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(1) BUDGET RECONCILIATION BEGINS: Committees have until Friday, May 9 to write detailed tax and spending legislation including tax cuts, spending increases for defense and immigrant deportations, and large spending cuts likely including Medicaid, food stamps, and education programs.
(2) TRUMP’S ECONOMIC “PERFECT STORM”: tariff wars, visa fears, research funding cuts, a shrinking U.S. labor force, and exploding public debt are risking America’s economic future.
(3) TRUMP SENDING RESCISSION PACKAGE TO CONGRESS to cancel funds for Public Broadcasting, the U.S. Institute for Peace, and Foreign Aid.
(4) MAJOR DEVELOPMENTS ACROSS GOVERNMENT: 100 days of historic failure; Trump cuts threaten to hinder response to Bird Flu; Trump’s deportations without due process refuted by intelligence agencies and halted by Supreme Court; Trump withholds funds from Head Start, seeks to end program; Federal judge blocks CFPB mass firings; DOGE holds up health grants, aims for AmeriCorps, NEA, Millennium Challenge Corp.; Judge orders release of climate grants; Trump cuts threaten food safety.
(5) THREE FORMER PRESIDENTS PUSH BACK against the slide to autocracy; and more anti-Trump rallies.
1. BUDGET RECONCILIATION BEGINS – Congressional committees have until Friday, May 9 to write detailed tax and spending legislation including massive tax cuts, large spending increases for defense and deportation of undocumented immigrants, and massive spending cuts likely including Medicaid, food stamps, and education programs.
The House and Senate are currently out for the Easter/Passover recess. When they return April 28, 2025, they will have just two weeks to convene and consider legislative language to fulfill their 10-year budget instructions. These committee meetings will be critical since legislation is difficult to change once it is reported out by the committees (due to tight restrictions on Floor amendments in the House and Senate).
Get daily updates on reconciliation actions at our new Budget Reconciliation Tracker: https://GovBudget.com/reconciliation-tracker/.
The tax and spending provisions that will be under consideration include these big ticket items:
Extension of the expiring portions of the 2017 tax cuts, new tax cuts advocated by President Trump, and raising the debt ceiling—all of which will be handled by the House Ways & Means and Senate Finance Committees. Key issues under consideration: (1) Whether to “count” the tax cut extensions as multi-trillion-dollar revenue losses to the Treasury; (2) whether to extend tax cuts for all taxpayers or let taxes increase for wealthy taxpayers; (3) whether to raise the $10,000 cap on state and local tax (SALT) deductions; (4) whether to maintain or increase the $2000 Child Tax Credit (CTC); (5) whether to reduce or eliminate taxes on tip income, overtime pay, and Social Security benefits; (6) whether to reduce the corporate income tax; (7) whether to bring back business breaks for research and capital investments; and (8) whether to raise the debt ceiling by $4 trillion or $5 trillion.
Increased spending of $200 - $350 billion for mass deportations will be considered by the House and Senate Judiciary and Homeland Security Committees.
Increased spending of $100 - $150 billion for missile defense and border operations will be considered by the House and Senate Armed Services Committees.
The House Energy & Commerce Committee (with jurisdiction over Medicaid and Medicare) is instructed to cut spending by at least $880 billion over 10 years. This has drawn pushback from 12 House Republicans who said in a letter to the GOP leadership, “we cannot and will not support a final reconciliation bill that includes any reduction in Medicaid coverage for vulnerable populations." However, the GOP may proceed with cuts aimed at people receiving Medicaid as a result of the Affordable Care Act’s Medicaid expansion.
The House Agriculture Committee (with jurisdiction over food stamps and agriculture programs) is instructed to cut spending by at least $230 billion.
The House Education and Workforce Committee, which has jurisdiction over student financial aid, education, and training programs is instructed to cut spending at least $330 billion.
The House Oversight and Government Reform Committee, which has jurisdiction over federal worker retirement and benefits, is instructed to cut $50 billion.
The House Transportation and Infrastructure Committee, which has jurisdiction over climate and infrastructure investments, is instructed to cut $10 billion.
Other reconciliation instructions and committee markup schedules are detailed in our new Reconciliation Tracker.
Following committee action, the various House committee and Senate committee language will be packaged by their respective Budget Committees into House and Senate reconciliation bills for House and Senate Floor consideration.
The Senate’s bill will be subject to the strict requirements of the Senate’s Byrd Rule, under which provisions that are not “budgetary” in nature can be stripped from the bill on the Senate Floor. The Byrd Rule is explained in detail in chapter 4 of Trillions: A Primer on Federal Spending, Taxes, the U.S. Debt Ceiling and Fiscal Law. Paid subscribers to this Substack column will receive a free copy of the book by emailing your book request and delivery address to: trillionsbook@gmail.com.
