House Republicans want to give reconciliation another go - Punchbowl News

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[House Republicans will try to pursue a second reconciliation bill]

*Happy Friday morning. *

Gonzales retiring. *Embattled GOP Rep. *Tony Gonzales *(Texas) announced late Thursday night that he won’t seek reelection. This came after Speaker *Mike Johnson and House GOP leaders called on Gonzales to end his reelection campaign. Gonzales has publicly admitted to having an extramarital affair with a staffer who died by suicide last year. The three-term lawmaker is under Ethics Committee investigation over that relationship.

Gonzales’ decision means Brandon Herrera, a controversial pro-gun rights activist who goes by “The AKGuy,” is the GOP nominee in Texas’ 23rd District. Much more in the Midday edition.

News*: *Are you ready for another Big Beautiful Bill?

Mike Johnson is.

*House Republican leaders *decided at their Florida retreat last weekend that they’re going to pursue a second reconciliation package this year, according to multiple sources who attended the gathering.

*The only problem *is they have no idea what will go in the package or how they’re going to pay for it.

Johnson is **the most optimistic person **— some would say unrealistic — in the House Republican leadership. He’s been on a bit of an island in his desire to draft and pass a second reconciliation package.

The rest of the House GOP leadership is skeptical that the Republican Conference has the political will — or discipline — to cobble together another such bill. To be fair, we’re also skeptical given Republicans’ one-vote cushion in the House. There’s also serious doubt in the Senate that this can happen.

*The prevailing wisdom *in some corners of the GOP leadership is that Republicans should focus on small-bore bills that could help their endangered incumbents.

But with eight months until Election Day, Johnson doesn’t want to give up on a second fast-track bill, seeing it as a wasted opportunity with so much time left in this Congress. Much of next week’s** **House Republican retreat in Doral, Fla., will be focused on trying to find consensus on this topic.

*“We’ll finalize *our Venn diagram and see what fits in the middle,” Johnson said in an interview Thursday. “I’ve got some ideas but I don’t want to get out in front of that conversation.”

Hurdles. The big problem** **here is that House GOP conservatives would almost certainly demand that every penny of a reconciliation package be offset by spending cuts. And the GOP leadership has no clue if or how they will find cuts that’ll pass muster with House Republican moderates.

“The offsets *are the areas that are hard to get agreement,” House Majority Leader *Steve Scalise told us. “And we don’t have any agreement on those yet. But we’re trying to find consensus amongst our members.”

Left unsaid here *by nearly everyone in GOP circles is that the OBBB didn’t give Republicans the political boost they wanted or needed. It’s so far underwater that President *Donald Trump calls it by another name instead.

In this case, **House Republicans **seem to be reverse engineering the process. Instead of agreeing on policies and then finding spending cuts to offset them, the GOP leadership is signaling they’ll look to find offsets first and then decide what kind of narrow policies can fit within that framework.

*House Budget Committee Chair Jodey Arrington *(R-Texas), a big booster of a reconciliation redux, took his argument about another bill to the Elected Leadership Committee’s retreat at Pier 66 in Fort Lauderdale, Fla., last weekend. He’ll also speak next week at the retreat at Trump National Doral near Miami.

In an interview Thursday, **Arrington made the case that if Trump **wants more money for the Pentagon, it may be better to pass that under reconciliation, which only needs 51 votes in the Senate.

*Arrington, *a red-district Republican who isn’t running for re-election, sees political upsides on a second reconciliation despite the difficulties in finding agreement.

*“We’re going to do *farm bills, FISA — all the things that are regular business that are not going to move the needle,” Arrington said of the rest of the 119th Congress. “They have to be done. They’re important. They’re not going to move the needle in November, and they’re not going to substantially change the things that have been broken over the last four years. What we can put in reconciliation will substantially change that. It will motivate our base.”

*What could go in a bill. *GOP moderates would love to do something about health care costs, but it would be very challenging to get agreement on that among Republicans. For example, the Trump administration wants Congress to address “most favored nation” drug pricing efforts, but that policy has GOP skeptics in the House and Senate.

