Johnson kicks off next tax bill work, seeking fall passage

House Republicans are starting work on a follow-up to their recently enacted tax-and-spending law, aiming to pass provisions that were removed from President Donald Trump’s “one big, beautiful bill,” Speaker Mike Johnson said in an interview Wednesday with Bloomberg Government.

Johnson (R-La.) aims to enact a second, smaller tax bill “in the late fall” using the budget reconciliation process, he said. He’s trying a second time to successfully write measures that were effectively removed by the Senate parliamentarian from Republicans’ first bill (H.R. 1), aiming to draft them in a way that complies with that chamber’s arcane budget rules.

“It will not be as big. I hope it is as beautiful,” Johnson said.

The follow-up bill represents a smaller attempt to tie up loose threads after the enactment of a law that represents the bulk of Trump’s legislative agenda. It may be a heavy lift for a House Republican Conference that’s fatigued from the long hours of negotiating and frustrated by measures that didn’t become law.

Republicans managed to rally a fractious, narrow majority around a broad bill to extend Trump’s 2017 tax cuts, provide more than $300 billion in defense, border, and immigration spending, and hike the debt limit by $5 trillion. Republicans started planning for the bill in early 2024 and put in “countless hours of work to come up with that final product,” Johnson said.

Possible ingredients

That measure will likely include language to bar states from using their own funds to provide Medicaid to illegal immigrants, House Budget Chairman Jodey Arrington (R-Texas) told reporters Tuesday. That provision was removed from the enacted tax law because it didn’t comply with the rules of the budget reconciliation process, which allows Republicans to pass a bill with a simple majority in the Senate.

Republicans could draft the measure differently to make it more budget-focused, Arrington said.

Johnson said four to five committees will be involved in the second tax bill, including the tax-writing Ways and Means Committee and the Energy and Commerce Committee — fewer than the 11 in the measure signed July 4. He also said Republicans would seek to redraft measures that were pulled from the tax law due to the Senate’s limitation — named after the late Senate Appropriations Committee Chairman Robert Byrd (D-W.Va.).

“There are some priorities that did not make it into ‘reconciliation one’ that are still priorities for people — a couple of things that didn’t survive the Byrd test, and we’re looking at other ways, other angles maybe to try to include that” Johnson said.

It’s worth a try to rewrite some failed provisions, though it won’t be easy, Arrington said.

“It doesn’t mean there’s a guarantee that we’ll get it in there,” Arrington said of the contested provisions, but lawmakers should try “spending more time to nuance the policy so that it meets the test of significant budgetary impact.”

The GOP priorities will broadly revolve around reduced spending and more efficient government, Johnson said, declining to talk about specific tax provisions.

Less enthusiasm in Senate

Senate Republicans haven’t matched their House counterparts’ enthusiasm for a second bill. Lawmakers endured a long slog to enact the bulk of Trump’s agenda in the recently enacted measure. After their August recess, they’ll have to focus on government-funding measures to avoid a shutdown on Oct. 1.

Senate Majority Leader John Thune (R-S.D.) said a follow-up bill would be “a big undertaking,” in a Bloomberg Government interview last week.

“I don’t know,” Thune said. “We’ll see. I mean, I’m not, certainly not ruling it out.”

Johnson acknowledged that House Republicans would be busy in September passing appropriations bills to fund the government beyond the Sept. 30 deadline. Some House Republicans, including Arrington and Freedom Caucus Chairman Andy Harris (R-Md.), have said they may rely on a full-year continuing resolution keeping agencies running at their current budget levels.

But Johnson said he’ll seek to aggressively pass funding bills in September and work with senators on bicameral negotiations. He warned that Democrats are the main barrier to a deal.

“They’re gaming out how they can shut the government down,” Johnson said of Senate Minority Leader Chuck Schumer (D-N.Y.) and House Minority Leader Hakeem Jeffries (D-N.Y.).

Jeffries said Democrats are willing to work with Republicans to fund the government, but a deal “must be bipartisan and bicameral in nature.”

— With assistance from Jonathan Tamari