The Republican Congress has quickly remade fiscal policy, with substantially more success than in Trump’s first term. How did they achieve so much more without compromise? How much will their routes around the filibuster matter for the decline of congressional appropriations? And are we setting up for a huge new step in presidential spending power: pocket rescissions? Molly Reynolds of the Brookings Institution is the expert on how Congress bends the rules of the filibuster to make use of partisan majorities. We discuss how much Congress is ceding power to the President and making tax and spending decisions even more partisan.
Guest: Molly Reynolds, the Brookings Institution
Transcript
Matt Grossmann: Reconciliation and rescission this week on The Science of Politics. For the Niskanen Center, I’m Matt Grossman. The Republican Congress has quickly remade fiscal policy with substantially more success than in Trump’s first term. How did Republicans achieve so much of their tax and spending agenda without compromise? How much will their routes around the filibuster matter for the decline of traditional congressional appropriations? And are we setting up for a huge new step in presidential spending power, pocket rescissions to codify the DOGE cuts?
This week, I talked to Molly Reynolds of the Brookings Institution. She is the expert on how Congress bends the rules of the filibuster to make use of partisan majorities. We discuss how much Congress is ceding power to the President and making tax and spending decisions even more partisan. It’s a story that combines the transformation of the Republicans with the longer continuity of slow change in an era of polarization and narrow majorities. We get into the weeds of the sausage-making process, but you need to do that to understand how majorities are leveraging their tools to take new power and reconstruct the state. I think you’ll enjoy our conversation.
So, Congress just passed a major reconciliation bill. Give us the lay of the land by congressional standards, at least in the most recent years. What was normal and what was abnormal here?
Molly Reynolds: So, on the normal side, we have reached a point where when one party has unified control of the House, the Senate, and the White House, the strong norm is for that party to attempt a reconciliation bill, at least one. Democrats did two when they had unified party control under President Biden. Republicans tried to, in the first Trump administration. One of them succeeded, one of them failed. So, we’ve definitely reached a point where reconciliation is seen as this one neat trick when a party has a unified control to get as much of their agenda that’s compliant with the rules of the process. We can talk more about what that means and what the consequences of that are. Get as much of it done in one of these big bills as possible. Beauty in this case, I think is in the eye of the beholder.
So, in that sense, what we saw is certainly a norm for contemporary congressional politics under a unified party control. Some things that were less normal about this, one I would say is the degree to which the development of the bill involved a lot of can kicking, for lack of a better way to put it. At various points, Republican strategy seemed to just be we’re going to put off the harder choices for later. And then, when later arrived, it was a real high wire act to try and figure out whether they were going to get the votes for what they wanted. And ultimately, they did, though I think that again, as we’re thinking about how congressional negotiations unfolds, I think there’s an alternate universe where they didn’t get what they wanted and just asking these questions about how do you… Structuring negotiations around just building momentum to the next stage of the process.
And then, the other thing, and we can certainly talk about this, is that in the Senate, there were some things that they did to make this happen, particularly involving the permanency of the tax cuts that do really represent significant departures from how Congress has operated for a long time in terms of deferring to the advice of the Senate’s parliamentarian on her interpretation of the rules of the game. And I think there are potentially large consequences of that coming in the future that we simply don’t know about yet.
Matt Grossmann: So, as you mentioned, the last unified Republican government failed to pass the Obamacare repeal, its first major effort, and then, succeeded in a tax cut that has almost all been extended by the recent bill. But the comparison seems like a lot of more legislative success this time than last time. Not only did they repeat everything that they got last time, but they didn’t have a high profile failure beforehand and they got a lot of additional things in this bill that were on their agenda. So, what’s changed from the first Trump presidency to the second that allowed this to happen?
Molly Reynolds: Yeah, I think I’ll say two things. One about the politics and one about the structure of the bill itself. So, on the politics, I think when Republicans found themselves under unified party control at the beginning of 2017, they were a little bit surprised that that’s where they were. I think many people, including many congressional Republicans, did not expect Donald Trump to win the 2016 election. And so, I think when they needed to hit the ground running, they were less prepared, had less of an idea of where they wanted to go legislatively.
