Budget Reconciliation Update

Last week, the Senate passed a FY 2025 budget resolution by a vote of 52-48 (Sen. Rand Paul (R-KY) joined all Democrats in opposing the measure). The chamber adopted just one amendment, adding language that calls for the final bill to prioritize “strengthening and improving Medicaid for the most vulnerable populations,” and extending the life of the Medicaid trust fund.  Notably, Sen. Cassidy (R-LA), filed an amendment that would have struck references to “current policy” accounting – laying down a marker of his opposition to Republican leadership’s preferred approach to scoring any reconciliation bill in a way that would allow them to significantly expand the scope of tax cuts they could include without revenue offsets. The Senate budget resolution treats only increased spending for border security, immigration and defense programs, offset by spending cuts leaving tax and deeper spending cuts for a later FY 2026 budget reconciliation package.  Leadership is framing the measure as a backup plan should the House fail in its effort to pass a single budget reconciliation bill that incorporates the Republican’s revenue and spending priorities.

This week, the House worked to consider a broader FY 2025 budget resolution; however, with current party ratios of 218-215, the Republicans can afford to lose just one vote, assuming all members show up. Even if the House can pass its budget resolution this week or at some point thereafter, the two chambers will have to agree to the same approach before they can begin drafting a reconciliation bill.