House, Senate Republicans Have Different Budget Plans—Here’s What to Know

(L) Elect Majority Leader Sen. John Thune (R-S.D.) after the Senate Republican leadership election in Washington on Nov. 13, 2024; (R) House Speaker Mike Johnson speaks during the GOP weekly press conference on Capitol Hill in Washington on Nov. 19, 2024. Madalina Vasiliu/The Epoch Times

Republicans in Congress are moving rapidly to pass President Donald Trump’s agenda through sweeping spending and policy legislation even as divisions linger between House and Senate Republicans on the best approach.

Both chambers agree on the broad outlines of the agenda, including changes to border, defense, energy, and tax law. The latter is especially politically urgent to Republicans, as most of Trump’s 2017 tax cuts—including personal income tax rate cuts—expire by the end of the year.

They also agree that they'll rely on budget reconciliation, a highly restricted parliamentary process that bypasses the normal 60-vote filibuster threshold in the Senate.

But House Speaker Mike Johnson (R-La.) and Senate Majority Leader John Thune (R-S.D.) are at odds over specifics, with House Republicans preferring an all-in-one package as Senate Republicans are moving forward with a two-part plan.

Here’s what to know about the two chambers’ differing approaches.

What Is Budget Reconciliation?

Budget reconciliation, a parliamentary procedure dating back to 1974, is essential to congressional Republicans’ plans.

Most major legislation passed under normal rules is immediately dead-on-arrival in the Senate due to the 60-vote filibuster threshold. Budget reconciliation avoids the filibuster entirely—but the process is highly restricted.

Under the Senate’s Byrd rule, reconciliation provisions must have a more than “merely incidental” impact on the federal budget and may only relate to taxing, spending, and the national debt.

Any provision that increases the deficit beyond the budget window—usually 10 years—must sunset before the end of that period, meaning that only paid-for provisions may remain permanent.

Adjudication of budget reconciliation is handled at the Senate level by the Senate parliamentarian, a non-partisan referee for the upper chamber.

Johnson’s ‘One Big, Beautiful Bill’ Plan

For months, Johnson has championed “one big, beautiful bill”—as Trump has called it—as the correct approach to the president’s agenda.

Under this plan, all major policy priorities—border security and immigration, defense, energy, and taxes—are wrapped into a single massive reconciliation package.

Johnson and the House GOP have good reason to prefer this approach: Currently, Republicans control just 218 seats in the lower chamber to Democrats’ 215. That means that Johnson can spare only a single GOP defection—an extremely difficult task for any speaker.

House Republicans’ budget blueprint would raise the debt ceiling by $4 trillion, calls for $4.5 trillion in tax cuts offset by at least $1.5 trillion in spending cuts, and includes instructions for most House committees to implement measures that would reduce the deficit by $1.5 trillion over a decade.

On Feb. 25, Republicans passed the broad outlines of this proposal in a 217–215 vote that included only a single defection, by Rep. Thomas Massie (R-Ky.). Massie tied his opposition to the impact the legislation would have on the federal deficit.

However, the difficulty of passing even this preliminary resolution foreshadows challenges ahead, as the final package will likely need the assent of all but one or two Republicans, depending on whether currently vacant Republican seats are filled by the time of final House passage.

The Senate’s 2-Part Plan

The Senate is pursuing an alternative that instructs relevant committees in the upper chamber to draft measures related to border security, increased military spending, and energy, while pushing taxes off for later.

The legislation would allocate $175 billion for border security, $150 billion toward defense, and cut the deficit by $4 trillion over a decade, making the package deficit neutral—and thus, permanent under reconciliation rules.

Under the Senate’s plan—which Thune has said is intended to provide Trump with “optionality”—the more difficult tax issue would be punted to later.

Thune and Senate Budget Committee Chairman Lindsey Graham (R-S.C.), who are leading the Senate approach, have expressed a preference for the House version.

However, they have also expressed doubts about the possibility of passing such a package given the tight margin in the House.

In the Senate, Republicans are pursuing a tax approach that would make the changes cost-free—making them eligible to be made permanent under reconciliation.

What Does Trump Say?

Trump has made his preference for Johnson’s approach clear.

“The House and Senate are doing a SPECTACULAR job of working together as one unified, and unbeatable, TEAM, however, unlike the Lindsey Graham version of the very important Legislation currently being discussed, the House Resolution implements my FULL America First Agenda, EVERYTHING, not just parts of it!” he posted on Truth Social on Feb. 19.

“We need both Chambers to pass the House Budget to ‘kickstart’ the Reconciliation process, and move all of our priorities to the concept of, ‘ONE BIG BEAUTIFUL BILL.’”

Since then, however, he has signaled openness to the Senate approach if required, emphasizing that he’s most concerned with getting the job done.

What’s Next?

Both chambers must pass an identical budget resolution in order to move forward with the reconciliation process.

It’s unclear whether the Senate will move to take up the House-passed resolution, and Thune has yet to give any indication of the upper chamber’s plans.

“I applaud Speaker Johnson and House Republicans for moving our team one step closer to advancing the president’s agenda,” he said after the House’s passage of the budget resolution on Feb. 25.

Thune vowed to “work closely with our House colleagues to ensure the final package includes all of the president’s key tax priorities, including permanency, which will create long-term certainty for working families in America.”

With the House’s approval of the blueprint, multiple House committees will move to submit recommendations for spending and cuts under their jurisdiction to the House Budget Committee by March 27.

One provision of the blueprint instructed the House Energy and Commerce Committee to cut the deficit by $880 billion—which would nearly necessitate cuts to the popular Medicaid entitlement program. Trump has come out against Medicaid cuts, and the issue is likely to be an ongoing debate as the House works to draft the legislation.

Conservatives, on the other hand, have pushed for steep spending cuts.

At the same time, divisions on how to handle tax policy linger between the House and Senate.

Senate Republicans are adamant that all tax cuts included in the bill should be cost-free, allowing them to be made permanent under reconciliation rules.

House Ways and Means Committee Chairman Jason Smith (R-Mo.) agrees—but says the $4.5 trillion in tax cuts currently being floated wouldn’t be enough. Smith has called for deeper tax cuts, arguing that increased economic growth would ultimately offset the revenue loss from the rate cuts.

The State and Local Tax (SALT) deduction also threatens headaches for GOP leadership. Many conservatives oppose increasing the deduction outright, but for many purple-district Republicans in the House, it’s nonnegotiable.

Despite these ongoing divides, Johnson has signaled he hopes to pass a reconciliation bill by early May.