Addressing fraud in government programs sounds good to Republicans, but some of their proposals wouldn’t meet reconciliation rules. Others might cut spending so much that they spook moderates.

Scalise said one option would be providing tax credits for first-time homebuyers, playing into interest from Trump and Republican moderates in affordable housing legislation. But there’s also a lot of GOP disbelief that tax changes could be part of a second package after so much went into OBBB.

*Trying to *address tariffs would probably kill the whole project because the issue divides Republicans as is.

If Trump is interested in new funding — like money for the Pentagon amid the war with Iran or to address the Department of Homeland Security shutdown — that could make some sense. But again, House Republicans would likely have to offset the full cost.

The case for skepticism. *Notably, House Ways and Means Committee Chair *Jason Smith (R-Mo.) is an outspoken skeptic of the reconciliation 2.0 push. Smith told us that rather than starting with a difficult budget resolution process, House Republicans should try first to unite behind a bill and pass it using the typical process, then see what the Senate says.

*“I’ve said it *all along that we need one big reconciliation [bill] because I didn’t see a path that there was enough juice for two, and I still stand by that,” Smith said.

*Fly Out Day! *Rep. *Ro Khanna *(D-Calif.) was on Fly Out Day this week. Hear what he has to say about the Epstein Files, the war in Iran and why he’s stockpiling campaign cash. Watch here.

– Jake Sherman and Laura Weiss

PRESENTED BY AMAZON

Sam joined Amazon in 2022. With fully-paid parental leave, she was able to take the maternity leave she needed without missing a beat.

*“My maternity leave was so long, and it did not hurt my career at all,” she said. Since then, she has been promoted twice and continues to find new paths for career growth. *

Amazon empowers employees to thrive. Learn more.

[Go ahead! Waters wants the question]

Rep. Maxine Waters (D-Calif.) knows you have questions about her age. Her health. Her ability to lead the House Financial Services Committee if Democrats take control of the chamber after the midterms.

*Waters — *first elected to Congress in 1990 — says bring it on.

*“I am open *to evaluation and scrutiny by [anybody] and everybody about my work, my leadership, my energy and my health,” Waters told us in her Rayburn office. “That’s all I can tell you.”

We sat down with the 87-year-old California Democrat on Wednesday to talk through her plan to return as chair if Democrats win the majority. That’s the first challenge.

Seniority. Waters’ pitch to lead the committee comes at a tenuous time for older Democrats.

The party has been going through a reckoning over age since former President *Joe Biden’s *disastrous reelection campaign. House Democrats ousted three longtime committee leaders at the start of this Congress over concerns about their fitness for the job — a move that would’ve been unheard of in the caucus just a few years before.

The dynamics have been especially charged among members of the powerful Congressional Black Caucus, where leaders have long viewed seniority as a crucial way to preserve the power of minority lawmakers.

*Waters said *she recognizes that viewpoints have changed. Committee races come down to “your ability to run a good campaign, to raise money, to be articulate on the subject and your relationships with other members of the caucus,” Waters said. “Not just seniority.”

*So we asked Waters: *Is it time for Democrats to embrace term limits for committee leadership roles? “I don’t think very much about term limits,” Waters replied.

“I allow limits to be talked about by the people. They talk about limits in government, period, at every level of government. That kind of spills over. But I’m not into really thinking a lot about limits for chairs or anything like that.”

*There’s a lot *of history here. Waters invoked her experience coming up through the CBC and how former leaders talked about seniority.

“Back in the day, if you didn’t have seniority, you couldn’t move ahead,” Waters said. “They told us, you need seniority because you’re never gonna win the beauty contest, OK?”

Financial services.** **Several other committees have seen longtime Democratic leaders toppled in recent years — but not the Financial Services panel. Waters has served so long it’s far from clear who might succeed her any time soon.

We asked Waters if she anticipated any challengers next year. “I’ve not heard about it,” Waters said. “Have you?” Not yet, we said.

