With budget reconciliation on tap this week, everything is on the line in the Senate... but only if you believe the Fourth of July deadline for a Rose Garden signing ceremony is meaningful enough to force success. 

Right now, it looks like Senate Majority Leader John Thune (R-SD) will press ahead, even at the expense of next week's recess. His task is tougher than that faced by House Speaker Mike Johnson (R-LA) last month in getting H.R. 1 to the Senate. Speaker Johnson had to do just enough to get it over the finish line in the House. Leader Thune needs a bill that can pass both chambers. If all goes according to plan in the Senate  – always a dicey assumption  – this is how it should unfold.

Later this week, once the "Byrd Bath" is complete, Leader Thune would bring to the floor a unified reconciliation bill judged to be within reasonable range of securing a House majority vote – presumably resolving the differences with respect to the level of Medicaid cuts, the individual state and local tax (SALT) deduction cap, the phase-out of Inflation Reduction Act (IRA) green energy credits, and a host of other issues. Senate rules provide both parties no more than 10 hours of debate. Democrats can be expected to use every minute available to make their case against the bill. Republicans may speed the process by yielding back a few hours. 

We're especially interested to see if Senate Committee on Finance Chairman Mike Crapo (R-ID) engages in any tax colloquies on the floor with other colleagues. These pre-scripted Q&A sessions between the Chairman and senators typically seek to firmly cement the intent of Congress for a particular provision. They can give Treasury regulators more clear instructions on implementation and forestall future litigation. The lack of a Committee on Finance markup and an associated committee report arguably increases the demand for such colloquies.

Once debate time expires, the vote-a-rama begins, allowing opponents of the bill to offer an unlimited number of amendments. Where Republicans may need to adopt an amendment or two on the floor to reflect changes needed for passage, Democrats are expected to make full use of the opportunity to force many difficult votes on Republicans – although all are likely to fail on a partisan vote. Don't be surprised if the Senate breaks its 44-vote record set back in 2008. 

Fending off these amendments and getting the final product to the House will take a few days. It could easily drag into the weekend, delaying the Fourth of July recess before final passage. From there, Speaker Johnson and the president would join to force the weight of the world on any Republican House members with second thoughts about supporting final passage.  

A different (and some would say more realistic) timeline puts the reconciliation bill on pace for Senate passage by the Fourth of July. Under this scenario, July would see GOP leaders in Congress working behind closed doors to fashion the delicate policy balance needed to squeeze a final bill through each chamber. 

This timeline is a bit longer but punctuated with a real deadline to hasten conclusive action: Treasury is forecasting an August drop-dead date for lifting the statutory debt ceiling. The reconciliation bill would raise the debt limit, making it a must-pass bill with a real deadline that Congress cannot waive. #TaxTake

• Senate tax title
• Senate section-by-section summary
• House-passed H.R. 1
• JCT revenue estimate for H.R. 1 
• JCT description of Ways & Means Chairman's substitute

Upcoming Speaking Engagements

Marc will present a legal and regulatory outlook at the CalCPA 2025 Entertainment Industry Conference on June 26.  

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