1. Senate Passes Slimmed Down Budget Plan Leaving Tax Cuts and Spending Cuts Until Later in the Year—Awaits House Action This Week on Single-Bill Approach
In the week just ended, the full Senate debated and approved 52-48 the FY 2025 Budget Resolution, S.Con.Res. 7, a framework to advance part of the Trump Agenda. The resolution itself, does not provide funding; rather, the resolution (if also passed by the House) would activate “budget reconciliation instructions” to several committees of each chamber to develop legislation that increases federal spending by $345 to $520 billion for defense, border security, and immigration enforcement. (Sponsors say their intent is to increase spending by $345 billion, but the reconciliation instructions call for $520 billion in new spending.)
While sponsors of the plan gave lip service to finding offsetting spending cuts, committees would be required to produce only $5 billion in total budgetary offsets.
However, the House has other plans—and so does the Administration. This week, the House will take up H.Con.Res. 14, the House Budget Committee’s plan that attempts to move all of the Trump agenda as a single bill—an approach preferred by President Trump.
The House plan includes: massive tax cuts favoring upper income taxpayers; spending increases for defense, border security, and immigration enforcement; and spending cuts to Medicaid, food stamps (SNAP) and other programs. Together, the tax cuts, spending increases, and spending cuts would boost the public debt by a net $4 trillion.
Highlights of the House budget plan’s reconciliation instructions to be considered this week:
· The House tax-writing committee (Ways & Means) would be ordered to extend the 2017 tax cuts at a cost of $4.5 trillion over 10 years;
· The committees with jurisdiction over border security and immigration enforcement (Homeland Security and Judiciary) would be ordered to increase spending by a combined $200 billion ($90b from Homeland, $110b from Judiciary);
· The House Armed Services Committee would increase defense spending by $100 billion;
· The committee that writes Medicaid legislation (Energy & Commerce) would be ordered to cut spending by $880 billion over 10 years;
· The committee that handles food stamps and other nutrition programs (Agriculture) would have to cut spending by $230 billion over 10 years;
· The committee that handles education and training (Education and Workforce) would have to cut spending by $330 billion over 10 years; and
· The bill would increase the nation’s Debt Limit by $4 trillion (recall that Trump increased the public debt by nearly 50% in his first term).
Next steps: If the House passes this resolution, the Senate will need to pass it, as well, in order to activate the reconciliation instructions. It’s a tall order—the House GOP, due to its razor thin majority, can only lose the support of one Republican; otherwise, the resolution fails (assuming all Democrats oppose it).
If the House resolution fails, the Senate-passed budget resolution becomes Plan B, and the House would need to pass the Senate’s plan for defense, immigration enforcement, and border spending increases now, leaving major tax cuts and major spending cuts until later.
Once a (House or Senate) budget resolution passes in identical form in both chambers, it activates the budget reconciliation instructions which give the various committees in each chamber only a couple weeks to report detailed legislation—which the respective Budget Committees then combine into a single reconciliation bill for filibuster-proof Floor consideration requiring only 50 votes for Senate passage (the GOP holds 53 seats in the Senate).
Looking ahead, the Senate’s slim reconciliation bill increasing defense and border spending would likely pass both chambers. However, the House all-in-one bill might very well fail once moderate Republicans are faced with legislation mandating enormous cuts to Medicaid, food and education programs—unless they scale back the spending cuts considerably.
In addition, either approach—the Senate’s small bill or the House all-in-one bill—will have to contend with the Senate’s powerful “Byrd Rule,” which enables any Senator to strike from a reconciliation bill any provision the Senate Parliamentarian deems to be a policy change without a budgetary impact. (The Rule’s rationale is that the fast-track filibuster-proof reconciliation process should only be used for budgetary matters.) The Byrd Rule also prevents long-term deficit increases, which is why tax cuts are typically limited to 10 years.
For a detailed, plain English explanation of the Budget Resolution, Budget Reconciliation and the Byrd Rule, see the Author’s book, Trillions.
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2. Less than 3 Weeks to Government Shutdown--No Agreement in Sight as OMB/DOGE actions complicate negotiations
Expiration of FY 2025 funding at midnight Friday, March 14: Temporary funding for the current fiscal year expires on March 14, 2025. Without passage of another temporary funding bill or the regular appropriation bills for the current year, the government will shut down as required by the Antideficiency Act. If you doubt this will happen, recall that the longest government shutdown occurred during the first Trump term from December 22, 2018, through January 25, 2019, over funding for the border wall.
The outlook is complicated because Republicans lack the votes to pass an FY 2025 funding measure on their own (60 votes being required in the Senate), while some Democrats may demand provisions that limit or rollback recent actions relating to the OMB funding freeze, DOGE worker firings or access to sensitive information at the IRS (see the next article).
Follow daily developments on the impending shutdown at Appropriations.com and developments on the Budget Resolution and Debt Limit at GovBudget.com.
In order to continue receiving this weekly update, please sign up for a free subscription to Trillions: Week in Brief at: fedbudgetguy.substack.com/.
3. OMB, DOGE Accelerate Cuts in Resources and Workers While Litigation Continues
Russell Vought, White House Budget (OMB) Director, and Elon Musk, de facto director of the White House government efficiency or “DOGE” office, are continuing to advance federal firings, agency shutdowns, elimination of websites, and spending cuts, while also seeking access to sensitive data at the Internal Revenue Service. The following are highlights from the past week including key court actions:
· Musk gives federal workers 48 hours to explain what they did last week, or face forced resignations. However, several officials tell workers not to respond.