If the two chambers pass their respective reconciliation bills in May, they will appoint a House-Senate conference committee to resolve their differences. It is here that the process could grind to a halt because the House and Senate remain far apart on Medicaid cuts, food stamp cuts, education cuts, the tax issues summarized above, and the overall deficit impact of the legislation. However, reconciliation bills are filibuster-proof (requiring only 50 votes for Senate passage) so the GOP will not require any Democratic votes for final passage if they are able to resolve these internal differences.
The author worked on multiple reconciliation bills for the Senate Finance and Senate Budget Committees and the White House Office of Management and Budget. See GovBudget.com/reconciliation-tracker/ for daily updates on Reconciliation Committee Action. Call (202) 818-8578 for media interviews and speaking engagements on budget reconciliation.
2. TRUMP’S ECONOMIC “PERFECT STORM”: tariff wars, visa fears, research funding cuts, a shrinking U.S. labor force, and exploding public debt are risking America’s economic future.
Last year, economists at the World Bank were praising the U.S. economy as the engine driving global economic growth. Now, three months into the Trump presidency, his policies are triggering a “perfect storm” that is rapidly weakening America’s economic outlook.
(1) Global tariffs have increased costs for U.S. companies that import goods and components, and his tariff war with China is hurting U.S. agricultural exports and cutting off supply chains to U.S. companies. Most recently, China has halted imports of Boeing aircraft and exports of critical rare earth minerals to the U.S.
(2) The arbitrary and capricious cancellation of student visas are discouraging the best and the brightest foreign students from coming to the U.S. to study at America’s universities and join America’s entrepreneurs and researchers. Read more.
(3) The abrupt reductions in research funding for America’s universities and the National Institutes of Health are undercutting technological and medical advancements and overall U.S. global competitiveness. Read more.
(4) The abrupt shrinking of the U.S. labor force due to mass deportations will undermine one of the key drivers of recent U.S. economic growth – a young, healthy, and growing labor force. Last year, the nonpartisan Congressional Budget Office projected “the higher growth rate of… GDP over the next five years stems mainly from rapid growth in the labor force, reflecting a surge in the rate of net immigration from 2022 to 2026 compared with recent years.” An abrupt reduction in immigrant labor will reverse this economic growth.
(5) The Trump budget reconciliation bill, currently being written by GOP committee chairs in the House and Senate could, if passed, explode an already-out-of-control public debt by extending massive tax cuts and increasing spending for defense and deportation operations. Annual interest payments on the public debt could increase from $1 trillion per year to $2 trillion per year.
This reversal of America’s economic outlook has happened at an alarming rate. Already, the volatility of U.S. tariffs has scared investors, with the dollar losing almost 10 percent of its value, and has led to investors “selling U.S. government bonds, long the world’s safe haven.”
For daily updates see GovBudget.com/tariffs, GovBudget.com/economic-news, Bloomberg tariff tracker, NYTimes Tariff Tracker, Washington Post Tariff Tracker.
3. TRUMP TO SEND RESCISSION PACKAGE TO CONGRESS to cancel funds for Public Broadcasting, the U.S. Institute for Peace, and Foreign Aid.
The Trump Administration is reportedly planning to send a rescission package to Congress when it returns from recess that would end current year funding of the Corporation for Public Broadcasting (that funds PBS and NPR) and the U.S. Institute for Peace, and cancel certain U.S. foreign aid funds.
Under the Impoundment Control Act, once the rescission proposal is submitted to Congress, the funds are withheld for 45 days; if Congress approves the rescissions, the funding is canceled; if Congress does not act on the rescissions, the funds must be released.
The rescission package is a response to pressure from deficit hawks in the Senate concerned about the lack of spending cuts required from Senate committees in the recently-passed budget resolution.
4. MAJOR DEVELOPMENTS ACROSS GOVERNMENT: 100 days of historic failure; Trump cuts threaten to hinder response to Bird Flu; Trump’s deportations without due process refuted by intelligence agencies and halted by Supreme Court; Trump withholds funds from Head Start, seeks to end program; Federal judge blocks CFPB mass firings; DOGE holds up health grants, aims for AmeriCorps, NEA, Millenium Challenge Corp.; Judge orders release of climate grants; Trump threatens food safety.
FIRST 100 DAYS: Read Dana Milbank’s excellent summation, Trump is wrapping up 100 days of historic failure.
TRUMP CUTS THREATEN TO HINDER RESPONSE TO BIRD FLU: The Trump Administration has laid off more than 130 key scientists at the Dept. of Health and Human Services as the Bird Flu (H5N1) poses a growing risk of another pandemic.
TRUMP’S DEPORTATIONS-WITHOUT-DUE-PROCESS refuted by intelligence agencies and halted by SCOTUS; risk of constitutional crisis: President Trump invoked the Alien Enemies Act of 1798 to justify deportations without due process. The rarely used law empowers the executive branch to summarily remove foreigners whose home country is at war with the United States or waging a “predatory incursion” into U.S. territory. Trump proclaimed that the Venezuelan gang “TdA” is perpetrating an “invasion” of the U.S. “at the direction” of the regime of Venezuelan President Maduro—an assertion now refuted by U.S. intelligence agencies.