I also think that that Republican Party in 2017 was less fully captured by President Trump. And we can talk about exactly what Trump’s influence was over this bill. But the short version is once it was clear that President Trump wanted this, then that, I think, was a driving force to get Republicans to unify, not necessarily around specific provisions, because I think by and large, there are a couple things in here that President Trump cares about, but lots of other things that are not particularly of high importance to him personally, but the idea that they were to be driven to agreement by the president asking them to do so. I think that carried more weight this time than it did in 2017.
The other thing that I’ll say about the bill itself is if you think about the 2017 experience, you had two different major Republican priorities that they decided to do separately. They decided to try and repeal the ACA, and then, they did a large tax bill. Here, again, as typified by the title, One Big Beautiful Bill, they decided to put everything into one package. And I think that had real consequences for how they got to yes, and how they built the coalition within the party to have enough votes to pass it. And I’m thinking here of things like… Think about the Republican House members who cared a lot about the SALT deduction, the deductibility of state and local taxes. Once it was clear that that was the thing, the hill that that group of members was going to die on, it was clear that that’s how you had to play for their votes. And even though they may have been unhappy about other things in the bill, that was the log that you had to roll to get them onboard.
And when you have basically everything as opposed to dividing different pieces of this into different packages, again, it could have fallen apart on them. But ultimately, I think that’s part of why they were successful because they had put everything together, convinced everyone that this bill was too big to fail, and then, were maneuvering within that basically entire universe to get what they wanted done.
Matt Grossmann: So, I characterize this as a pretty full win for the Republican congressional agenda. It has been not only the extension of the tax cuts, but almost all of the major campaign promises that Trump made on taxes made it in here. Obviously, the big changes to Medicaid and food stamps near Republican priorities. And the immigration provisions could even be seen as a separate Republican priority, which was nearly fully achieved here. So, on the one hand, we have quite a bit that made it into this one bill and didn’t seem to require wholesale revision along the way, I guess, except for the supposed social security provision that Trump wanted.
But on the other hand, they did make some deals, certainly at the end with Lisa Murkowski and the Senate and as you mentioned with the members who wanted the state and local tax deductibility. They didn’t have to make a ton of last-minute deals with the far right part of the Republican Party. So, what do we make of how much was achieved? How much is it true that what I said, that they achieved most of what they wanted without major compromises? And what can we learn from where they did have to compromise and who they had to compromise with?
Molly Reynolds: Yeah, so I think I would agree that they got most of what they wanted. In terms of thinking about where the deals were cut, I’ll, I think, make three observations. So, one is to go back to what I was saying before about these House Republicans from blue states. And so, again, those folks, it became very clear very early on that state and local tax deductibility was the thing that they cared most about. In an alternative universe, you could have imagined that those Republicans would have been really animated by the Medicaid cuts because they come from states that have expanded Medicaid and where there are lots of people who rely on Medicaid and they could have been convinced that that was the thing that they were going to get really animated about. But once they staked out their position, it was clear that that was where the negotiation with that group of people was going to have to happen.
In terms of the far right, we saw at some points along the way, those folks, particularly in the House, the Freedom Caucus and Freedom Caucus-aligned members get worked up about different things. There was that moment in, I think, May, when the House budget committee was supposed to do its extremely pro forma exercise of gathering together… Excuse me. All of the individual submissions from the individual committees and report it out to the floor. And that got held up by Chip Roy and a couple other members. So, they put up some fights along the way. But I think at the end of the day, as I think is the case with a lot of where the Freedom Caucus is now, it was mostly about performatively fighting, mostly about being seen as kicking and screaming on their way to the outcome as opposed to actually jeopardizing the ultimate outcome. And I think a lot of… Particularly under a unified party control, what motivates and animates that group of especially House Republicans is this desire to be seen as begrudgingly going along with leadership as opposed to actually wanting to undermine the path to a final outcome.
And then, the last thing I’ll say about how did this all get to yes, in the Senate, which was itself its own high wire act. Much of that story, I think does involve Senator Murkowski and things that she negotiated into the bill that are specifically targeted towards Alaska. And I think it’s an underappreciated fact, at least to me in American politics, that there are things about Alaska, they’re just wildly different than everywhere else in the country. And some of that helps explain why Lisa Murkowski has continued to be successful in a Republican Party that on a number of other issues has gone to her right.
