Connect with us

Congress

Rising energy prices threaten cornerstone of GOP midterm pitch

Published

on

DORAL, Florida — The economic fallout from President Donald Trump’s decision to go to war with Iran is imperiling the GOP’s legislative sales pitch ahead of the midterms, with energy price spikes threatening at least some of the pocketbook gains Americans are seeing from the sweeping tax cuts Republicans enacted last year.

Analysts with the Wall Street advisory and investment firm Evercore ISI estimated Monday that the impact on household costs attributable to the current crisis could erase the tax benefits from the “big, beautiful bill” for at least the bottom 30 percent of Americans — even if oil prices come off their $100-plus-per-barrel highs.

Some top Republicans acknowledged rising energy prices are cause for political concern.

“The price of gas is always kind of a benchmark,” Senate Majority Leader John Thune told reporters on Capitol Hill Monday. “I do think the fact that we’ve increased our supply here domestically will help ease it, but it’s something obviously we’ve got to pay attention to. And hopefully the operations in Iran … won’t be an extended situation.”

The impact of higher gas prices is hitting just as House Republicans gather for their annual policy retreat at Trump’s resort in Doral, Florida. The evidence could be seen just outside the gates, where regular gas was retailing at multiple stations for $3.59 per gallon — up about 70 cents from the Miami-area average on Jan. 1, according to GasBuddy.com.

The hope among Republicans gathered at the resort is that the crisis is short-lived, with several saying they believed Trump’s assurances that the supply bottlenecks caused by Iran’s effective blockade of the Persian Gulf would soon ease.

“I believe there’s a lot of emotion built into energy prices,” Rep. Chuck Edwards (R-N.C.) said in an interview. “I would look for things to settle down very soon.”

But other Republicans granted anonymity to speak candidly expressed real alarm as crude oil prices surged to nearly $120 a barrel overnight before settling later in the day below $90 — still about 30 percent above recent lows.

“If you are a Republican and not concerned right now, you are stupid,” one House Republican said, adding, “Hopefully, we will square this away sooner than later.”

Another House Republican, asked if the wartime crisis threatened to overshadow the benefits of the GOP megabill, replied, “Hell yes.”

“The most sensitive thing amongst most driving Americans is the price of gasoline,” the person added, saying it threatens to send Americans “right up the wall.”

Trump is scheduled to address lawmakers in Doral shortly after markets close Monday, and they will be listening closely to his message on the hostilities in the Middle East and his plans to address high energy prices. He has announced plans to get oil shipments moving through the Gulf again, including by providing naval escorts for tankers and backstopping insurance for vessels.

White House spokesperson Taylor Rogers said in a statement that oil prices will “drop dramatically once the objectives of Operation Epic Fury are achieved.”

“President Trump and his entire energy team have had a strong game plan to keep the energy markets stable well before Operation Epic Fury began, and they will continue to review all credible options,” she said.

But the president so far has shown little interest in pushing his party to foremost focus on legislation tackling affordability, as some of his political aides have advised. Instead, Trump is pressing Senate Republicans to pass a sweeping GOP elections overhaul bill — adding on demands for a near-complete ban on mail voting and unrelated policy provisions like banning transgender surgeries for minors.

Hours before taking the stage in front of House Republicans at his Florida resort, he reiterated his request.

Even before the oil price shock, Trump’s agenda had come with a hefty price tag for consumers. Analysts at the Tax Foundation have already determined that the president’s trade policies cost Americans $1,000 on average last year, matching the average size of refund checks that Trump officials say will ease cost-of-living concerns.

The Supreme Court struck down many of Trump’s tariffs, but those that remain are projected to cost households $600 on average this year, according to the nonpartisan think tank.

House Republican leaders are hoping to keep the annual policy retreat focused on their legislative priorities ahead of the midterms. Rep. Lisa McClain of Michigan, the GOP Conference chair, said ahead of the retreat she hoped to firm up the party’s messaging around last year’s megabill.

But going into the Doral resort Monday, members were trained on all the reasons they hoped the politically perilous price spike would be short-lived.