· DOGE is pressing for access to tax return information, raising serious privacy concerns for businesses and individuals.
· Trump to eliminate most USAID jobs following court ruling.
· Agencies and operations across government face deep personnel cuts including: Defense Dept. civilians; Federal Aviation Administration; Internal Revenue Service; Agriculture Dept. bird flu response; CIA; FHA mortgage insurers; FDIC bank deposit insurers; National Park Service; Disaster Response; and National Endowment for Democracy.
· Key court actions during the week just ended (for full details, link to the Just Security website): Judge Vargas granted a preliminary injunction barring Treasury from granting access to data systems to DOGE; Judge Contreras granted a temporary order that Cathy Harris continue to serve as Chair of the Merit Systems Protection Board; Judge Nichols allowed USAID to place employees on administrative leave, but Judge Ali enforced a temporary order barring blanket suspension of foreign aid; Judge Chutkan denied States’ motion for a temporary injunction to stop DOGE operations finding no showing of imminent, irreparable harm; Judge Jackson barred OMB Director Vought from destroying CFPB records or terminating employees without cause; the Supreme Court, in a procedural action, allowed a temporary order to remain in place barring termination of the head of the federal whistleblower protection office; the Associated Press filed a motion for a restraining order to restore their press access to the White House; and Judge Abelson temporarily blocked parts of Trump’s orders targeting DEI initiatives.
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4. Trump’s Push to Expand Presidential Power Continues
The Administration’s push to expand presidential powers continued this week:
· President Trump abruptly removed six top military officers deepening fears he “intends to impose his political will on the nonpartisan institution.”
· Sen. Jack Reed, top Democrat on the Armed Services Committee said, “firing military officers for perceived disloyalty endangers the nation.”
· Washington Post reports that the Trump Administration is getting “close to the red line of openly defying judges” by continuing to hold back funding.
· Trump signs order to claim power over independent agencies.
· Staff at multiple agencies have been instructed not to answer questions from Congress.
· Trump has dismantled federal operations aimed at stopping foreign influence over U.S. elections.
· Washington Post reports Trump is expected to take direct control of the U.S. Postal Service despite its legal status as an independent nonpartisan entity since 1970, raising fears of a privatization effort that would end universal service to all Americans.
· At a meeting with Governors this week, Trump said, “we are the federal law.”
· Quoting the dictator Napoleon, Trump says no laws are violated if he “saves the country.”
· Worth reading: Congress has itself to blame for current constitutional crisis.
5. Budget Fact Check: The imaginary "DOGE Dividend"
The Washington Post reported that President Trump is considering sending to all Americans a "dividend" check based on "budget savings" he expects his DOGE office to rack up. “There’s even under consideration a new concept where we give 20 percent of the DOGE savings to American citizens,” Trump said. “The numbers are incredible... so many millions, billions, hundreds of billions.” However, the so-called DOGE dividend is a sham.
First, the DOGE savings claims appear to be highly inflated. A New York Times analysis found that a review of all DOGE claimed savings are “full of accounting errors, outdated data and other miscalculations… Some contracts the group claims credit for were double- or triple-counted. Another initially contained an error that inflated the totals by billions of dollars. In at least one instance, the group claimed an entire contract had been canceled when only part of the work had been halted. In others, contracts the group said it had closed were actually ended under the Biden administration…. The numbers…also don’t account for additional termination costs the government will have to pay to close these contracts.” Although the DOGE activities purport to focus on efficiency, “most of the canceled contracts appear to relate to…shuttering of USAID and the elimination of government programs on diversity, equity and inclusion… The website says the effort has saved $55 billion in total, but has provided no details on its ‘wall of receipts’ for the bulk of the money.” (emphasis added)
Second, there is no pot of "budgetary savings" sitting in the U.S. Treasury waiting to be tapped for payments to taxpayers. The U.S. is currently spending each year $1.9 trillion more than it takes in from taxes and other revenues. If efficiency measures can save money, that's great, if the cuts are made with full awareness of the effects on everyday Americans. However, a recent report added up the claimed DOGE savings and they totaled only about $2 billion. Assuming these savings claims are legitimate—and we won't know until auditors at the nonpartisan Government Accountability Office review the cuts—the DOGE savings simply reduce the current $1.9 trillion deficit by a mere one-tenth of one percent.
Since the government continues to run a huge deficit, there are no funds from which to pay the so-called "DOGE dividends." Any checks sent to taxpayers would have to be financed by the Treasury Department issuing more bonds—further increasing the public debt and annual interest payments which are now close to $1 trillion per year.
In short, a "DOGE dividend" does not exist until the federal budget runs a surplus. Only then would there be surplus monies from which to send out checks to taxpayers. The last time that happened was under President Bill Clinton who ran four budget surpluses in a row—until subsequent administrations drove the Federal budget into the ditch with trillions in tax cuts and spending increases that were not paid for with budgetary offsets. How did Clinton balance the budget four times? We'll explain how in next week's Trillions. (Hint: it was a serious bipartisan effort that began with George H.W. Bush and continued with Clinton, plus a lot of negotiation with congressional Democrats and Republicans.)
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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. (2024-25 edition currently available at LexisNexis.com; 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; and GovBudget.com which tracks major federal developments, by subject area, each day.
Press interviews and Washington updates for your organization can be scheduled by calling: (202) 818-8578 or (301) 509-5688. Email comments and suggestions to: ckonigsberg@capitolpublicpolicy.com.
Nailing it again, week after week!