Washington is abuzz over whether Congress will address President-elect Donald Trump’s ambitious policy agenda in one bill or two. But lawmakers must confront a more important question: How will Trump navigate between those Republicans whose top priority is cutting the size of the federal government and those who quietly worry about the political fallout from slashing popular programs?
The dilemma: While Republican voters favor smaller government in concept, they often back specific programs. For example, a Pew Research survey finds 79% of Trump supporters want smaller government providing fewer services. But two-thirds of all voters and even 40% of Republicans or those leaning Republican say government should provide health care for all.
One Bill Or Two?
For the moment, that conflict is playing out over the tactical one-bill-or-two choice. And Trump’s own ambivalence illustrates the growing problem.
Trump said on his Truth Social platform on January 5 that he wants “one powerful bill” that would extend the Tax Cuts and Jobs Act, enact tax-free tips, boost funding for border security, and create unspecified incentives for fossil fuel production. One that House Speaker Mike Johnson (R-La.) boldly promises to have on Trump’s desk by Memorial Day.
But in a radio interview with Hugh Hewitt the next day, Trump was more ambivalent. He said, “I favor one bill. I also want to get everything passed. And you know, there are some people that don’t necessarily agree with it. So I’m open to that, also. My preference is one big, as I say, one big, beautiful bill. I would prefer one, but… I’m open to either way, as long as we get something passed as quickly as possible.”
Whichever version they choose, Republicans would use the arcane reconciliation process, which allows the Senate to pass a bill with only 50 votes, instead of the 60 which frequently is required.
House Republicans likely also would include an increase in the federal debt limit coupled with major cuts in government spending, which will be needed to pay for at least some of those tax cuts. Extending the TCJA alone would add more than $4 trillion to the federal debt over the next decade.
A Heavy Lift
A massive fiscal package, in one or two bills, would be a heavy lift, not least because of the GOP’s profound intramural disagreement how deeply to reduce spending. Some House Republicans are demanding steep cuts as the non-negotiable price of their support for any 2025 fiscal package.
In December, they reluctantly swallowed a temporary federal government spending bill. But only after Johnson reportedly made a side agreement that would couple a future $1.5 trillion increase in the nation’s borrowing authority with a $2.5 trillion cut in net mandatory spending. Johnson since has said the final numbers are “yet to be determined.”
Because Trump opposes cuts in mandatory programs such as Social Security and since interest on the debt must be paid, targets likely would include safety net programs such as Medicaid and SNAP food assistance (formerly Food Stamps).
Those lawmakers, including House Ways & Means Committee Chair Jason Smith (R-Mo.), are pressing for one massive bill. But the more cautious Senate GOP leadership prefers a quick win on a separate border measure, recognizing that the battle over tax and spending cuts could take most of 2025.
Paying For Tax Cuts
Indeed, two powerful Senate Republicans are looking for ways to avoid coupling tax cuts with big reductions in government spending. Senate Finance Committee Chair Mike Crapo (R-Idaho) says extending the TCJA does not require offsetting tax increases or spending reductions at all, insisting it merely extends current policy.
New Senate Majority Leader John Thune (R-S.D.) says at least some of the cost of the TCJA would be funded by a “growth dividend” though he adds it also would require “significant reductions in spending, particularly in certain areas,” which he has not specified.
Narrow congressional majorities magnify this conflict. For the early part of next year, the Republicans will have only a one-vote majority in the House. The GOP has a slim 53-47 majority in the Senate.
Will Trump Cut Spending?
Trump himself never has shown much enthusiasm for spending cuts, despite his campaign promises to eliminate the deficit and even the debt. In his first term, spending increased from $3.8 trillion in fiscal 2016 to $6.5 trillion in fiscal 2020.
And so far, Trump has provided only limited ideas for funding his ambitious agenda. He’s promised some form of tariffs and repeal of 2022 green energy subsidies, which could pay for a TCJA extension alone but not the TCJA plus his other priorities.
For now, Trump seems to be leaving the work of finding spending reductions to Elon Musk and Vivek Ramaswamy and their unofficial Department of Government Efficiency (DOGE).
Given these complications, it should be no surprise that Trump has been unwilling to firmly commit to legislative tactics. But whether one bill or two, he still will have to navigate treacherous budget waters as he balances his party’s deep fiscal divisions.
Getting Republicans to agree to trillions of dollars in tax cuts will take hard work, but it will be doable. Building consensus on how to pay for them will be much tougher. And until Trump does so, the fate of the TCJA will remain uncertain, no matter how many bills it takes.
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