House Natural Resources Chair Bruce Westerman (R-Ark.) said in an interview that reopening the Iranian-controlled Strait of Hormuz “would be even better for energy prices, although we’re seeing obviously a peak right now with the war going on.”

Rep. Riley Moore (R-W.Va.) said the supply crunch was “not an existential threat to us because of all the things we’ve done to make ourselves self reliant in terms of energy resources,” while acknowledging the “fungible” nature of the global oil market. He was hopeful about more ships navigating the Strait of Hormuz.

Rep. Carlos Gimenez (R-Fla.) said in an interview a “short-term gas price hike is … not what’s important.”

“What’s important is the long term benefits of having a peaceful Iran that means that gas prices will drop dramatically for the long term,” he said. “I’m not that concerned about it.”

Sam Sutton contributed to this report.

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Congress

‘Paradigm shift:’ How Trump’s budget request will keep everyone guessing

Published

on

In the wonky world of federal budgeting is the most tired cliche of all: The president proposes, and Congress disposes.

In other words, any White House budget request is nothing more than a political draft that’s ultimately going to be significantly altered — or torn to shreds — by lawmakers who hold the constitutional power of the purse.

But this administration’s moves to wrest spending authority away from Congress have turned that dynamic on its head. A year of funding clawbacks, shutdowns and Supreme Court challenges has changed the way many in Washington are looking at President Donald Trump’s budget plan released Friday. Ultimately, even if Congress refuses to approve Trump’s latest funding wishes, the administration may implement many of them anyway.

Plus, it’s not just Congress and the White House involved in the budget conversation right now — everyone is still waiting to see if the Supreme Court weighs in on the legality of the so-called pocket rescissions that Trump employed last year to circumvent Congress and unilaterally cancel nearly $5 billion in foreign aid spending.

“It’s hard enough to get 12 appropriations bills done and even harder when you’re not sure if the deal that you strike is even a deal,” said Joe Carlile, an associate director at OMB during the Biden administration and longtime House Appropriations aide who now runs Bluestem Consulting.

The pocket rescissions gambit refers to occasions where an administration sends Congress a list of previously-approved funding to eliminate with less than 45 days to go until the end of the current fiscal year, then “pockets” — or withholds — that funding until a new fiscal year begins, at which point it is considered expired.

Though the Supreme Court, in a preliminary decision last fall, allowed the Office of Management and Budget to proceed with canceling the foreign aid funding, justices haven’t yet weighed in on the larger pocket rescissions question. That could only empower Office of Management and Budget Director Russ Vought, certainly the most powerful OMB director in recent memory, in his approach and the expansiveness of his mandate.

“Under President Trump’s bold leadership, every tool in the executive fiscal toolbox has been utilized to achieve real savings,” Vought wrote in an introduction to the administration’s newest fiscal framework.

“A historic paradigm shift in the budget process is occurring and is producing real results for the American public,” he added.

These days, Vought’s aggressive use of his budget tools looms over every budget debate and document, including the one released Friday. Vought’s proposal asks Congress to approve a massive $1.5 trillion defense request as well as a $73 billion cut to domestic programs, including many that lawmakers refused to cut last year.

“Given the Administration’s focus on nondefense discretionary spending reductions, most budget analysts assume that this would be the target of rescissions if they were unsuccessful in the appropriation process,” said G. William Hoagland, a senior vice president of the Bipartisan Policy Center who spent decades on Capitol Hill as a senior Republican budget aide. “It does change the way we look at the request.”

In another power move Friday, the Trump administration is asking Congress to ram through $350 billion in defense spending to assist Iran conflict through the party-line budget reconciliation process as an end-run on the Senate filibuster. That recommendation would upend one of the last bipartisan traditions on Capitol Hill: funding the government through the dozen annual government funding bills.

The proposal has Democrats and Washington lobbyists now closely watching the budget proposal and OMB’s current spending moves for signs of what the White House may try to muscle through, rescind or delay next — and how they should approach Appropriations Committee markups later this year in the House and Senate.

Meanwhile, less than a year after Elon Musk and DOGE rampaged through the federal bureaucracy, the government — just five months past its last major shutdown — remains in the grip of a partial closure, with a deal to fully open the Department of Homeland Security still on the table.

