During markup on the House budget resolution on February 13, 2025, Rep. Lloyd Smucker (R-PA-11) offered an amendment providing for an “Adjustment for Spending Cuts Of At Least $2 Trillion.”
What Does the Deficit Reduction Failsafe Amendment Do?
The Smucker failsafe amendment promotes responsible deficit reduction as a part of the reconciliation process by establishing failsafe triggers to enforce the policy goals of the budget resolution.
Sec. 4002 of the
budget resolution is a non-binding policy statement that:
“It is the goal of this concurrent resolution to reduce mandatory spending by $2 trillion over the budget window. If the combined deficit reduction provided by authorizing committees is below this target, it is the policy of the Committee on the Budget of the House that the instruction provided to the Committee on Ways and Means of the House should be reduced by a commensurate amount to offset the difference.”
The Smucker amendment adds a new Section 3002 that makes this policy statement enforceable in the budget resolution through failsafe triggers.
How Does the Failsafe Work?
The amendment includes two failsafe triggers that would adjust on a
dollar-for-dollar basis the levels and allocations in the budget resolution, including the reconciliation instruction for the Committee on Ways and Means, based on the ability of the other House committees to meet the $2 trillion deficit reduction goal.
Deficit Reduction Less than the $2 Trillion Goal
If the House committees charged with reducing the deficit in the reconciliation bill
fail to achieve $2 trillion of net deficit reduction over the FY 2025-2034 period, then the Chair of the Committee on the Budget in the House shall
reduce:
- The Committee on Ways and Means $4.5 trillion reconciliation instruction,
- Other allocations, aggregates, and levels in the budget resolution
by an amount equal to the deficit reduction shortfall under $2 trillion.
Therefore, if the House reconciliation bill only achieves the bare minimum $1.5 trillion of deficit reduction required by the reconciliation instructions ($500 billion less than the expressed policy goal), then the Ways and Means reconciliation instruction would be to increase the deficit by no more than $4 trillion (equivalent to the $500 billion shortfall).
Deficit Reduction Greater than the $2 Trillion Goal
If the House committees charged with reducing the deficit in the reconciliation bill
exceed the $2 trillion of net deficit reduction over the FY 2025-2034 period, then the Chair of the Committee on the Budget in the House shall
increase:
- The Committee on Ways and Means $4.5 trillion reconciliation instruction,
- Other allocations, aggregates, and levels in the budget resolution
by an amount equal to the deficit reduction above $2 trillion.
This allows the reconciliation bill to achieve both more savings and tax reform on an equivalent dollar-for-dollar basis.
Impact on Committee Instructions
The Smucker failsafe amendment does
not change specific committees’ instructions on deficit reduction in the underlying text. It addresses
net deficit reduction across the produced reconciliation bill. These additional deficit reduction dollars could be spread across multiple instructed committees.
The amendment builds on the policy goals in the underlying House budget resolution, incentivizing Congress not only to produce a pro-growth, pro-opportunity budget, but also one that is sustainable.
What Are the Reconciliation Instructions in the House Budget?
The House budget resolution provides
reconciliation instructions to 11 House committees.
The Committees on Armed Services, Homeland Security, and Judiciary are instructed to increase the deficit by no more than a combined $300 billion, to enable them to make needed investments in national and border security. The Committee on Ways and Means is instructed to increase the deficit by no more than $4.5 trillion, to enable them to extend and expand the 2017 tax cuts.
The Committees on Agriculture, Education and Workforce, Energy and Commerce, Financial Services, Natural Resources, Oversight and Government Reform, and Transportation and Infrastructure are instructed to reduce the deficit by not less than a combined $1.502 trillion.
How Does the Amendment Impact Extending the Trump Tax Cuts?
Preserving and expanding the 2017 tax cuts is a
vital priority for reconciliation. Cutting spending and building upon the Trump tax cuts – on top of the unprecedented deregulation by the Trump Administration – will foster the next Golden Age of America.
The
Congressional Budget Office estimated on a static basis that extending the expiring individual, small business, investment, and death tax provisions of the TCJA would increase the deficit by $3.973 trillion over the FY 2025–2034 period, relative to the official CBO baseline. This estimate did not include dynamic scoring feedback.
Furthermore, the Ways and Means Committee can also continue the
important work of tax reform to clean out harmful and wasteful loopholes in the tax code, such as repealing the nearly $700 billion of
green energy tax subsidies from the Inflation Reduction Act (IRA).
What Is a Reserve Fund?
Reserve funds are written into the budget resolution as a tool for the House and Senate Budget Committee Chairmen to revise budgetary levels after adoption of the budget resolution, if certain conditions are met. They are ultimately tools to allow for flexibility in the legislative process. Often, reserve funds are intended to facilitate passage of legislation for a specific policy purpose.