The former HFSC chair also said her progressive record on the committee spoke for itself.

*“I had the blessing *to work with Barney Frank and some very smart people, and I was on the conference committee during Dodd-Frank,” Waters said. “I’ve learned an awful lot. And there’s an awful lot to learn when you’re working in financial services.”

*Retirement. *We wanted to know how Waters is thinking about retirement in general. If not soon, when? How would Waters know it was time to go?

*“Right now, *I am very concerned about the government, period. I’m very concerned about the future of this country if, in fact, the wrong people are heading this country,” Waters said.

*We told Waters *it sounded like she wasn’t thinking about retirement at all.

“I’m thinking about the future, and I’m thinking about who is in the leadership of the government.” Waters said.

– Brendan Pedersen

GOLDEN STATE UPDATE

[California Dems fret about governor’s race]

*California House Democrats *are concerned that their party’s inability to cull a crowded gubernatorial field could lead to Republicans taking the top two slots in the nonpartisan primary.

*After a string *of polls showing the GOP contenders — *Chad Bianco *and *Steve Hilton *— hovering around the top two, the California Democratic Party chair issued a plea for low-polling Democrats to drop out.

Californians in Congress **agree that the glut of Democratic candidates could allow Bianco and Hilton to sneak through to the general with only around a third **of the total vote.

“There’s going to come a time where if you don’t have the resources to communicate and you’re stuck in that bottom tier, you’re doing more harm than good,” House Democratic Caucus Chair Pete Aguilar, **the highest-ranking Hill Democrat from California, **told us.

“If you’re at 1%, if you’re at 3%, what are you doing?” Rep. *Norma Torres *(D-Calif.) added.

“*It’s simple math,” *Rep. *Mike Levin *(D-Calif.) said. “We need consolidation.”

Where things stand. **Democrats concede that the current state of the race to succeed Gov. **Gavin Newsom is a mess. *Arnold Schwarzenegger, *who left office in 2011, was the state’s last Republican governor.

An increasing number of Golden State Democrats are coalescing around Rep. *Eric Swalwell *(Calif.), who is the top Democrat in many polls. Former Rep. *Katie Porter *(D-Calif.) and billionaire *Tom Steyer *are seen as the other top Democratic contenders.

That’s not all, **however. *Former HHS Secretary *Xavier Becerra, *San Jose Mayor *Matt Mahan, *former state Controller *Betty Yee, *former Los Angeles Mayor *Antonio Villaraigosa *and state Superintendent of Public Instruction *Tony Thurmond **are also running. All of them are polling in the low single digits.

The crowded field *creates a dynamic where Hilton and Bianco narrowly lead the RealClearPolitics polling average, at *15% *and *14% *respectively. Swalwell is in third with *12% average support, followed by Porter at 11% and Steyer at 9%.

“It would not represent the ultimate will of the voters if we have two Republicans and no Democrats,” Rep. *George Whitesides *(D-Calif.) said. “Folks who are in the race need to look carefully at their real chances.”

*Swalwell’s take. *Swalwell’s campaign has the backing of Sen. *Adam Schiff *(D-Calif.) and ten other California House Democrats. Swalwell told us Wednesday “it’s an individual decision for everyone” when asked if lower-polling Democrats should exit the race, before noting one former gubernatorial candidate has already endorsed Swalwell’s bid.

“I’m focused on where we are on the top, growing our lead and creating separation,” Swalwell said.

*On Thursday, *former state Assemblymember *Ian Calderon *dropped out of the contest to back Swalwell.

— Max Cohen

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Amazon offers hourly employees a competitive salary, benefits starting day one, and free skills training, giving employees opportunities for growth and the support to stay.

CABINET SHAKE-UP

[DHS spotlight turns to Mullin]

Sen. Markwayne Mullin (R-Okla.),** one of President **Donald Trump’s closest allies, is poised to take over the department that’s been causing Trump the biggest problems.

As the president’s pick to lead the Department of Homeland Security in the wake of Kristi Noem’s ousting, Mullin is set up to get his GOP colleagues’ support for the job. But when Mullin does, he’ll inherit a political mess at DHS.

