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House GOP aims to start setting budget targets for tax and other policies Saturday

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House Republicans are hoping to start work on the budget targets for critical committees on Saturday — the first step in kicking off their ambitious legislative agenda involving energy, border and tax policy.

“The Ways and Means Committee is just going to be able to draft tax legislation according to what the budget reconciliation instructions are,” said House Ways and Means Chair Jason Smith (R-Mo.), who will be leading the charge on extensions of President-elect Donald Trump’s tax cuts.

“And so when the conference figures out what they want in those instructions, we’ll be able to deliver according to those parameters,” said Smith, when asked about the primary goal of a GOP conference meeting tentatively scheduled for Saturday at Fort McNair, an Army post in Southwest Washington.

Determining the cost and savings directives for the House committees is necessary to jump-start the so-called budget reconciliation, which will allow Republicans to pass their policy priorities without Democratic support in the Senate.

Specifically, if the conference can come to an agreement on the overarching framework, Republican leadership can put together a budget resolution that tells each committee the budgetary changes they must make over specified time periods.

According to Ways and Means member Nicole Malliotakis (R-N.Y.), there will be presentations by chairs of the committees at the GOP retreat, including not only Ways and Means but also Energy and Commerce and Homeland Security.

Republicans will be “going over a little bit of the playbook” for reconciliation, Malliotakis said. “They mentioned they could do toplines.”

Malliotakis also indicated that the GOP still had not come to a decision on whether to do reconciliation in two bills or put all of the GOP’s policy priorities together in one package.

Disagreements over the process have publicly pitted Smith against Trump adviser Stephen Miller and incoming Senate Majority Leader John Thune, with the latter two favoring a two-bill process with taxes coming second.

“Jason will focus on the need to do the tax package within the first reconciliation, not to delay it,” Malliotakis said.

Other topics that would be discussed as part of the reconciliation package include a broad agreement, ironed out by GOP leadership during the December debate over government spending, to slash spending by $2.5 trillion and increase the debt ceiling by $1.5 trillion — which came at the behest of Trump’s demands.

Any increase to the debt ceiling would be handled by the Ways and Means and Senate Finance committees.

“With all that we’re doing to restore fiscal health and sincerity, we ought to put the debt ceiling in there as well,” House Budget Chair Jodey Arrington (R-Texas) said Friday of the reconciliation bill.

New York and New Jersey Republicans also plan on insisting Saturday that any tax bill include an increase to the $10,000 state and local tax deduction. Their demands for the tax relief, otherwise unpopular in the GOP conference, prevented tax legislation from moving forward several times in the 118th Congress.

Rep. Nick LaLota (R-N.Y.) said he plans “to ensure, like President Trump insists, that [SALT] remains a priority in our tax policy.”

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Congress

Thune is ‘hopeful’ Mitch McConnell will return this week

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Senate Majority Leader John Thune said Monday he hopes his predecessor as top Republican, Mitch McConnell, returns this week from a hospitalization.

Thune said he had not yet spoken directly with the 84-year-old Kentuckian but is getting “readouts from his staff.”

Asked about McConnell’s condition or if he knew if he would be back this week, Thune told reporters, “I’m hopeful that he’ll be back this week.”

A McConnell spokesperson said Sunday that he had been admitted to the hospital but did not provide details on his condition or why he was hospitalized — a break from recent prior instances where the seven-term senator was hospitalized.

A former McConnell staffer who spoke on the condition of anonymity was told the senator was doing much better Monday without any further details on what put him in the hospital.

Daniel Desrochers contributed to this report.

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Senate to confirm Jay Clayton as soon as Thursday

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The Senate could vote as soon as Thursday on Jay Clayton’s nomination to serve as director of national intelligence — a lightning speed pace that will necessitate buy-in from all 100 senators.

Confirming Clayton could help shore up enough votes from Democrats to extend a government surveillance program that expired last Friday over opposition to Trump’s pick for acting director, Bill Pulte.