But it also in this case, meant that if you could find the things that would get Murkowski’s vote and clear the parliamentarian, they were pretty unlikely to annoy other members. You weren’t going to lose other people’s votes by offering Murkowski things about Alaska, the captains of Alaskan whaling vessels or fishing vessels or whatever it is that was ultimately the middle-of-the-night-negotiated provision. And so, as a broader point, I think this also tells us something about congressional negotiation, which is that if your holdout wants things that aren’t going to bother anyone else, it’s actually going to be way easier to get to yes because you’re not going to lose votes by giving them the things that they want.
Matt Grossmann: So, super long-term listeners to the podcast will remember your first appearance for your book, Exceptions to the Rule, and we did have a new or seemingly new big exception this time, a workaround to have the majority party budget committee set the baseline to allow them to not have to account for the extension of the first Trump tax cuts. So, how much should this be considered a major milestone? How big will this turn out to be?
Molly Reynolds: Yeah, I actually think so the policy consequences of this bill are big and real, and we will be finding out what they are. We know what some of them are likely to be. We’ll be finding out what more of them are in the coming months and years. But I think in terms of the way the Senate works, what Republicans did in terms of setting a new baseline for judging the compliance of the bill with budget rules. I think does have the potential to have huge consequences in the future, both on a policy basis and frankly in terms of the precedent it sets for the role of the parliamentarian. So just to sort of explain this a little bit. So under the Byrd Rule, which governs what can and can’t be done in the Senate via reconciliation, one of the Byrd Rule’s requirements says that when you have a section of the bill, it has to meet the instructions that were given to the committee whose jurisdiction that section’s provisions are in. So in this case, the finance committee was given an instruction, was said you can’t increase the deficit by more than, I don’t remember what the original number was, but by some large number of dollars. And then if that section of the bill doesn’t comply with that instruction, that’s a violation of the Byrd Rule.
Another provision in the Byrd Rule says that a reconciliation bill can’t increase the deficit outside the ten-year window covered by the bill. When Republicans decided, and particularly some Senate Republicans, they were sort of really driving this from the start, that it was really important to them to make the extension of the 2017 tax cuts permanent, they really quickly confronted the fact that they weren’t going to be able to do that on sort of a straightforward basis. That would have looked like the way reconciliation bills have been dealt with in the past, which is to say that they’ve been judged on a current law basis. So the cost of the bill has been accounted for based on what current law says. So in this case, that meant that the 2017 tax cuts would expire, so it would be really costly to extend them on a permanent basis.
So because it was really important to them to make the tax cuts permanent, they used a different section of the budget act to give the chairman of the budget committee the power to say, “No, we’re actually going to use a different baseline. We’re going to use a different benchmark against which we’re going to judge the cost of the bill.” And then when, as reporting suggests, when Democrats believed that the Senate parliamentarian would say that this was not permissible under the text of the Byrd Rule and the Senate’s precedents, Republicans simply refused to litigate this question in front of the parliamentarian. So they sort of said, “We’re not going to ask.” So she can’t say no. And if she doesn’t say no, then when we sort of go through the steps on the floor to be able to do this, we can say we didn’t ignore the parliamentarian, but really it’s because they didn’t ask the parliamentarian in the first place. And so this is all sort of weedsy, but it has, I think, two big consequences.
One is substantively, in the future, if Democrats have unified party control and want to do something that is, in actual terms, quite costly and under the previous understanding of the reconciliation rules would have not been allowed because of the way the cost was calculated, they can now say, look, Republicans did this with the tax cuts so we can do it with some big expansion of healthcare programs or something that’s important to Democrats. So it gives Democrats, in a future world, a big precedent to stand on for that reason. The other thing is that we are… This is another sort of, I think, chipping away at the norm of strong deference to the parliamentarian. So the parliamentarian has existed as a nonpartisan arbiter of the Senate’s rules and precedents for much of the Senate’s contemporary history, in large part because everyone in the Senate sees value in sustaining a norm of having someone that they all listen to.
And like other in the Senate, when we’ve seen them eroded, it’s because there’s some priority that a party has and they think that departing from a norm is worth it to get the thing that they want. So that’s sort of the story of the history of change in the filibuster and it’s increasingly the story of change in sort of eroding the authority of the parliamentarian. So we saw it in this case, we saw it earlier this year with a case involving the Congressional Review Act, and Republicans sort of contorting themselves into knots to go around the parliamentarian without actually having to say we overruled or we ignored the parliamentarian. And so I think as part of our story about the Senate as a norms-based institution with kind of a strong non-partisan arbiter of its rules, this also represents sort of an erosion of that norm as well.
