget Committee, meanwhile, is set to hold a Wednesday mark-up of its own plan - includes border security, defense and energy measures but leaves tax changes for later. Trump administration officials reportedly said Tuesday that they need $175 billion in additional border money quickly, which could help the Senate plan gain some momentum, but House leaders have said they won't take up the Senate blueprint, with Johnson calling it a "non-starter."

Quote of the Day

"You gotta light things on fire that burn the brightest and have the most distinctive smell of waste, fraud and abuse."

− An unnamed ally of the White House speaking to Politico about the rapid-fire assault on the federal government being led by President Donald Trump and Elon Musk. Politico's Megan Messerly, Holly Otterbein and Dasha Burns report that the effort's first targets, including U.S. AID and the Consumer Financial Protection Bureau, were chosen because they carry little political risk while addressing long-held conservative complaints.

"The agencies are little-known and opaque to most Americans," they write. "Trump and his allies, meanwhile, have sold them to their base as examples of an unchecked bureaucracy that is aiding other countries, creating more red tape, researching climate change or promoting policies out of step with their agenda."

A White House official said the initial moves by the administration took aim at "low-hanging fruit." But the Politico team says some Trump allies suggest that the next programs targeted for cuts, such as the Departments of Defense, Education and Health and Human Services, could be more politically challenging and invite more pushback from lawmakers and their constituents concerned about local schools and military bases being hurt. Already, some Republicans have raised concerns about proposed cuts to the National Institutes of Health research funding.

Those next targets might also make it easier for Democrats to land some political attacks.

Number of the Day: $489 Million

A government watchdog says that more than $489 million worth of food aid is at risk of spoiling as it sits in warehouses and ports around the world, following the pause in spending at the U.S. Agency for International Development imposed by the Trump administration.

The report from USAID's inspector general says that waivers in the funding pause should allow life-saving activities such as supplying food aid to continue. However, significant staff reductions at the agency's Bureau of Humanitarian Assistance have "significantly impacted USAID's capacity to disburse and safeguard its humanitarian assistance programming." Most USAID staff and contractors have been placed on leave.

The inspector general noted that USAID routinely stores food - purchased from U.S. farmers as a matter of law - in warehouses around the world, including "29,000 metric tons in Houston, Texas, valued at nearly $39 million, more than 40,000 metric tons in a warehouse in Djibouti in East Africa valued at $40 million, and over 10,000 metric tons in a South African warehouse valued at $10 million." Additionally, over 500,000 additional metric tons of food are currently in transit or ready to be shipped; these supplies are now in limbo, "subjecting them to spoilage, unanticipated storage needs, and potential diversion."

Hours after the release of the report, USAID inspector general Paul Martin was fired by the Trump, administration. Martin said no reason was provided for his termination.

Fed Chief Says US Economy Is Strong, No Hurry on Rate Cuts

Appearing before the Senate Banking Committee Tuesday, Federal Reserve Chair Jerome Powell delivered a positive outlook on the U.S. economy while throwing cold water on hopes for interest rate cuts anytime soon.

"We're in a pretty good place with this economy," Powell told lawmakers. "We want to make more progress on inflation. And we think our policy rate is in a good place, and we don't see any reason to be in a hurry to reduce it further."

Powell said in his prepared remarks that the labor market appears to be "solid" and stable, with job gains averaging 189,000 per month over the last four months. At 4%, the unemployment rate is low, and wage growth remains positive, though "not a source of significant inflationary pressures."

On interest rates, Powell said the central bank's current stance, following three rate cuts in 2024, is working for now. "We know that reducing policy restraint too fast or too much could hinder progress on inflation," he said. "At the same time, reducing policy restraint too slowly or too little could unduly weaken economic activity and employment."

Asked if the Fed had pulled off a soft landing for the U.S. economy - in which the inflation rate falls while the labor market remains healthy - Powell said it was "not for me to say."

Powell also avoided giving an opinion on President Trump's decision to raise tariffs, which some economists fear will be inflationary. "It's not the Fed's job to make or comment on tariff policy," he said.

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