The fight over the heart of Donald Trump’s sprawling legislative agenda is publicly pitting the House GOP’s top tax writer against pretty much everyone else.
House Ways and Means Chair Jason Smith, a close Trump ally who is playing a lead role in drafting potential tax cuts, is facing off against incoming Senate Majority Leader John Thune over what should take priority once Republicans take back power next year. Smith wants to take one big swing at passing conservative priorities including changes to tax, border and energy policy.
Thune, backed by incoming Budget Chair Lindsey Graham and incoming White House deputy chief of staff for policy Stephen Miller, among others, is trying to rally the party behind a two-step plan in which tax fights would be resolved at the end so they don’t hold up other items on the GOP’s wish list.
Behind the scenes, House GOP leaders like Speaker Mike Johnson have privately indicated they prefer one mammoth bill, believing it would be easier to pass if everything moved together. But, like with many issues on the Republican agenda, Johnson is willing to defer to Trump, according to a person granted anonymity to share the speaker’s thinking. Johnson is under particular pressure because his narrow House majority requires nearly all Republicans to fall in line on major legislation.
“It would make sense to do both of them together, but the tax is going to weigh it down,” said Sen. Markwayne Mullin (R-Okla.), a Trump ally who noted he had spoken with senators and Smith. “What we’ve got to do right off the bat is make sure we secure our border and become energy independent again. We’ve got to work with Chairman Smith, and we all know that.”
The dispute is poised to be one of the first clear tests of who on Capitol Hill holds the most sway over the GOP policy agenda in the Trump era, including who really has the president’s ear on big questions dividing the party. At stake for Republicans is whether they can avoid a repeat of their giant legislative failure in 2017, when GOP defectors such as the late Sen. John McCain tanked an attempt to undo Obamacare.
So far, neither side is backing down as negotiators, including Smith, try to wrangle the ideas behind the scenes.
“I have expressed my idea on tax policy, and that’s my idea,” Smith said after a closed-door House GOP conference meeting on Tuesday morning.
Thune, meanwhile, told reporters that while conversations are ongoing, “I think [the two-track] strategy makes sense.”
Johnson is in constant contact with the incoming president’s team and said he will discuss the party’s strategy with Trump over the weekend before the Army-Navy football game in Maryland. Johnson previously told reporters that the plan was to have two bills, but didn’t directly commit to that on Tuesday.
“What we’re deciding right now is the sequence of how we’re running those plays. It’s really important, the House and the Senate have different calculations on how that’s done but we all have exactly the same priorities,” Johnson told reporters.
Scalise was equally non-committal about one vs. two bills at an event with former Ways and Means Chair Kevin Brady (R-Texas) on Tuesday afternoon, saying: “We’re still working through that. … We’ve been doing this in meetings, not just in the House amongst the House members. We’re having this debate with Sen. Thune and others.”
But House GOP leaders are navigating a slim margin, including deep divisions over tax policies like the state and local deduction. The House’s tax writers are hoping that it would be easier to get their piece of the reconciliation package through their chamber if it’s tied to immigration and energy provisions, rather than something that passes separately. And Smith isn’t entirely alone in his public push: Fox Business host Larry Kudlow, who previously worked as a top economic adviser to Trump, has pushed for one large bill.
“It’s a high, high risk. It’s a Las Vegas gamble that you can get two [reconciliation] bills,” Kudlow said on his show. “Have you ever ever seen, in your lifetime, a reconciliation bill that was done in 30 days? And that means the tax cut conversation is not going to happen.”
But other corners of Johnson’s conference and Senate Republicans, including top Trump allies, are pushing for the two-track path, prioritizing the early win on immigration.
“That’s kind of where the momentum is at is for doing two parts to it,” Judiciary Chair Jim Jordan (R-Ohio) told reporters, while predicting that the party will still get something done, separately, on taxes.
Meanwhile Graham, a vocal Trump ally, publicly tied himself to Miller’s push for an early border bill, saying that the “top priority” and the “first order of business” for the Senate Budget Committee will be the border.
“The bill will be transformational, it will be paid for, and it will go first,” he added in a post on X.
Underlining the debate are fears that the tax portion of negotiations will become so complicated that tying it to the border and energy pieces could make the entire package collapse under its own weight. Kicking taxes until later in the year could also help give Johnson a tiny bit more wiggle room since he’s losing at least two members to the Trump administration at the beginning of the year. Once they’re gone, he won’t be able to lose a single vote on partisan legislation.
“You’re not going to get the tax package in the first 100 days,” said House Ways and Means committee member Kevin Hern (R-Okla.). “The practicality of the politics is, can you actually get people to keep coming back to the vote?”