Matt Grossmann: So they went around the parliamentarian in this big way, but they still presented a whole bunch of things to the parliamentarian, she made decisive calls in lots of ways, why defer here and not there? And is it just because workarounds are surprisingly easy to find? That is, did they really lose that much from the Byrd Bath or did they just have to rewrite provisions and maybe even use it as a vehicle for stopping some of the house provisions that they didn’t like?
Molly Reynolds: It’s sort of a mix. A lot of the stuff that initially went to the parliamentarian and she initially advised was not compliant with the Byrd Rule. They were able to rework and kind of cure the problematic provisions. There are other things that did get either taken out entirely or watered down pretty significantly, particularly things, kind of the edges of the bill. So things like there’s a provision about firearms regulation. There was a whole thing about preempting state and local regulation of AI that got slowly watered down and then eventually removed entirely. There’s a watered down version of a school voucher provision that got watered down a lot to pass muster with the parliamentarian. There was a ban on gender affirming care under Medicaid and the children’s health insurance program which got removed. So those are just some of the kinds of things that did either get significantly watered down or ultimately removed.
In terms of your question about why listen to the parliamentarian on this stuff and not on the question of the ultimate score of the bill. One of the reasons that the parliamentarian, again, has persisted as this institution is because the existence of a non-partisan arbiter of these questions really serves senators political interests, and it is often quite helpful to a majority party to have someone who says no to things that they maybe don’t have the votes for in the first place. And so having the parliamentarian to blame for things that might’ve been unpopular or that they might not have wanted to do anyway solves sort of collective action problems in a very useful way. So I think that to me, that’s the story of why I listen to her on some of this stuff and not on the other stuff.
The other thing I’ll say about the Byrd Rule, and even the things that didn’t ultimately have to be removed but did have to get reworked, is that that process of iterating over the language with the parliamentarian, particularly when it’s done at the last minute, can have big, unintended consequences for the actual design of the policy that we will only learn at some point in the future. So my favorite example of this comes actually from the 2017 tax bill where one of the things that they worked into that tax bill was a repeal of the ACA’s individual mandate, so the requirement that everyone has to purchase health insurance. Except when they did that, the parliamentarian had said, you cannot just remove the provision entirely that says that individuals have to carry health insurance. What you can do is set the penalty to zero. So the law is still technically on the books, but there’s no penalty if you don’t have health insurance.
And for people who care about elegant and efficient policy design, that’s a really kludgy solution to getting to a certain outcome. And I feel quite confident that in the coming weeks and months, we’re going to find things like that in some of these provisions that were reworked to pass muster with the parliamentarian. They might ultimately produce the big policy outcome that Republicans wanted, but they’re going to get there in ways that are inefficient and might create other things that weren’t getting talked about when they were written, particularly the ones that were sort of reworked in the very late stages of the game.
Matt Grossmann: So Trump said he would be surprised if they finished by July 4th, that many members of the house said that there was no way they were accepting the Senate bill provisions. Murkowski in making the deal said that she still expected the deals to be revised when it went back to the house. So why did the House swallow the Senate changes whole? And does that suggest there was things going on beneath the scenes that the house really was involved in what was going on in the Senate or was this just caving in the face of this arbitrary deadline?
Molly Reynolds: So I’ll say two things. One is that the nature of getting to yes in the Senate I think demonstrated to the house that what the Senate had done was basically what the Senate was going to be able to do. That if the House had held out for other things and tried to make more changes, that it’s not clear that those would’ve been able to get to the Senate and you would’ve just sort of found yourself right back where you started. The other thing I’d say is that there’s a lot of stuff in this bill that’s potentially quite politically unpopular, particularly the Medicaid cuts, particularly the cuts to nutrition assistance, especially when paired with the distributional effects that really benefit wealthy people at the expense of poor people. And I think there was a sense from everyone on the Republican side of the aisle that the longer it sat out there as a thing, that either Democrats would explicitly attack or people would learn more about the chances that everything would fall apart because someone would get cold feet would only go up.
