Legislative Update: Tight Speaker Vote Highlights Challenges for Republican-Led 119th Congress

Tight Speaker Vote Highlights Challenges for Republican-Led 119th Congress

The 119th Congress began with a contentious election for Speaker of the House, as Rep. Mike Johnson (R-LA) narrowly secured the position with 218 votes, the minimum required. Initially, several Republican holdouts voted for other candidates, prompting prolonged negotiations and a phone call with President-elect Donald Trump. After discussions, two key dissenters switched their votes, allowing Johnson to avoid a second ballot.

The process highlighted the challenges Republicans face in uniting a fractured GOP conference to pass legislation with a slim 219-215 majority. Lawmakers like Rep. Ralph Norman (R-SC) and Rep. Keith Self (R-TX) cited commitments from Johnson to prioritize issues such as the budget and border security. Meanwhile, Freedom Caucus members, including Rep. Chip Roy (R-TX), expressed reservations about Johnson’s recent leadership but ultimately supported him in advancing Trump’s agenda.

Republicans Chart Strategy for Trump’s Agenda Through Reconciliation Process

Republicans aim to advance President-elect Donald Trump’s policy priorities through the reconciliation process, which bypasses the filibuster. Their plans include addressing border security, extending tax cuts, increasing defense spending, and promoting energy production. However, GOP leaders face critical decisions about whether to consolidate all measures into a single fiscal 2025 reconciliation bill or split them into two separate bills—one for border security, energy, and spending cuts and another for tax measures.

Speaker Mike Johnson (R-LA) favors a single reconciliation bill, believing it would more easily unite the narrowly divided chamber by including provisions appealing to all factions. Senate Republicans, including Majority Leader John Thune (R-SD) and Budget Chairman Lindsey Graham (R-SC), along with some House conservatives, advocate splitting reconciliation into two bills. They argue that this approach would secure immediate border funding while allowing more time to draft a complex tax bill.

President-elect Donald Trump signaled he would let Senate and House Republicans resolve their differences over budget reconciliation strategy without taking a firm stance. While Trump has expressed a preference for the House’s all-in-one approach, he indicated flexibility after meeting with Senate Republicans on Jan. 8, stating both strategies have merit and that the outcome will be effective regardless of the method.

Balancing the reconciliation legislation’s cost remains a significant challenge. Trump’s sweeping agenda, including extending 2017 tax cuts, could cost up to $10 trillion, requiring considerable funding strategies to offset that amount.  Republicans aim to offset the projected $4 trillion deficit impact of tax cuts and other spending through $2.5 trillion in spending cuts tied to a $1.5 trillion debt limit increase. They are also exploring dynamic scoring to account for economic growth generated by tax cuts and using alternative baselines to minimize projected revenue losses from extending tax cuts. However, these methods face procedural hurdles in the Senate. Additionally, Trump’s idea of using tariffs to offset costs has drawn criticism within the party, though it may remain part of the broader strategy.

House Speaker Mike Johnson and Majority Leader Steve Scalise (R-LA) aim to finalize a budget resolution by February, pass a reconciliation bill in the House by April, and complete the process in the Senate by May. However, budget experts have expressed doubt about meeting this timeline, mainly if all measures are consolidated into a single reconciliation package.

Trump and Republicans Prioritize Renewing and Expanding Tax Cuts in 2024 Agenda

Republicans are prioritizing extending expiring 2017 tax cuts and proposing additional tax breaks as they leverage control of both chambers and the White House. Without congressional action, taxes on individuals and businesses will increase in 2026, affecting millions of households and reversing key provisions of the 2017 law, including reductions in the child tax credit, standard deduction, and pass-through business deductions.

Republicans also aim to renew business tax breaks, such as full upfront deductions for research and development, equipment purchases, and interest payments, which were scaled back in the original legislation to meet reconciliation rules. President-elect Donald Trump has also proposed further tax cuts, including exempting tipped wages, overtime, and Social Security benefits from taxes and reducing the corporate tax rate to 15 percent for domestic manufacturers.

Again, discussions on extending tax breaks have centered on pursuing a single reconciliation bill or splitting priorities into two. House Ways and Means Chairman Jason Smith (R-MO) has cautioned that dividing the effort could jeopardize the extension of tax cuts. Republicans face additional strategy challenges, including crafting tax legislation and offsetting $ 4 trillion in costs to extend the cuts and identifying revenue-raising policies, which will be scrutinized among deficit hawks and stir internal debate.   Another contentious issue is the state and local tax deduction cap, dividing Republicans from high-tax blue states and low-tax red states.

Despite all these challenges, the magnitude of the tax cliff that will loom at the end of this year if Congress fails to act makes the passage of tax legislation likely this year.

Capito Formally Named Chair of the EPW Committee, Promises a Quick Nomination Hearing for Zeldin

The Senate adopted a resolution formally naming Senator Shelley Moore Capito (R-WV) chair of the Senate Environment and Public Works Committee.  Capito pledged to expedite the confirmation of former Rep. Lee Zeldin (R-NY) as EPA Administrator, with a hearing expected before President-elect Donald Trump’s Jan. 20 inauguration. Capito expressed her commitment to working with Trump to confirm nominees aligned with shared priorities.

While Zeldin’s confirmation is anticipated, the process may be contentious. Democrats, led by Sen. Sheldon Whitehouse (D-RI), have criticized Trump’s nominees for lacking independence from the White House’s deregulatory agenda.

As Chairman of the Senate Environment and Public Works (EPW) Committee, Capito emphasized her commitment to advancing energy policies, streamlining infrastructure permitting, and protecting public health and the environment. She outlined priorities, including long-term surface transportation reauthorization to improve roads and bridges, water resource development to safeguard communities, and legislation to upgrade drinking water infrastructure and address PFAS contamination.

Capito welcomed the many new members that have been assigned to the committee, including Senators John Curtis (R-UT) and Jerry Moran (R-KS) and Senators Adam Schiff (D-CA), Lisa Blunt Rochester (D-DE), and Angela Alsobrooks (D-MD).

Republicans Target Biden Climate and Energy Policies to Advance Trump Energy Agenda

Congressional Republicans aim to repeal key Biden-era environmental policies and reform the federal permitting system to align with President-elect Donald Trump’s pro-fossil fuel production agenda. Central to this effort is the rollback of the 2022 climate, tax, and health care reconciliation law, which provided incentives and tax credits to achieve net-zero greenhouse gas emissions by 2050.  On tax credits for carbon-free energy, some Republicans have softened their stance, advocating for sparing provisions that have spurred investments in their districts. While GOP leaders have not specified which credits will be targeted, complete repeal seems unlikely due to concerns over wasted taxpayer investments.

Congressional Republicans, who now control both chambers, are revisiting efforts to reform the federal permitting system, which stalled last year. House Natural Resources Chairman Bruce Westerman (R-AR) has expressed optimism about working with President-elect Donald Trump and a Republican majority to advance GOP-driven permitting reform. These efforts will likely focus on changes to the National Environmental Policy Act (NEPA) to streamline fossil fuel project approvals, limit judicial reviews, and reduce climate considerations in the permitting process.

Broader reforms to the permitting process are likely to encounter similar obstacles as previous legislative efforts since 2022, making it difficult to secure the required support from Democrats.

Republicans broadly support increased fossil fuel production and reversing Biden-era environmental policies, with occasional backing from moderate Democrats in energy-producing states. However, achieving the 60 Senate votes needed to alter NEPA or other environmental laws, such as the Endangered Species Act, will be challenging.