Congressional appropriators have sought to assert their independence in previous budget battles. Still, their power has been declining for the better part of three decades now — and the way Washington budgets seems increasingly disrupted.

“While the Administration proposes a budget, Congress holds the power of the purse,” Senate Appropriations Chair Susan Collins (R-Maine) said in a statement Friday.

True, but who “disposes” is as unclear as ever.

Continue Reading

Congress

Trump asks Congress to supersize military budget, slash domestic programs

Published

on

President Donald Trump called Friday for Congress to back a $1.5 trillion defense budget alongside yawning reductions to domestic programs — making official the ambitious military increase he’s been teasing for months.

In a slate of budget fact sheets ahead of an expected broader rollout of the president’s fiscal blueprint, the White House detailed a military budget hike of more than 40 percent for the fiscal year that begins in October. The Trump administration is formally proposing Republicans in Congress enact a large chunk of that defense cash — some $350 billion — using the party-line reconciliation process to skirt the Senate filibuster and forgo bipartisan negotiations.

Republican leaders on Capitol Hill are starting to embrace the concept of sidelining Democrats to boost Pentagon dollars and immigration enforcement accounts currently unfunded amid the broader Department of Homeland Security shutdown. But Trump will struggle to build enough political will on his own side of the aisle to fulfill his defense goals as fiscal conservatives demand commensurate spending cuts after grudgingly backing the multi-trillion-dollar tax and spending package Republicans enacted along party lines last summer.

While calling for a historic increase in the military’s budget, the White House is also seeking a 10 percent cut to nondefense spending, with a proposed reduction of $73 billion from federal programs outside the military. Major targets of the administration’s proposed spending reductions are environmental programs across many federal agencies, including nixing $15 billion in grants for efforts such as renewable energy technology and $4 billion in transportation funds for programs supporting infrastructure to charge electric vehicles.

The administration is recommending that Congress eliminate $1.6 billion in research programs run by the National Oceanic and Atmospheric Administration and asking lawmakers to find $45 million in savings by slashing the Interior Department’s renewable energy programs. The White House wants another $642 million in cuts to “woke and wasteful international financial institutions” within the Treasury Department budget.

The blueprint, prepared by White House budget chief Russ Vought, proposes the elimination of current fair housing initiatives at the Department of Housing and Urban Development, as well as the Community Development Financial Institutions Fund that awards funding to community banks and other financial institutions that lend to communities traditionally underserved by the banking industry.

It also calls for Congress to zero out funding for the Commerce Department agency that promotes minority-owned businesses and the National Endowment for Democracy, which promotes freedom in countries with authoritarian regimes that threaten U.S. interests.

For the second year in a row, Trump’s fiscal framework arrives months late and is not expected to include all of the data lawmakers rely on to write funding bills for the upcoming fiscal year. Last year, Republican lawmakers were still pressing Vought for those details well into the summer.

Continue Reading

Congress

Republicans want to go it alone on ICE funding. It might be a slippery slope.

Published

on

If last year’s Republican megabill served as Congress’ gateway drug to party-line government funding, the GOP’s latest spending plan makes clear it was habit-forming.

Nine months ago, Republicans used the budget reconciliation process to skirt a Democratic filibuster and enact more than $280 billion for the Pentagon and the Department of Homeland Security. It shattered conventional wisdom on Capitol Hill that reconciliation’s special power couldn’t — and shouldn’t — be used to circumvent the across-the-aisle work Congress does each year to fund federal agencies.

Now President Donald Trump has given congressional Republicans until June 1 to fund Immigration and Customs Enforcement — an entire government agency — through a partisan process that won’t require a single Democratic vote. Republicans are also mulling whether to fund a war in the Middle East that same way, with the White House considering a $200 billion request for supplemental funding for the Pentagon.

Republicans say this is happening because Democrats refuse to back a full Department of Homeland Security funding measure without adding guardrails on immigration enforcement activities the GOP finds intolerable, leading to the current record-breaking shutdown. Democrats also are unlikely to support giving the Trump administration additional dollars to bolster its military presence in Iran.

“Democrats have put us where we are, and we have to deal with it,” Sen. John Hoeven of North Dakota, a senior Republican on the Senate Appropriations Committee, told reporters Monday. “We don’t have a choice.”