And so I think at that point, everyone, I think, just sort of realized if we’re going to do this, we should just do it now. This is not a great way to legislate, I just want to be clear, but that is a reality of the contemporary Congress, and particularly in this situation, a bill that has… Because there was so much in it, having it out there longer would have just given people more time to learn about things that they didn’t like and make the whole thing more difficult. And then to the extent that there was an actual deadline that wasn’t July 4th, it was probably the August recess because Republicans had decided that this was going to be the mechanism by which they were going to raise the debt limit. And I think if they had left for the August recess without raising the debt limit, the folks who would be made nervous by that would be quite nervous about that.
And so if the deadline was going to be the August recess, why have it sit out there for several more weeks and give more people the opportunity to get antsy about whether it was a good idea?
Matt Grossmann: So you mentioned that President Trump has more control over the Republican party this time than last time, and certainly it did seem that he played a role in both the Senate and the House in getting the hardliners on board with the final product and in setting and meeting this deadline. On the other hand, the bill looks a lot like former Republican priorities. It doesn’t look like a change to reflect Trump’s coalition. It does include some Trump priorities, but maybe not any more than other Republican presidents have affected their congressional majorities. And of course, he really wasn’t that involved in the details, sometimes forgetting what was in the bill or insisting that things that were taken out of the bill were still in there. So what can we say about how much Trump mattered here and why we had this difference between he mattered in bringing on the coalition but didn’t necessarily change the structure of the priorities?
Molly Reynolds: Yeah, it’s a great question, and I’m not sure I have a great answer, but I do think that, I think in general, particularly in kind of our current partisan environment, the existence of unified party control can be quite clarifying for a party and the sort of notion that you have possibly one real shot at one big thing, given the realities of the electoral calendar and alternating majorities and all those sorts of dynamics that are familiar to listeners.
So I think given kind of that reality, once it was clear that they were going to do this, Trump’s power here was really in just sort of continuing to try and force them to the finish line and not really in these questions about what was actually in the bill. Because you’re absolutely right, even in a relatively late stage of the game, he was quoted as saying things like, “Cutting Medicaid loses you elections.” And the response which is like this bill makes historic cuts to Medicaid. So if you really believed that, President Trump, or really sort of wanted to project that opinion onto your conference, this is not the bill that you would have produced. So I think his sort of role here was much more as political leader of the party than over any in terms of negotiating any specific parts of the package.
I do also think that some of those tax provisions we talked a little bit about around taxes on tips and taxes on car loan interest and that sort of thing and whatever they were able to work in that’s kind of adjacent to taxes on Social Security, that was not specifically that because one of the biggest firewalls of the Byrd Rule is a prohibition on touching Social Security in a reconciliation bill. I think those sorts of things ended up in the bill because Trump had talked about them.
I think that the truly massive increase in the Department of Homeland security budget that is in this bill also very in line with Trump’s priorities. But I think at the end of the day, this was really a creature of the Republican Congressional Conferences and reflects where they are politically and policy-wise, and some of that is in agreement with, or much of that is an agreement with President Trump. Some of it is at odds, as you pointed out, with the actual material interests of his coalition.
Matt Grossmann: So when Mike Johnson emerged to power after lots of struggles over who would be the speaker, there was a real sense that this was a thankless position, that there were intractable problems in the Republican caucus that were not really about the leadership.
On the other hand, we have now seen Johnson win two very large battles. First of all, he got the Senate to accept the continuing resolution that was essentially a House message bill form of that in the spring. And now he got his conference, as you say, to go along with just punting forward in the first place and then swallowing the Senate bill. That seems like a lot of power for a speaker, especially one over the caucus that has long looked like the Republican caucus. So did we sort of misstate the problems before or is there something else about what’s gone on now?
Molly Reynolds: So I’d say two things. One is that on the reconciliation bill, from a policy perspective, the members within the House Republican Conference who were most likely to be upset with the policy content are the ones on the more moderate wing of the party and not the ones on the more extreme wing of the party. And those folks, again, sort of typified by the SALT Caucus, but there are others too, those folks have historically not been the ones who want to buck leadership. They have always been interested in trying to figure out how to get to yes, even as they are trying to protect the interests of their constituents.
On the other end, you have the Freedom Caucus and sort of the Freedom Caucus adjacent allies. And I think under a unified party control, what those folks are interested in is, again, sort of seeming like they are putting up a fight, seeming like they are going kicking and screaming, seeming like they are sort of rebelling against the uniparty or whatever, however you want to describe it. But that that, in a lot of ways, is the point, sort of seeming like you’re having the fight is the point and not necessarily having the fight in pursuit of tanking the whole legislative effort.
