April 2025 Policy Pulse

The pace has not slowed in Washington, D.C. as Republicans feverishly attempt to address differences within the party and budgetary hurdles preventing them from passing legislation featuring tax reform and other GOP priorities. Meanwhile, the president has announced a universal 10% tariff on imports from all countries.

Status of tax reform

Competing budget resolutions

As discussed in detail in our March Policy Pulse, the Senate and House of Representatives passed separate, vastly disparate budget resolutions. Also as noted in our March edition, the chambers’ differing strategies must be reconciled before any ultimate legislation can be drafted. However, Republican lawmakers are currently following an unconventional strategy whereby they move forward despite the differences in the budget resolutions, with each chambers’ spending and saving instructions addressing their respective committees alone and deferring to the other side of the Rotunda to instruct the committees under its purview.

On April 2, the Senate unveiled an updated budget blueprint which mirrors the House’s one-bill strategy but critically differs from the lower chamber’s budget as the Senate’s calls for use of the highly unconventional “current policy” baseline. As previously discussed in this space, this baseline assumes any provisions set to expire by statute will be extended in accordance with the policy in effect and as such, said extensions have no associated cost. Of course, the expiring provisions at issue are those under Tax Cuts and Jobs Act (TCJA) which sunset on Dec. 31, 2025. Use of the current policy baseline presumably allows for these provisions to be made permanent by any ultimate reconciliation bill. Critically, the Senate parliamentarian has yet to formally approve this approach, which Republican Senators were reportedly seeking ahead of unveiling their plan. However, they shifted course, with Senate Budget Committee Chair Lindsey Graham (R-SC) stating he has the authority under Senate rules to set the budget. In addition to not yet having formal approval by the parliamentarian, which Democrats have said they will seek to have her make a ruling if Republicans indeed attempt to bypass her altogether, House Budget Committee Chair Jodey Arrington (R-TX) and other deficit hawks in the lower chamber panned the blueprint for the impact it would have on the national debt. This undoubtedly calls into question whether this updated budget could pass the House, where Republicans have a razor thin majority.