The uproar over DHS’s conduct since federal agents killed Renee Good and Alex Pretti in Minneapolis this January will hang over Mullin’s confirmation process. Democrats will press very hard for information from the FBI investigations into these deaths.

Mullin may have an easier time navigating the situation than an outside pick for DHS. As a sitting senator, Mullin will receive some level of deference from colleagues. Most Republican senators** and one Democrat, Sen. **John Fetterman (D-Pa.), were quick to praise Mullin and endorse his nomination.

But it’s likely that most Senate Democrats will oppose Mullin given their ongoing fight over ICE’s operations. There’s pressure from the Democratic base for senators to push back on Trump however they can, especially on his immigration crackdown. This could make the confirmation process more fraught than usual.

“The problems at ICE transcend any one individual,” Senate Minority Leader Chuck Schumer said. “We’ve got to end the violence and rein in ICE.”

The funding fight.** **Meanwhile the DHS shutdown is on track to enter its third week with no signs of progress in talks. Noem’s firing isn’t changing Democrats’ resolve to get ICE reforms in law in exchange for funding DHS.

— Laura Weiss and John Bresnahan

AND THERE’S MORE

*News: *The White House is urging lawmakers to include union-backed rail safety legislation in any upcoming infrastructure or transportation package, according to a memo sent Thursday to transportation committees.

The Railway Safety Act, *originally sponsored by Vice President *JD Vance when he was in the Senate, would address safety issues that led to the train derailment in East Palestine, Ohio in 2023. Major rail and transportation unions also support the bipartisan bill.

News:** The Congressional Progressive Caucus raised more than $700,000 Thursday night at a fundraiser for the DCCC *at Rose’s Luxury. In attendance: House Minority Leader *Hakeem Jeffries, *DCCC Chair *Suzan DelBene, *CPC Chair *Greg Casar *and Reps. *Maxwell Frost *(D-Fla.), *Sarah McBride *(D-Del.) and *Morgan McGarvey **(D-Ky.).

On the air.** *The Senate Opportunity Fund, a nonprofit affiliated with Senate Majority Whip *John Barrasso, *is launching a $1 million digital, streaming and radio ad campaign boosting Sen. * Jon Husted **(R-Ohio) and former Rep.

(R-Mich.), who is running for Senate.

Mike RogersThe Money Game. **Dwayne Romero, *a Democrat running to unseat GOP Rep. *Jeff Hurd **(Colo.), raised $400,000 in the first three days of his campaign.

– Ally Mutnick, Samantha Handler and John Bresnahan

MOMENTS

ALL TIMES EASTERN

2:30 p.m.

President Donald Trump *meets with Defense Secretary *Pete Hegseth.

3:30 p.m.

Trump meets with Interior Secretary Doug Burgum.

4 p.m.

Trump participates in a Saving College Sports roundtable, before departing the White House en route to Miami, Fla.

CLIPS** **

NYT

“As Trump Out-Putins Putin, Russia’s Global Influence Erodes”

– Paul Sonne in Berlin

Bloomberg

“Hegseth Says the US Has No Shortage of Munitions for Iran War”

– Courtney McBride and Roxana Tiron

WSJ

“Anthropic Says It Will Fight New Pentagon Move as CEO Apologizes for Leaked Memo”

– Amrith Ramkumar

FT

“Qatar warns war will force Gulf to stop energy exports within weeks”

– Andrew England and Malcolm Moore in London

PRESENTED BY AMAZON

With an average hourly wage of over $23, comprehensive benefits starting on day one, and free skills training, Amazon ensures employees have the opportunity to grow and the support to stay.

Since starting in an Amazon fulfillment center in 2022, Sam has been promoted twice and continues to find new career growth opportunities. “I honestly couldn’t even begin to guess what’s next because I’m so open and there are so many opportunities. But I will definitely be with Amazon long-term,” she said.

Editorial photos provided by Getty Images. Political ads courtesy of AdImpact.

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