So if you kind of, I think, I don’t know how much of this is Johnson figured this out and how much of this is just what the actors were doing and he was at the top, is if you let the folks who want to be seen as fighting have their day, or in this case their night, since they forced the vote on the rule to be held open for most of the night, if you let them sort of have their day in the sun, in a lot of ways that’s their objective and that’s their goal and that’s what they want to be seen as doing. And then if you figure out how much can you give on a policy basis to the sort of less rebellious members of your conference. And then that’s sort of how you build a winning coalition in the House.
And I don’t know if Johnson is better at this than McCarthy was. I don’t know if he doesn’t have the trust problems at the conference that McCarthy did. I tend to think a lot of it actually is just about the clarifying nature of unified party control and the notion that you can’t actually do things when you’re trying reconciliation under unified government. So that I think can really force people to agreement in a way that other constellations of party control and other kinds of legislative vehicles don’t necessarily.
Matt Grossmann: So while this has been happening in Congress, we have had a lot of action in the executive branch to cut grants, cut workforce, reduce spending, a lot of pushing or stepping well over the usual lines in executive control of the appropriations process. There was a thought that that would make members of Congress mad. It certainly has provoked some complaints. But I guess there was an alternative view that the administration was sort of taking the heat for cuts or proving that they wouldn’t be that damaging.
But was this just a separate process here or was this impacted by what was going on in the executive branch? And why wasn’t it the case that sort of taking control of appropriations previously made was not a step to prevent a Congressional action here?
Molly Reynolds: Yeah, it’s a good question and it does, I think, feel like the sort of reconciliation bill was generated and negotiated in a different universe than the ongoing debate over what’s happening in executive agencies at the hands of the White House, in contravention of previously enacted Congressional spending decisions.
You sort of saw that the two things touch a little bit. There were some provisions in the House’s version that I believe mostly came out of the Senate’s version, for some combination of Byrd Rule and politics reasons, about sort of changes to things related to the civil service. So you could see where some of the folks in Congress who agree with Trump’s interest in making cuts to the civil service, trying to politicize a lot of what had been previously unpolitical jobs, that sort of thing. So you saw them touch there.
But I think by and large, Republicans in Congress saw reconciliation as the way that they were going to get as much of what they could done that actually and absolutely requires Congressional action. Whereas what we’re seeing with the executive branch and the DOGE cuts and various other things is them kind of testing the bounds of what they can do to achieve their policy goals without the cooperation of Congress. And it turns out, at least on the Republican side, also without a whole lot of pushback from Congress so far.
Matt Grossmann: So we do have a built-in other exception to the rule, which is that the president can send rescission bills to Congress. So far there’s been one, not small for the amount or the impact, but small compared to the actual cuts being made in the executive branch, rescission bill moved forward. It’s already run into some trouble in the Senate, although it’s passed the House. The Democrats are threatening that this will upend negotiations over the appropriations process more generally.
But there’s also just the disjuncture between all that’s happening in the executive branch, that compared to a small rescission request so far that has generated quite a bit of pushback. What do you make of that? Is this just another, we shouldn’t believe them when they say they’re really mad about the other things? Or does this show that these are going to run into difficult troubles once people see the consequences?
Molly Reynolds: Yeah, it is interesting. So in today’s Congress, the way that we generally complete the appropriations process is in these big omnibus spending bills that contain, or in this case they’re currently operating under a continuing resolution that was passed in March, but single votes that contain all of the funding for discretionary federal operations in whatever form that takes. So you talk about too big to fail. You put all the stuff in one big bill and then you say, “Okay, no one wants to shut down the government. Or maybe some people want to shut down the government, but enough people don’t want to shut down the government that we’re going to get enough votes for this and we’re going to do it by just making the stakes of having this fail be too high.”
Rescissions, which are, in this form, legislation that would cancel specific items that were in one of those big spending packages, is sort of the opposite. It’s actually asking members to go on record as saying, “No, I specifically don’t like X, Y, or Z.” And the rescissions package that they’ve proposed has a couple things in it that it turns out when asked specifically, “Do you want to vote no on this thing?” Lots of Republicans are a little bit nervous about.
