SBLC: B&T Weekly Hill Update - January 2, 2025

January 2, 2025

The 119th Congress convenes tomorrow.

Speaker Election:  The House’s first order of business will be the election of a Speaker.  Mike Johnson (R-LA) is running unopposed to continue in that position, but his leadership, most recently relating to the passage of the short-term spending bill in December, has frustrated several House Republicans. 

Any candidate for the office of Speaker must receive a majority of the votes cast by Members present and voting for some person to fill the position.  The House party ratio on the opening day of the new Congress is expected to be 219 Republicans to 215 Democrats, for a total of 434 Members.  (Recall that while Republicans won 220 seats in the last election, former Rep. Matt Gaetz (R-FL) resigned last December and said he will not return for the new Congress.)  So, if everyone shows up and votes for a candidate, the winning Republican candidate could afford to lose just one vote from a member of his own party.  

President-elect Trump endorsed Johnson for Speaker on Monday.  Despite that, Rep. Tom Massie (R-KY) says he plans to vote for someone other than Johnson.  Other Members have said that they remain undecided on who they will support.  Reportedly the Freedom Caucus has been actively searching for an alternative candidate who could secure a majority vote, and others in that far-right group are considering what concessions they might extract in exchange for voting for Johnson. 

This morning, Trump said that he will lobby Republicans to help elect Johnson if it proves necessary.  Members of Trump’s inner circle have hinted at political retribution against any Republican who does not support Johnson.  The vote will test the incoming President’s influence over the House conference.

The election of a Speaker has precedence over virtually any other business that could occur in the chamber, so there is significant pressure on Republicans to resolve this matter quickly.

House Rules Package:  The House rules package for the incoming Congress was released yesterday.  One notable change would require the vote of nine GOP members to trigger a motion to remove the Speaker.  A prior rule that allowed just one member to trigger a vote on the motion to vacate the chair led to the ouster of former-Speaker Kevin McCarthy (R) in the last Congress.  The rules package also sets up debate on a dozen bills in the beginning of the new Congress, putting them on a fast-track for passage in the House.  The list includes measures relating to participation in Title IX sports, immigration and deportation rules, abortion, voter identification requirements, fracking, and the scheduling of fentanyl-related substances under the Controlled Substances Act, as well as a bill that would alleviate double taxation on businesses operating in both the U.S. and Taiwan.

Preliminary List of Legislative Priorities for the New Congress:

Debt ceiling:  In December 2021, Congress voted to increase the debt limit – the maximum amount of money that the U.S. can borrow to meet its legal obligations – to $31.4 trillion.  The Treasury hit that limit in early 2023.  The bipartisan Fiscal Responsibility Act, passed by Congress in June 2023, suspended the debt limit through January 1, 2025.  So as of today, the Treasury Department will begin paying government obligations by drawing down on its stockpile of cash, and it also will start to deploy “extraordinary measures” to extend the duration of that cash buffer.  In the spring, Treasury will get some relief in this endeavor when it receives a big influx of cash from individual tax payments.  It is estimated that the “X-date” – the point at which Treasury is no longer able to meet its obligations – will arrive sometime mid-year.  Congress will have to increase or suspend the debt limit by that date in order to prevent default. 

President-elect Trump has pushed hard for Congress to increase the debt ceiling, or terminate the limit entirely, before he assumes office.  Republicans resisted Trump’s demand to include such provision in the government spending bill passed just before Congress recessed in December, and it is difficult to imagine any scenario where the debt ceiling will be increased before January 20th.   

Congress has two options to enact the increase. 

One way would be via a party-line vote using the budget reconciliation process.  A number of congressional Republicans would resist that approach unless it is paired with huge spending cuts.  Speaker Johnson has suggested that in exchange for increasing the debt ceiling by $1.5 trillion, he will look for $2.5 trillion in cuts to mandatory spending, which includes money for Social Security, Medicaid, and Medicare.  But Trump has ruled out any cuts to Social Security and Medicare, the two largest components of mandatory spending.  Compounding the political difficulty of this approach, any reconciliation bill would be expected to include spending on other items, potentially including things like border security and taxes, that also would require some revenue offsets. 

Alternatively, leadership could negotiate a bipartisan bill to increase the debt ceiling.  But that approach would require concessions to Democrats that could threaten the survival of the Speaker.

FY 2025 Government Funding:  Before recessing in December, Congress passed a continuing resolution to continue funding the federal government through March 14.  Congress must pass a measure by that date to continue funding the government for another temporary period or through the end of the fiscal year (September 30), or the government will shut down. 

FY 2025 Budget Resolution:  Republicans have two shots at enacting tax and spending bills via the budget reconciliation process, which allows a measure to pass the Senate by a simple majority vote, rather than the 60 vote threshold usually required in that chamber.  Republicans are divided over the best strategy for using the process to enact President-elect Trump’s legislative priorities.  Senate Majority Leader John Thune (R-SD) has advocated for a two-bill approach, which would use the FY 2025 budget resolution to pass a reconciliation package in the first months of the new administration limited to border security, defense, and energy issues, followed by enactment of a second reconciliation bill covering FY 2026 later in the year to include tax measures and spending cuts.  The House Freedom Caucus has called for a slight variation on this approach, urging that the first reconciliation bill should be limited to border measures and the second should cover tax and energy matters along with spending cuts.  Both approaches would put an early win on the board for Republicans.  The Chairman of the House Ways and Means Committee wants Congress to move a single reconciliation bill that includes all of these provisions, to provide the maximum amount of leverage to win support for the package within the confines of very narrow Republican congressional majorities.

Congressional Review Act Rule Disapproval Measures:  Congressional Republicans have promised aggressive use of a procedure authorized by the Congressional Review Act to disapprove of final rules issued by the Biden administration within a specified period of time, probably dating back to the first week of August 2024.  In the coming weeks, we will share a more detailed explanation of this procedure and rules that could be targeted.

Senate Party Ratios:  Newly elected Senator Jim Justice (R-WV) said he will delay being sworn in to the Senate until his successor to be Governor of West Virginia is sworn into that office on January 13.  Until then, party ratios in the chamber will be 52 Republicans to 47 Democrats.

Read More SBLC Alerts