But Hoeven also acknowledged it could be a slippery slope. Asked whether he was worried about setting a new precedent, he conceded, “Me, as an appropriator? Yeah.”

Democrats previously used their own party-line bills during the Biden administration to fund programs opposed by Republicans, such as an $80 billion infusion for IRS tax enforcement. But that was in addition to the funding agencies received through regular appropriations, not as a substitute for it.

Democrats are pushing back on the idea they are responsible for the GOP’s go-it-alone approach — and they are warning about dire consequences.

Sen. Chris Coons (D-Del.), a senior appropriator, said it would be “a tragic mistake” for Republicans to bankroll a war while sidelining their minority party colleagues.

Enacting funding through reconciliation, Coons said, “requires no compromise with the other party. And if that becomes the sole way we fund the core functions of government, that is a bad idea.”

Senate Majority Leader John Thune suggested Thursday that the fallout from the current funding fight could have long-term implications, warning that it’s “not good for the country or for the future of the appropriations process or, for that matter, the future of the Senate.”

It’s just the latest blow to bipartisan norms of the congressional appropriations process during Trump’s second term. White House budget director Russ Vought has executed a playbook for undercutting cross-party funding negotiations, and Republican leaders have gone along with those tactics, including the stopgap funding patch that riled Democrats last spring and the enactment of a clawbacks package last summer that canceled billions of dollars Congress previously cleared with bipartisan support.

Many Republicans aren’t happy with how the latest step is unfolding, with top GOP appropriators especially concerned about funding a war effort without Democratic buy-in.

“I would prefer not to,” House Appropriations Chair Tom Cole (R-Okla.) said late last month about clearing an emergency military package through the party-line process. But, he added, “we’ll wait and see. A lot of that depends on what the Democrats want to do.”

Three Hill Republican aides, granted anonymity to speak candidly, privately forecasted that the current funding breakdown will fuel a tit-for-tat future for the appropriations process. The worry is that Republican presidents will routinely be forced to use reconciliation to clear immigration enforcement funding through Congress, and Democratic presidents will have to use it to fund nondefense efforts GOP leaders are less keen on boosting.

Republicans are now exploring enacting immigration enforcement funding for the remainder of Trump’s presidency — not just the current fiscal year.

Rep. Henry Cuellar of Texas, the top Democrat on the Homeland Security funding panel, said a future Congress under Democratic control could follow the GOP’s example and use reconciliation to fund agencies such as the Environmental Protection Agency or the Department of Health and Human Services.

“So I certainly have concerns with a bad precedent that they will be setting,” Cuellar said in an interview Thursday.

Matt Glassman, a senior fellow at Georgetown University’s Government Affairs Institute, said “the big deal here” is “shoving the dysfunctional discretionary stuff into reconciliation.”

“Because of the ability to do party-line legislating in the reconciliation bills, it allows a back door to party-line discretionary appropriating,” he said in an interview.

Glassman also sees the creeping use of reconciliation as a way to sidestep mutually negotiated guardrails on spending. Limitations on use of money, and how much time agencies have to spend it, are longtime hallmarks of bipartisan funding negotiations.

“If you throw money into these bills, then you lose sort of the control aspect that they love to put into the appropriations with the limitation provisions,” Glassman said.

Senate Appropriations Chair Susan Collins (R-Maine) said last week that Democrats’ refusal to fund the Border Patrol or ICE without major policy changes “sets a precedent that they may one day come to regret.”

Other senior congressional appropriators contend that the bipartisan agreements Collins helped broker in recent months are proof that the annual funding process is working and that reconciliation is not a workable alternative. Despite the DHS drama, Congress managed to approve more than $1.6 trillion for every other federal department following a 43-day government shutdown last fall.

Connecticut Rep. Rosa DeLauro, the House’s leading Democratic appropriator, said in a statement this week that “reconciliation will never be a substitute for the appropriations process.”

“Republicans must realize our country is safer and stronger when government funding decisions are made by both Democrats and Republicans in the House and in the Senate,” she added.

Riley Rogerson contributed to this report.

Continue Reading

Trending