Thune’s big, bold bill has rattled House Republicans

Senate Majority Leader John Thune’s “big, bold bill” has indeed sent ripples through the Republican Party, particularly within the House of Representatives, igniting a significant legislative battle over the future of federal spending and tax policy. This ambitious measure, championed by the Senate Majority Leader, proposes deeper spending cuts, more extensive tax reductions, and a steeper increase in the debt ceiling compared to its House counterpart, creating immediate tension and division across the US Congress.

The immediate aftermath of the Senate’s narrow 51-50 vote, which saw Thune lose three of his own members, has left House Speaker Mike Johnson in a precarious position. Described by some House Republicans as a “non-starter,” the Senate bill has drawn Speaker Johnson’s vocal displeasure, with reports indicating he is short “well over 20” votes needed for passage. This aggressive legislative strategy, while declared by Thune as one where “failure is not an option,” poses a genuine possibility of rejection, marking a contentious start for the new majority leadership in this unfolding legislative battle.

All reconciliation bills inevitably precipitate a power struggle between the two chambers of Congress, and this current spending bill is no exception. While President Trump initially sided with the House in the procedural battle, decreeing a single unified bill, the long-term implications favor Thune if his Senate version prevails. Such a victory would allow him to assert significant influence on three crucial fronts: establishing baseline policy for future fiscal discussions, securing permanence for critical business tax cuts, and broadening the scope of entitlement reform.

A key aspect of the Senate’s approach, championed by Thune and Senate Finance Chair Mike Crapo, involves using baseline policy to determine the true cost of tax proposals. This accounting shift grants Congress a mechanism to extend existing tax cuts without immediately acknowledging the budgetary impact, a move that directly facilitated making Trump’s business tax cuts permanent—a cornerstone priority for Senate Republicans. This bold tax policy is predicated on the belief that it will stimulate the robust investment necessary to achieve 3% economic growth, despite accumulating $3.3 trillion in deficit spending, exceeding the House’s $2.8 trillion, as per the Congressional Budget Office.

The most contentious element of the Senate debate revolves around lowering the threshold for the Medicaid provider tax, an area where Senator Thune maintained an unyielding ideological posture. He framed this as the first “meaningful” step towards entitlement reform, a significant objective for conservative factions within the Republican Party. Securing the necessary votes for this spending bill proved challenging, requiring intricate negotiations, including an agreement with Senator Lisa Murkowski to secure the crucial 50th vote, which subsequently led to concessions like allowing Alaska to retain more SNAP benefits and establishing a $50 billion fund for rural hospitals.

The proposed cuts to the social safety net within Thune’s bill have predictably sparked outrage among Democrats, highlighting a deep ideological chasm in the US Congress. However, for Thune and Senate conservatives, these cuts were paramount, even at the cost of losing the support of moderate senators like Thom Tillis, who recently announced his retirement, and Susan Collins, the sole Republican senator representing a state won by Kamala Harris. This legislative battle underscores the formidable challenges confronting the Republican Party’s new leadership in forging consensus on complex economic and social policy, ultimately shaping the nation’s fiscal direction.