Congress approves agreement to implement Trump’s legislative agenda

Republicans in Congress approved an agreement Thursday to begin implementing President Donald Trump’s agenda on taxes, energy and immigration, setting up a sprint to draft legislation that the GOP hopes will reshape the federal government and much of the economy.

The House in a 216-214 vote adopted a budget resolution that allows Congress’ GOP majorities to use what’s known as the reconciliation process. That permits Republicans to bypass a Democratic Senate filibuster so long as the two chambers work in lockstep drafting policies in what Trump has taken to calling his “big, beautiful bill.”

Securing passage of the Senate-amended budget resolution by a narrow, fiscally conservative House majority was an immense challenge even with Republicans in charge of both chambers of Congress and the White House. It required frequent meetings between factions across Pennsylvania Avenue and separate commitments from the White House, Senate and House as late as Thursday morning to convince skeptics that Trump’s agenda would sharply cut federal spending and not add more to the ballooning national debt.

House Speaker Mike Johnson, R-La., and Senate Majority Leader John Thune, R-S.D., held their first joint news conference as leaders to announce an agreement to cut at least $1.5 trillion in spending over 10 years.

“Our ambition in the Senate is we are aligned with the House in terms of what their budget resolution outlined, in terms of savings,” Thune said.

The joint announcement was seen as an effort of good faith by roughly 20 holdouts: budget hawks and members of the House Freedom Caucus who delayed a planned vote Wednesday until they received a firm commitment from the Senate on spending cuts. But the chambers remain sharply divided over how to find the savings – and whether it will truly reduce the federal deficit, as House hard-liners have demanded.

In the Senate on Thursday morning, Finance Committee Chairman Mike Crapo, R-Idaho, was foggy on the details of any deal, saying, “I don’t know what agreement you’re referring to.” And when asked whether some Republicans may balk at $1.5 trillion in spending cuts, Thune acknowledged there are senators “on both sides of that issue” and they’ll “have to sort it out.”

Reps. Chip Roy, R-Texas, and Ralph Norman, R-S.C., both stated that the written commitments – which Freedom Caucus members expect to be made public soon – include reducing spending by curtailing funds in Democrats’ 2022 Inflation Reduction Act, eliminating “waste, fraud and abuse” in Medicaid subsidies, and other measures.

“This is not over. We will continue to hold everyone’s feet to the fire to the commitments that they’ve made,” said Rep. Eric Burlison, R-Mo.

At issue was how Republicans tackle renewing major portions of Trump’s 2017 Tax Cuts and Jobs Act, which expire at the end of the year, without raising the deficit. Republicans aim to renew the law – at a cost of $5.5 trillion – with new business tax breaks and major new spending to power the White House’s mass deportation campaign. But the plans that the House and Senate drafted to reach those marks were more than $1 trillion apart, threatening to stall progress on legislation that Trump and the GOP hoped to claim as a major early accomplishment.

The House in February passed a budget that set ambitious goals to offset the cost of the tax cuts and find additional savings in social safety net programs, such as Medicare, Medicaid and SNAP, the Supplemental Nutrition Assistance Program, formerly known as food stamps.

But that framework spooked the less budget-conscious Senate, which was wary of getting boxed into cutting popular benefits programs that could politically hurt Republican senators and House members representing swing districts.

The Senate over the weekend amended that budget to set a floor of just $4 billion in spending reductions over a 10-year window and approve an accounting maneuver that zeroes out the multitrillion-dollar cost of the tax cuts.

That enraged House fiscal hawks who Wednesday night held final approval of the budget hostage in exchange for an agreement with the Senate for more deficit reduction. Trump had announced support for the Senate measure after backing the initial House proposal, confusing loyalists who thought the president wanted steep cuts to federal spending.

“I support the president, I trust the president. I do not trust the Senate,” said Rep. Andrew Ogles, R-Tenn. “I’ve seen this movie. I know how it ends. Why are we going down this path?”

On top of the spending cuts, lawmakers said, the legislation can generate hundreds of billions of dollars in federal revenue by allowing additional energy leases and auctioning off access to the valuable electromagnetic spectrum, which is necessary for everything from wireless technologies to military communications and radars.

They also hope that renewing the 2017 tax cuts will spur economic growth, though Congress’ nonpartisan bookkeepers and leading independent economists say their projections are far too optimistic, especially after Trump’s trade war has rattled global markets.

Congressional leaders pitched the budget legislation as a salve for investors who have seen portfolios slide over Trump’s tariffs.

“I do hope and believe that the vote today is a very strong signal to the markets, to investors, job creators, entrepreneurs, the people that make the economy run, that Congress is going to get us on sound footing,” Johnson said.

But the tariffs threaten to push the economy into recession, analysts say, meaning that the additional tax revenue Republicans anticipate from growth might not materialize.

Trump administration policies that are not part of the legislation should also be counted as budget savings, Crapo said, even though congressional bookkeeping standards demand they remain separate.

Those policies include savings from the U.S. DOGE Service, many of which are facing legal challenges, and business deregulation.

Crafting actual legislation that follows the budget outline and can pass both chambers – almost certainly with only Republican votes – could still pose a major challenge. Moderate Republicans in the House might rebel over cuts they feel put their re-elections at risk, just as conservatives held up the budget resolution for not going far enough.

Rep. Jeff Van Drew, R-N.J., said he thought the tax cuts “are a separate part” that would not be offset with new spending cuts or revenue. He warned the Freedom Caucus against “screwing us” in reconciliation by slashing benefit programs.

“If we get screwed, we are not voting for” the final policy package, he said.

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Paul Kane, Liz Goodwin, Mariana Alfaro and Theodoric Meyer contributed to this report.