“Megabill” In the Works in Congress
On April 10, after weeks of deliberation, the House and Senate agreed to a budget blueprint, unlocking the reconciliation process for the Republican-controlled Congress to advance the Trump Administration’s top legislative priorities. The blueprint for what has been termed a “megabill” sets congressional spending and savings targets for defense, border security, energy and tax policy.
Budget reconciliation affords Republicans expedited procedures for legislation. And yet, having agreed upon a framework, both chambers now face the harder task of writing the bill, including reconciling major intraparty differences. The blueprint targets at least $1.5 trillion in spending cuts, but the actual target and how the House and Senate will achieve it remain up for debate.
Lawmakers have eyed safety net programs such as Medicaid for possible cuts. They have also looked to scale back clean energy tax credits and deductions from the $369 billion Inflation Reduction Act passed under the Biden Administration. These tax incentives, however, have been deployed in both Democratic and Republican districts with such laudable results that last Thursday, four Senate Republicans called on the Senate Majority Leader to protect clean energy investments throughout the reconciliation process.
Both chambers are in recess now through April 25. As Congress works to deliver a bill for the President’s signature by Memorial Day, where lawmakers propose cuts will be something to watch. We know municipal fiscal capacity is inextricably linked to national fiscal policy.
Courts Rule on EPA Funding Cuts
To date, the U.S. Environmental Protection Agency and the Department of Government Efficiency have engaged in four rounds of funding cuts, targeting 400+ grants seeking to promote diversity, equity and inclusion as well as environmental justice. Meanwhile, grants through the Solid Waste Infrastructure for Recycling program are confirmed to move forward.
The sweeping cuts at EPA have been challenged in court. This Tuesday, a federal judge ordered the agency to release unlawfully frozen funds. In the ruling Judge Mary McElroy stated, “agencies do not have unlimited authority to further a President’s agenda, nor do they have unfettered power to hamstring in perpetuity two statutes passed by Congress during the previous administration.” The statutes in question are the Infrastructure Investment and Jobs Act and the Inflation Reduction Act that brought historic levels of funding for infrastructure, housing, clean energy and other community investments.