Early Saturday morning, the Supreme Court blocked further summary deportations under the Act. "The Government is directed not to remove any member of the putative class of detainees from the United States until further order of this Court," the justices said in a brief, unsigned decision. “At issue,” reports Reuters, “is whether the Trump administration has met the Supreme Court's standard for providing the detainees due process before sending them to another country.” There is widespread concern that this case carries the risk of a full-blown constitutional crisis, if President Trump ignores the Court and proceeds with the deportations.Trump withholds funds for Head Start; seeks to end program. Senate Appropriations Democrats say data shows a steep decline in Head Start funding going out the door so far this year, as the administration hollows out offices and eyes eliminating the program. “The Head Start program has provided comprehensive early childhood education and development services to low-income children since 1965. The program seeks to promote school readiness through the provision of educational, health, nutritional, social, and other services,” explains the nonpartisan Congressional Research Service. Head Start serves 750,000 kids in all 50 states. Recent news reports say the soon-to-be released Trump Budget for 2026 will propose elimination of Head Start.
Federal judge blocks CFPB mass firings: “A federal judge on Friday temporarily blocked the Trump administration’s most recent attempt to dismantle the Consumer Financial Protection Bureau after the agency’s leadership moved to fire more than 1,400 employees on Thursday,” reports the Washington Post. The independent federal agency was created in the wake of the 2008 financial crisis to supervise the nation’s largest banks and protect consumers from abusive practices in the home mortgage, credit card, financial services and consumer loan industries.
DOGE holds up health grants, aims for AmeriCorps, NEA, Millenium Challenge Corp.: The Washington Post reports that DOGE “is putting new curbs on billions of dollars in federal health-care grants, requiring government officials to manually review and approve previously routine payments — and paralyzing grant awards to tens of thousands of organizations…. (which) has left thousands of payments backed up, including funding for doctors’ and nurses’ salaries.” In other DOGE actions last week, Elon Musk’s unaccountable band of coders is now focusing its illegal budget cutting on AmeriCorps, the National Endowment for the Arts, and the Millennium Challenge Corporation. Read more.
Judge orders release of climate grants: The Trump administration must release billions of dollars for climate and infrastructure-related projects paused in January. Read more.
Trump cuts threaten food safety: “The F.D.A. has already indicated that it will conduct fewer food and drug safety investigations because of its greatly reduced staff,” said a recent analysis.
Other Key Court Actions of the Week Impacting Agencies and Programs, Immigration, and Civil Rights: See the Just Security website or WP Tracker).
5. Three Former Presidents Pushed Back Against the Slide to Autocracy; and More Anti-Trump Rallies.
President Bill Clinton spoke Saturday morning at an emotional ceremony in Oklahoma City to commemorate the bombing 30 years ago of the Alfred P. Murrah Federal Building, which killed 168 people: “It’s like everybody is arguing about whose resentments matter most, whose resentments are more valid, when it’s okay to stretch the truth a little bit to gain an advantage,” Clinton said. “If our lives are going to be dominated by the effort to dominate the people we disagree with, we are going to put the 250-year march to a more perfect union at risk.”
President Barack Obama encouraged universities and law firms to resist intimidation from President Donald Trump's administration. Speaking at Hamilton College, Obama said he was "troubled by the idea that a White House" would order federal agencies to cancel contracts to firms connected to political rivals. "That kind of behavior is contrary to the basic compact we have as Americans.”
President Joe Biden offered his first public critique of President Donald Trump’s second term Tuesday, painting the Trump administration’s handling of the Social Security Administration as destructive. “There’s 7,000 employees, 7,000 out the door… (i)ncluding the most seasoned career officials. Now they’re getting ready to push thousands more out the door…. They’re shooting first and aiming later…. (T)he result is a lot of needless pain and sleepless nights.”
Anti-Trump rallies were held across the U.S. on Saturday to protest administration’s policies.
This week’s must-read: A new book by author Michael Lewis, Who is Government? The Untold Story of Public Service
About the author: Charles S. Konigsberg, J.D., served as Assistant Director at the White House Office of Management and Budget for three successive Budget Directors; General Counsel at the U.S. Senate Finance Committee; Minority Chief Counsel at the U.S. Senate Rules Committee; Staff Attorney at the U.S. Senate Budget Committee; Director of Congressional Affairs at CFPB and CNCS; and Staff Director of a national bipartisan budget task force.
He is author of the book, Trillions: A Primer on Federal Spending, Taxes, the U.S. Debt Ceiling, and Fiscal Law. (Contact the author for the 2024-25 edition. The 2025-26 edition will be published by Amazon.com after release of the Trump FY 2026 budget this spring.)
He is also Publisher of Appropriations.com which tracks appropriation bills; and GovBudget.com which tracks major federal developments, by subject area, each day.
Speaking engagements and press interviews can be scheduled by calling: (202) 818-8578 or (301) 509-5688. Email comments, suggestions, and questions to: ckonigsberg@capitolpublicpolicy.com.
Brilliant as always....