Republican tax hawks are worried that key Trump administration tax policies could expire at the end of 2025 if congressional leaders follow through on a plan to break up a massive conservative budget bill into two parts.
Reconciliation is a way to fast-track legislation on issues like taxes, the debt limit and federal spending by bypassing the Senate’s 60-vote threshold for passage, instead lowering it to a simple 51-vote majority.
It is a process normally used once per year, but incoming Senate Majority Leader John Thune, R-S.D., floated a plan earlier this month to split Republicans' reconciliation priorities into two bills – one dealing with the border and defense and a second aimed at implementing President-elect Donald Trump's tax policy. The plan was also backed by top Trump adviser Stephen Miller.
However, Republicans on the House Ways & Means Committee, including Chairman Jason Smith, R-Mo., are concerned it could put their goals – such as preserving Trump's 2017 Tax Cuts and Jobs Act – out of reach.
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"I think because we’ve already had some of the provisions expire or sunset, and the remainder of the legislation expires at the end of 2025, that waiting toward the second half of the year puts a lot of it at risk. And there’s no way we can allow these rates to expire," Rep. Nicole Malliotakis, R-N.Y., told Fox News Digital. "Americans across the board will see a tax increase, and it really jeopardizes our quest to bring manufacturing home."
She pointed out that Republicans are set to have a razor-thin majority in the next Congress.
"I do get nervous that, you know, one person can hold it up, or two people could hold it up, and I think it’s best to try to do it as early as possible," she said. "I think that’s a belief that’s shared by many of the members on Ways & Means."
Smith pointed out to Fox Business' "Mornings With Maria" that Congress has not passed two reconciliation bills into law in one year since 1997.
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"I am saying we need a reconciliation bill that has border, energy, permitting and tax. You put all four of those things together, we can deliver on that," Smith said.
He told Fox News Digital on Tuesday, "My focus all along is to make sure that we are best positioned to deliver on President Trump's tax proposals and policies."
The debate is putting top Republicans who will be in charge of crafting fiscal policy next year at odds, while both argue they are fighting for Trump's agenda.
Rep. Greg Murphy, R-N.C., said Smith was doing an "excellent job" and echoed concerns about a slim margin.
"I think it is a big challenge. We have a very slim majority, and there are at least, I believe, two people, if not three of the Republicans, who voted against it are still here," he said.
Thune and other Republicans who support the two-track plan argued that taxes are more complex of an issue and would take longer to hash out.
House Speaker Mike Johnson, R-La., told "Special Report" host Bret Baier on Tuesday night, "There probably will be at least two reconciliation packages. So, the determination right now is where does the tax piece fit and do we do that first out of the gates, or do you wait a couple of months to get all that done? Because it can be very complicated."
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House Freedom Caucus Chairman Andy Harris, R-Md., similarly argued, "I think we need to prove to the American people that we can actually defend our borders… The bottom line is I think they need to be on almost parallel tracks. But I do believe that taxes are much more complicated."
However, a senior House GOP aide asked what was complex about extending tax provisions that were already put in place in 2017.
"It’s confusing — given that extending the Trump tax cuts has been on the agenda for seven years and is a central campaign promise of [Trump's], how can including them in a reconciliation bill require extra time and consideration by Senate Republicans, many of whom have already pledged their support?" the aide posed.
The discussion is a preview of what Washington will look like next year when Republicans hold the White House and both congressional chambers.
If Republicans are unable to harness enough momentum to pass a tax bill next year, Americans across the country could see their taxes rise.
Ways & Means member Rep. Adrian Smith, R-Neb., said it "could be more difficult" to pass a tax bill if it's separated from the first reconciliation bill, but said he was "not at all concerned" about Republicans coming to an agreement.
Another member of the committee, Rep. Ron Estes, R-Kan., agreed with the committee chair that one bill "would be a much better solution for us to work and get that process done."
However, Rep. Drew Ferguson, R-Ga., also on the panel, did not give insight into his stance but said he was optimistic.
"I think this reconciliation process will be very different than what we did back in 2017, because I think members are better prepared, committees are better prepared, and I think the president's going to be much better prepared," he said. "So I wouldn't get too worked up over a division of the plans right now."