Matt Grossmann: So the OMB director, Russ Vought, has threatened to use a more severe version of the rescissions request process by making that request within the 45-day window of the end of fiscal year, which we don’t know exactly what would be the result of that, but there apparently are at least a few precedents where they wouldn’t actually have to spend the money. This seems to be a pretty huge hole in the appropriations power of Congress if the president can just make the cuts and then not make the request for the cuts until 45 days before the end of the fiscal year and then go forward with the cuts regardless of what Congress does. How likely is this? And how big of a hole would this make in the appropriations process?
Molly Reynolds: Yeah, so we’re talking about what we’ve come to call pocket rescissions, sort of analogous to a pocket veto. So here, the idea is that if the president proposes a rescission that has the effect of pausing those funds from going out the door while Congress hypothetically deals with the rescission request, but if the president proposes that rescission close to when the funds in question would no longer be available, which for many things is the end of the fiscal year, so September 30th, the effect of proposing the rescission late in the fiscal year-
The effect of proposing the rescission late in the fiscal year is that then the clock would run out on the money itself before Congress would have to act to say yes or no to the rescission. And that would’ve the effect of canceling the funds without the possibility of Congress being able to say no. The Government Accountability Office in 2018 when the first Trump administration contemplated something in this neighborhood advised that it was a violation of, among other things, the Congressional Budget and Empowerment Control Act. But we know current OMB director, Russ Vought, has been playing hardball, seems in some ways an understatement, has been very aggressive in trying to use, create new polls to try and allow the executive branch to pause and or cancel funds that Congress has appropriated. And so I think it would not surprise me at all if they try this. It would not surprise me at all if they try it in a more expansive way than they contemplated in 2018.
And it would then, like so many other of these issues, end up in the courts where there are lots of questions that we could talk about for another whole podcast about the challenges of using the courts to adjudicate disputes over congressional spending. There’s a whole host of reasons why that is difficult and we’ve seen some of that play out already. But as I think leader Schumer pointed out, and Patty Murray, who’s the Democratic ranking member on the Senate Appropriations Committee has been making this point for a while, is that if pocket rescissions exist as a way for the executive branch to cancel funds that Congress has appropriated, how do you get members of Congress to make deals on spending bills in the first place if they have no belief that the executive branch is going to actually implement the deal as negotiated by Congress? I think that the… Are Democrats making this point? I suspect that public messaging aside, there are also Republicans who are probably pretty nervous about this. In general, I think we have seen the power of the appropriators be somewhat diminished in the early period of the second Trump administration.
We’ve long talked about the idea that there are three parties in Congress, the Democrats, the Republicans, and the appropriators, the notion that the appropriators have an independent base of power in the chamber. And we, at least on the Republican side of the aisle, have not seen that exercised in a really broad way. We’ve seen it exercised in a targeted way so far. But I suspect that some of them are also nervous about the idea that we would necessarily spend, or members would spend a lot of time negotiating a deal that just gets immediately picked apart by the executive branch after Congress has worked so hard to put it together.
Matt Grossmann: As you say, there’s at least some signs of frustration. I think some of the Republican senators even voted for a provision that wasn’t going to go into effect to defund OMB recently, so some sign of distrust. But of course Democrats have been mad about this for a while. They tried to make it the centerpiece of the negotiations over the continuing resolution in the spring and that failed. In some sense, it appears that the administration is just testing the line and just finding no resistance here. If we’re not going to find any real congressional pushback where it matters after the DOGE cuts, after including entitlement cuts in the reconciliation bill, in these rescission requests, it doesn’t seem like there is a line. And even if we assume that Democrats win back the house, maybe they’ll threaten to shut down the government because they might have a rescission request in the middle or at the end. But I’m failing to see the mechanism that would actually stop this if it succeeds at the end of this fiscal year.
Molly Reynolds: And I think particularly for folks who care about the health of the appropriations process, that’s a real concern in part because one possibility is if all of this, the existence of the DOGE cuts and the specter of pocket rescissions and the cuts that were on the mandatory side, and the fact that a lot of the new spending that was in the reconciliation bill is actually spending that historically would have been discretionary spending and they dressed it up as mandatory spending to be able to do it and… All of this, one possibility is that we end up just with another continuing resolution, either certainly a short-term one to take us past October 1st, but maybe one for another full year. And at some point I think that honestly the defense hawks will start to get nervous about that. And the question of, for how long could we just operate on continuing resolutions, I think is a real one. And so the short answer is that I don’t know.
