Top Republicans Agree to Disagree on 2025 Tax Bill Approach

The top House tax writer is reasserting his position in favor of a single-bill approach for reconciliation next year after meeting with the incoming Senate majority leader, who is pushing for a two-bill format that puts tax second.

House Ways and Means Committee Chair Jason Smith, R-Mo., met with incoming Senate Majority Leader John Thune, R-S.D., Dec. 11 to discuss their differing perspectives on how to structure the reconciliation process in 2025. Smith has been avocal opponentof Thune’stwo-bill proposal, which would set up a first bill addressing border security, defense, and energy and a second focused on tax.

The reconciliation process would permit expedited consideration of tax legislation. The first step is a budget resolution that includes instructions to committees to make changes to laws within their jurisdiction, followed by the drafting of a reconciliation bill to achieve that specified budget outcome.

Senate Republicans have characterized the two-bill format as setting up an easier legislative win on immigration earlier in the year to tee up the more complicated fight over tax extensions. But Smith has criticized the idea as too challenging given the House’s slim majority and as not properly prioritizing tax policy ahead of the deadline to extend expiring provisions of the tax Cuts and Jobs Act at the end of 2025.

Coming out of the meeting with Thune, Smith declined to discuss the outcome of the talks, but said he hasn’t altered his stance, preferring one bill over two in 2025.

“I haven’t changed, it’s the right policy, and it’s the right process in order to have success,” Smith said.

Thune called the meeting a “good conversation” to help understand Smith and other House Republicans’ position on the format.

“Obviously we’ll see different views. . .amongst our members on the best path forward, but we all want to get to the same destination,” Thune said.

Thune said he still favors a plan that prioritizes an early result on reform for border security while still addressing tax afterward.

“I think there’s a way to get an outcome on that early on, knowing full well that we still have to deal with all the tax pieces later,” Thune said.

With the debate within the party ongoing, incoming Senate Budget Committee Chair Lindsay Graham, R-S.C., is working with members on a potential budget resolution, Thune said.

Meanwhile, House Budget Committee Chair Odey C. Arrington, R-Texas, said he expects his committee will move first on the budget resolution because of its advance work on spending reductions and a balanced budget framework. Arrington also sits on the Ways and Means Committee.

“That kind of preparation allows us to move with speed and with effectiveness that I don’t believe the Senate can move with,” Arrington said, noting that the Senate’s “first job” is populating the incoming president’s Cabinet by confirming nominations.

House Tax writer Take

The path forward is apparently in the ear of the beholder. Ways and Means Committee member Beth Van Duyne, R-Texas, said her take from a late evening Dec. 10 meeting in House Speaker Mike Johnson, R-La.’s, office with Republicans from several committees was that a tax bill would go first.

“The discussion last night was potentially two bills, but their preference is to have the tax bill first and then followed by getting whatever we can in it,” Van Duyne said.

“I think the idea is that we could get a tax bill in March,” she said. “Yes, it’s complicated, but we already have a very strong, provable framework.”

Arrington said he was also at the meeting, though his recounting didn’t include the arrival at a consensus.

“There are advantages to doing one bill and having the border as part of the sweetener to get 218” votes, which would be a majority of the 435-member House, he said. “But there are equally good arguments for a quick win and a targeted reconciliation on the most important issue for our country right now. . .and that’s stopping the flow of illegal immigration and securing the border.”

“If the speaker decides with our members that we should join the Senate and go with a slimmed-down targeted reconciliation bill, I think it should be about security, and I think energy should go into the broader economic package,” Arrington said.

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