Morning Report — GOP lawmakers are playing legislative Jenga

In today’s issue:  

• GOP quandary: “Trainwreck” or “big, beautiful bill?"
• DOGE seeks to centralize your personal data
• Biden: “Right decision” to exit 2024 contest
• India, Pakistan tensions reach boiling point

Republicans in Congress are looking to regroup on President Trump's sweeping agenda, which one Senate GOP lawmaker called a “train wreck,” with just weeks to go before their self-imposed deadline. 

At this stage in the negotiations, consensus appears far out of reach.

Conservatives are threatening to oppose the measure because it doesn't do enough to cut the deficit — and moderates are upset because of potential cuts to Medicaid. 

A group of 32 House conservatives sent Speaker Mike Johnson (R-La.) a letter on Wednesday saying they would only support a GOP budget reconciliation bill if it does not add to the deficit, meaning that if Republicans fail to come up with enough spending cuts, they will also have to accept a smaller tax cut to compensate.

“The deficit reduction target must be met with real, enforceable spending cuts — not budget gimmicks,” House Ways and Means Committee Rep. Lloyd Smucker (R-Pa.) wrote in a letter signed by conservatives.

The letter comes after Johnson on Tuesday ruled out steep cuts to Medicaid as part of the bill, which Senate GOP leaders criticized behind closed doors at their Wednesday conference meeting, faulting their House counterparts for not moving aggressively enough on deficit reduction. The Hill’s Alexander Bolton writes that some GOP lawmakers are privately mulling moving back to the Senate's two-bill track as tax reform has become the toughest issue to resolve and Republicans remain divided on several issues.

“We are keeping very close tabs on it,” said a Republican senator of the negotiations in the House, who said the two chambers are heading in separate directions, with little direct negotiation. “Sooner or later we have to pass the same thing and I’m worried that this is potentially a trainwreck. We can’t really get on the same page.”

▪ Politico: Republicans want to shift safety-net costs to states. It’s not going over well.

▪ The Hill: Proposed reductions in federal funding for the Supplemental Nutrition Assistance Program, or SNAP, are the latest flash point for Republicans as they work through sticking points on the “big beautiful bill” of Trump’s legislative priorities.

While Johnson continues to publicly insist lawmakers will nix the Medicaid cuts, The Hill’s Emily Brooks, Mychael Schnell and Nathaniel Weixel report that a controversial change to Medicaid may remain in the party’s sweeping bill. House Energy and Commerce Committee Chairman Brett Guthrie (R-Ky.) said the portion of the bill his committee is crafting may include “per capita caps” on people in the Medicaid expansion population.

That message is unlikely to go over well with the House GOP moderates telling Republican leaders they will not walk the plank and vote for Medicaid cuts only to see the Senate strip them out, writes The Hill’s Schnell. GOP leaders in the past have corralled the conference around more conservative pieces of legislation to gain leverage over the upper chamber, cajoling centrists to take politically painful votes, hoping for a more right-leaning final product.

Not this time. 

Moderates are balking, making clear they will not back a more conservative bill that includes poison pill measures — namely drastic changes to Medicaid — as a negotiating tactic.

“That’s the vote we’re trying to avoid,” Rep. Nick LaLota (R-N.Y.) said of the intermediary step. “There is a specific appetite amongst 20 plus Republican members to vote only on something that is real and that could actually become law rather than this more conservative thing that can’t get the vote. … We feel like we’ve done that heavy lifting already, and members like me prefer to only vote on a bill that could actually become law.”

▪ The New York Times: Johnson has said he would hold a vote “quickly” to restore more than $1 billion in funding to Washington, D.C., but ultraconservatives are insisting on attaching limits on abortion and voting rights.

▪ The Hill: House Republicans have yet to strike a deal on how to address the state and local tax, or SALT, deduction cap, a lingering hang-up that has emerged as one of the biggest sticking points.

▪ The Hill: Trump’s recent cryptocurrency dealings are casting a shadow over efforts to pass legislation for the industry at a key moment, as the Senate gears up to vote on a stablecoin bill today.

▪ The Hill: Rep. Alexandria Ocasio-Cortez’s (D-N.Y.) decision to forgo a bid for the top Democratic seat on the House Oversight and Accountability Committee has quickly sparked a series of behind-the-scenes maneuvers to replace Rep. Gerry Connolly (D-Va.), the current ranking member, whenever the seat opens up.

SMART TAKE with NewsNation’s BLAKE BURMAN: 

Supreme Court Chief Justice John Roberts made a rare public appearance in Buffalo, N.Y., where he participated in a fireside chat, reaffirming the importance of judicial independence. During that event, Roberts remained critical of President Trump’s call to impeach federal judges who rule against the administration.  

“In our Constitution, judges and the judiciary are a co-equal branch of government separate from the others with the authority to interpret the Constitution as law and strike down obviously acts of Congress or acts of the president and that innovation doesn’t work if the judiciary is not independent,” Roberts said, adding, “Impeachment is not how you register disagreement with decisions.” 

As a conservative justice appointed by former President George W. Bush, Roberts has shown a willingness to break with his party — a strong reminder of his independence from the Executive Branch. His Wednesday night appearance seemed like a very clear choice: Appear publicly and get before the cameras to take a stand. 

Burman hosts “The Hill” weeknights, 6p/5c on NewsNation.

3 THINGS TO KNOW TODAY:

▪ ​The U.S. and the U.K. reached a trade agreement, Trump will announce at the White House this morning, according to multiple news outlets and confirmation from British officials. Prime Minister Sir Keir Starmer will make an announcement today about a deal to lower tariffs with the U.S.

▪ A most sensitive subject in the White House: Where is Melania? 

▪ The Federal Reserve voted to keep its benchmark interest rate in the same range it’s been since December amid an uncertain economic outlook. “We’re in the right place to wait and see how things evolve,” Chair Jerome Powell said Wednesday.

LEADING THE DAY 

© Associated Press | Ben Curtis