Senate Budget Chairman Lindsey Graham unveiled the text of a compromise budget blueprint Wednesday that’s designed to pave the way for a major reconciliation package offering tax cuts, border security and defense funding and more.
The measure would punt, for now, on the overall size of offsetting spending cuts, but the text clearly states a preference for a minimum $2 trillion in cuts over 10 years. Given the difficulty of achieving that hefty figure, however, the document provides a huge amount of wiggle room to go lower than that and still meet the Senate’s “Byrd rule” requirements for what can go into a filibuster-proof reconciliation bill.
And the draft budget resolution would provide enough fiscal headroom in the Senate to make permanent the 2017 tax cuts that expire after this year, while offering new tax breaks sought by President Donald Trump, such as exempting tips and overtime pay from income tax. The budget appears to carve out room for more than $5.2 trillion in tax cuts overall, including a $1.5 trillion cost ceiling on new provisions that weren’t part of the 2017 law.
It also would increase the nation’s borrowing limit by as much as $5 trillion — a level designed to give the Treasury enough borrowing authority to get past the midterm elections next year.
“The Senate Plan has my Complete and Total Support,” Trump said in a statement posted on Truth Social. “Every Republican, House and Senate, must UNIFY. We need to pass it IMMEDIATELY!”
The framework would also preserve the initial Senate budget resolution’s targets of up to $150 billion in new defense spending, $175 billion for border security and immigration enforcement and another $20 billion within the Senate Commerce panel’s jurisdiction, largely for the Coast Guard.
“Today is one of the most important steps toward ensuring the Republican majority fulfills its promise to the American people that we will secure our border, strengthen our national security, make President Trump’s tax cuts permanent, and reduce spending,” Senate Budget Chairman Lindsey Graham, R-S.C., said in a statement.
Graham and other Senate Republicans met with Trump earlier on Wednesday at the White House to discuss the budget plan. Senate Republicans later met with Treasury Secretary Scott Bessent at the Capitol.
The Senate budget plan is a revised version that melds elements of that chamber’s earlier blueprint with the House’s resolution. Both chambers adopted their initial versions in late February.
The Senate’s first version was a two-track plan that would have prioritized border and defense spending first, leaving taxes and the debt limit for later in the year. House Republicans rejected that approach in favor of their “big, beautiful” all-in-one proposal, which won out in the end — with the tweaks Senate Republicans offered Wednesday.
The Senate will consider the revisions as an amendment to the House-adopted blueprint.
‘Baby step’
Senate Majority Leader John Thune is expected to offer a motion to proceed to the revised budget on Thursday, which needs a simple majority for adoption. Then up to 50 hours of debate would ensue, though it’s likely Republicans will yield back some or all of their allotted 25 hours.
Then the infamous amendment “vote-a-rama” would begin sometime Friday night or Saturday, wrapping up only when senators run out of amendments to offer.
Sen. John Kennedy, R-La., who was part of the group meeting with Trump on Wednesday, said he expects the budget resolution to be adopted in the Senate sometime this weekend.
“It’s a meaningful step, but it’s a baby step, folks. It’s just a blueprint,” Kennedy said. “The real work starts after we do this.”
If all goes according to plan and the measure is adopted in the Senate — again only a simple majority is necessary — the House would take it up next week before leaving for the two-week April recess.
If adopted in that chamber as well, House and Senate committees would have a May 9 deadline to produce their pieces of the reconciliation package — May 16 for the Finance panel’s debt limit increase. The staggered dates preserve the option to spin off the debt limit piece as a separate bill, though there’s no indication that’s the plan at this stage.
The deadlines aren’t binding, but these dates track with Speaker Mike Johnson’s ambitious goal of getting a final package to Trump’s desk by Memorial Day.
But House and Senate Republicans remain at odds over how deeply to cut federal spending and the compromise resolution is designed to paper over that dispute until Congress takes up the detailed reconciliation bill later this year.
The resolution text keeps the earlier House budget plan’s “instructions” to that chamber’s committees to find at least $1.5 trillion in savings over 10 years, and the size of a $4.5 trillion tax package would need to be scaled back if savings don’t total at least $2 trillion.
Senate committees, however, would theoretically have a much easier task. They would need to find only $5 billion in savings over 10 years to meet the minimum requirement set in the budget — $1 billion each in five committees: Agriculture; Banking; Energy and Natural Resources; Environment and Public Works; and Health, Education, Labor and Pensions.
The revised budget plan states the chamber’s intent to cut at least $2 trillion, however, which is also the House’s target. In the end, both chambers have to be aligned on the final reconciliation bill that goes to Trump’s desk.
Unlike the House budget adopted in February, Senate Republicans want to make the 2017 tax cuts permanent — which could cost about $3.7 trillion under traditional scoring rules. But to avoid that cost, Graham said that as Budget chairman, he would use a “current-policy baseline” that considers extensions of tax cuts to be cost-free because they simply maintain current policy.
“I have determined that current policy will be the budget baseline regarding taxation,” Graham said. “This will allow the tax cuts to be permanent — which will tremendously boost the economy.”
Democrats took aim at the maneuver for papering over the impact on U.S. debt while helping the rich at the expense of those less well off. Independent analyses have found the biggest dollar benefits of the tax cuts will go to the top-earning households, while cutting programs like Medicaid and food stamps will hurt those lower down the income scale.
“No amount of gaslighting from Republicans about the true cost of their tax plan, now upward of $5 trillion, can hide the fact that they want to pay for handouts to billionaires and corporations by kicking millions of Americans off their health insurance, driving up child hunger and wiping out hundreds of thousands of jobs,” Senate Finance ranking member Ron Wyden, D-Ore., said in a statement.
‘Heavy lift’
But some House Republicans have criticized such a scoring method as a “budget gimmick” and have said they would like to offset the cost of tax cuts with spending cuts.
While some House conservatives have been critical of the Senate’s intention to set a much lower floor for spending cuts, the $1.5 trillion tax cut instruction paired with the use of a current-policy baseline gave some House tax writers pause.
Rep. Greg Steube, R-Fla., leaving a Ways and Means GOP meeting on reconciliation Wednesday, said the Senate tax instruction was a “heavy lift” in the House, likely to anger conservatives.
“You’re gonna have to do some significant offsets there, because I’m not voting for a bill to spend $5.3 trillion on debt,” Steube said. “You’ve got to offset that. You add another trillion dollars, that makes it difficult.”
Ways and Means Republicans have been meeting regularly to tailor the tax portion of the bill to the $4 trillion to $4.5 trillion allowed under the House-adopted version of the budget resolution.
Rep. Darin LaHood, R-Ill., echoed Steube’s criticism.
“To me, that does not seem like good policy on how we should address our debt and deficit,” he said. “All we’re focused on is us doing work that we need to do.”
The Senate’s tax instruction didn’t come up at the meeting, where much of the focus has been on finding revenue raisers to offset some of the cost of extending the 2017 tax provisions, as well as finding space for a slew of campaign tax cut pledges, such as exempting tips and overtime from income tax, lawmakers said.
Rep. Mike Kelly, R-Pa., said it was difficult to predict how the Senate’s modified budget resolution and tax instruction would fare in the House, given Republicans’ thin margin.
“I can’t tell you anything about the House, I gotta be honest with you,” Kelly said, noting that 13 Republicans voted against the 2017 tax law. “That was then, but we don’t have those margins now.”
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