“He will come out of the committee Thursday, at least hopefully, and then if we get consent, we can move,” Senate Majority Leader John Thune said in an interview Monday about Clayton, who Trump only nominated for the job late last week.

Democrats “ought to be happy with Clayton,” said Thune, adding that he’s a “good” and “solid” pick.

Sen. Mark Warner of Virginia, the top Democrat on the Senate Intelligence Committee, floated Sunday to CBS News that Clayton could be confirmed this week if every senator cooperates.

Senate Intelligence will hold a hearing Wednesday on Clayton’s nomination. If every member of the panel agrees, he could then get a committee vote Thursday. Confirming Clayton on the Senate floor hours later would require getting agreement from every senator to speed up the process. Opposition from a single member will punt Clayton’s confirmation to next week.

Confirming Clayton Thursday would, crucially, limit — and potentially circumvent — Pulte from becoming acting director of national intelligence, which Trump has slated to take place Friday, June 19.

The president’s decision to put Pulte in charge after Tulsi Gabbard’s departure at the helm of the Office of National Intelligence sparked bipartisan pushback, with Democrats saying they will withhold support for extending Section 702 of the Foreign Intelligence Surveillance Act while Pulte is in the acting role. Congress allowed the key government spy authority lapse last Friday without a deal.

Trump threw another curveball into a FISA extension over the weekend when he posted on social media that he was against reauthorizing Section 702 unless a GOP elections bill is attached. That bill, known as the SAVE America Act, does not have the votes to get through Congress.

Thune threw cold water Monday on tying the two issues together.

“Yeah, he’s, as you know, passionate about getting that done and wants to use every opportunity to take a shot at it,” Thune said of Trump and his desire to enact the elections bill.

But, Thune said, “we can’t get FISA done” if the policies are linked.

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Senate eyes vote on updated housing affordability legislation

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Senate Majority Leader John Thune is planning to put an updated version of a bipartisan housing affordability bill on the Senate floor for a vote this week, according to two people familiar with the bill dynamics and two Senate Democratic aides granted anonymity to discuss ongoing plans.

The version of the 21st Century ROAD to Housing Act that the Senate will vote on will include most of the House-passed language, including a provision restricting large institutional investors from buying single-family homes. The legislation would also add back Senate bills that were dropped from the House package that passed last month, the two people and the two aides said.

The Senate legislation comes after talks between Thune, Senate Banking Chair Tim Scott (R-S.C.) and ranking member Elizabeth Warren (D-Mass.). The updated Senate package was also discussed with the House and the White House, the aides said.

Still, it’s unclear if House leadership and the White House have signed off on the legislation.

The Senate and House have gone back and forth for months on language for a housing affordability bill as lawmakers on both sides look for a win to tout during a midterm election season dominated by cost-of-living issues.

Both chambers overwhelmingly passed their own versions of the housing bill — the Senate 89-10 in March, and the House 396-13 in May. The White House supported the Senate-passed bill and then backed the House-passed bill after it retained most of the Senate’s language on reining in private equity and other large Wall Street investors in the housing market — a top priority for President Donald Trump.

The Senate’s updated legislation would remove two of the House’s community banking deregulation bills due to budget scoring concerns, said two of the people familiar: two bills that would modify the Federal Deposit Insurance Act around failed insured depository institutions. The Senate bill also added back a provision to authorize the Community Development Block Grant Disaster Recovery program for seven years, as opposed to a permanent reauthorization in the Senate’s March legislation.

The Senate additionally re-inserted several upper-chamber priorities, including the BUILD NOW Act, which would incentivize communities to build more housing through the Community Development Block Grant program; the Rental Assistance Demonstration bill, which would raise the cap on housing authorities to convert voucher-based assistance; the Moving to Work bill, which would aim to add a new cohort of MTW public housing agencies; and the VALID Act, which would require Federal Housing Administration mortgage disclosures to include cost comparison information for veterans.

The package retains core wins for the leaders of both the Senate Banking and House Financial Services committees and their members and reflects input from all four leaders of those panels, one of the people familiar said.

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