I think for Republicans there are also big questions about, are there places where you want to try and put your stamp on things where a deal that you negotiate with Democrats that has some of those wins in it is worth it to you? I don’t know. But in a world where… I’ll just say one more thing about, another reason why this is all so troubling, in addition to these questions about why is Congress sacrificing its own power, why is it not pushing back against the executive branch in relation to one of its core constitutional authorities? Is that it’s also the case that the appropriations process, particularly these big omnibus bills have come to also serve as a way to get lots of other things done in Congress. When Congress does an appropriations omnibus, it often carries with it a bunch of other stuff that’s not spending legislation, and it’s seen as like the train that you can attach other cars to.
And if you start to erode the appropriations process, it’s not just that it has bad consequences for making good choices about how we spend our federal tax dollars, but it also starts to erode other parts of the legislative process that it has come to have responsibility for in our current polarized partisan Congress.
Matt Grossmann: As you started, the new regular order in Congress is one big reconciliation bill to do everything on partisan terms and then a Defense Authorization Act and a continuing resolution at the end of the year to attach anything else that we might want to do in a more bipartisan fashion. Is this just going to institutionalize that process for the rest of this Congress and the following ones? And how far down this pet path are we?
Molly Reynolds: I tend to think we’re pretty far down this path. I think we’ve been for a while. And generally when I think about things that we might change to try to make Congress work better, I am constantly telling people that we have to begin from our current reality and try and figure out how to meet the institution where it is and use its current cadence and approach to doing things to slowly try and build up more legislative muscle. I’ll say you have heard some Republicans start to tease the possibility of another reconciliation bill. That is possible in terms of the way the budget process works and what’s available to them before the midterms. For me, the big question is what is there that might have the votes that they didn’t put in the one big beautiful bill already? That’s a mystery to me.
I’m not saying there aren’t things, but I think when you hear Republicans say that, that’s the first question you should ask. But I do think that we are, again, to return to where we started, this is in a lot of ways just the way Congress works now is particularly under unified party control. You do as much as you can in reconciliation, and then you have these other things that are seen as must pass because the consequences of not passing them are too high. And you figure out how to work but need bipartisan support because of the persistence of the filibuster in the Senate for non-reconciliation legislation. And so you figure out what kind of 60 vote coalition can you build and then you work backwards from there.
Matt Grossmann: What should we be watching next? And anything that you are working on now that you want to tell?
Molly Reynolds: I’ll say two things. One, we should be watching the fact that the end of the fiscal year is approaching on September 30th, and now that the reconciliation bill is behind Congress, how do those appropriation negotiations look like they’re playing out? Historically, Senator Collins, who is the chair of the Senate Appropriations Committee and Senator Murray, who’s the wrecking member have had a really productive relationship. And so does that matter at all in the ultimate resolution to this? Is there a possibility of a government shutdown either on October 1st or after that given the posture of the administration? What would a government shutdown actually look like? We know separately from anything that’s happened this year that OMB has a lot of flexibility in how it actually implements a government shutdown if one happens. And I think one of the reasons that Democrats were reluctant to shut down the government in March was out of, I think, genuine concern of what the actual realization of a government shutdown would look like.
Are there things that OMB would let just keep happening? Are there other things that they would be really draconian in cutting off? All that sort of stuff. And so I think that those are all things to watch. And then in terms of what I’m working on, I think one of the big questions that all of this has put on the table is, is it possible to get Congress to care about its power of the purse responsibilities? Again, what would that look like? How does it relate to the power of the federal courts in this area? These are big questions, and I’ve joked a lot over the last six months that I’m not a lawyer, but I occasionally now play one on television because it turns out that at this point, a lot of these questions aren’t actually questions about politics and congressional procedure. They’re questions about administrative law principles. And so figuring out where all this goes from here is a lot of what’s on my mind.
Matt Grossmann: There’s a lot more to learn. The Science of Politics is available bi-weekly from the Niskanen Center, and I’m your host, Matt Grossmann. If you liked this discussion, here are the episodes you should check out next, all linked on our website. Rules around the Senate filibuster. Does anyone speak for the poor in Congress? Are divided governments the cause of delays in shutdowns? How voters judge Congress. And do congressional committees still make policy? Thanks to Molly Reynolds for joining me. Please check out her work at Brookings and then listen in next time.
