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Lawmakers Plan Limited Reconciliation 2.0 Package, Health and Tax Priorities Unlikely

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U.S. Capitol building under blue skyThe House and Senate remain on their two-week long recess, due back next week to begin the process of funding the Department of Homeland Security, (DHS) potentially through a budget reconciliation package. At this time, it appears that any reconciliation bill will be narrowly tailored to DHS and possibly military operations and will not be a catch-all of legislative priorities. President Trump has said he wants a final package for his consideration by June 1.

Senate Republicans are planning to propose a limited funding package for ICE and CBP. The first step would be for each chamber to pass a budget resolution with instructions for how to proceed in terms of policy priorities and total spending. This package would likely need to advance to the floor by the end of April, for the committees to begin the legislative work and for both chambers to then pass an identical reconciliation bill to meet the White House’s deadline.

The limited nature of this package means that virtually all other legislative priorities that Republicans have sought to include in a second reconciliation package would not be included. Among these are Argentum priorities for tax policies to help more Americans plan and save for their long-term care expenses, such as the Credit for Caring Act and extending tax-favorability of 529 plans to be used for long-term care expenses. There are limited vehicles to advance such legislation, with a year-end omnibus package being the next most likely.

If the reconciliation package is limited to just DHS priorities, there is a very slim chance for Congressional Republicans to advance a third reconciliation bill after October 1, which could encapsulate many of their remaining priorities, particularly if there is a change in the balance of power in the House and Senate as a result of the November elections. Budget committees are already considering options for a third package. A third, or even the second reconciliation package, are far from certain for passage due to the narrow majorities for Republicans in both chambers.

Argentum remains focused on advancing our priorities through any legislative vehicle that is moving, and we are working closely with appropriators on opportunities with the upcoming Fiscal Year 2027 spending package.