As the new year begins, Republicans are preparing to reshape the federal government – and learning that doing so might be easier said than done.
On January 3, the new Congress convened, with the GOP taking control of the U.S. Senate and maintaining their thin House majority. The thinness of that majority became clear right away as Rep. Mike Johnson (R-LA) won the Speaker’s gavel by a single vote. In fact, he initially appeared to be going down to defeat as three House Republicans voted against him. Only calls from President-elect Trump and lots or arm-twisting prompted two of the three to change their votes and seal Johnson’s victory.
Things will not get easier for House Republicans, as their already-low numbers will shrink even more once two representatives leave for jobs in the Trump administration. (They already are down one, following the December resignation of former Rep. and short-lived attorney-general nominee Matt Gaetz (R-FL)). Although Republicans are likely to hold onto all three seats in special elections this spring, this leaves them with a measly one-vote advantage over House Democrats for the next few months.
Republicans have a slightly better margin in the Senate, where they enjoy a 53-47 majority over Democrats. But their numbers still mean that Democrats can block a lot of GOP legislation with the filibuster, which requires 60 votes to overcome.
That’s why Republicans are looking to use a special process called “reconciliation” to advance their campaign agenda. Reconciliation allows Congress to pass provisions that raise or reduce spending or taxes without having to overcome a filibuster; i.e., without needing support from the minority party. (That is the same process the Dems used to pass the Inflation Reduction Act in 2022 and parts of Obamacare in 2010 over GOP opposition.)
Republicans are planning to use the reconciliation process to advance three of their biggest priorities: renewing and expanding the 2017 Trump tax cuts which expire at the end of the year; enacting tougher border security and military measures; and promoting domestic energy production. In order to offset the costs of these provisions, they are considering repeal of parts of the Inflation Reduction Act, including clean energy tax incentives; reduced spending on health care and other social programs; cancellation President Biden’s student debt forgiveness plans; and other programs.
Reconciliation will enable the GOP to move forward even if Democrats unanimously oppose the legislation. But it is far from a given that all Republicans will be on board with such a sprawling bill. Some northeastern Republicans might not back the tax provisions if they don’t restore the federal deduction for state and local taxes, which disproportionately hurts their constituents. A handful of Republicans support some of the clean energy provisions of the IRA. And there are ultra-conservative Republicans who will oppose the plan because it does too little to reduce the deficit, and may even exacerbate it. Since only a handful of House Republicans could sink a bill, GOP leaders will have to thread a very fine needle.
To make matters more complicated, Congress will face two other big deadlines in the midst of all this. Short-term government funding expires on March 14; unless Congress passes its regular appropriations bills or another short-term bill, agencies will shut down. And as early as this spring, the federal government will breach the debt ceiling, the statutory limit on how much it can borrow. Unless it raises or suspends the debt ceiling, the government could do into an unprecedented default. The challenge of avoiding such a scenario became clear in December when, despite the President-elect’s demands that Congress raise the debt ceiling, 38 House Republicans opposed the bill. Some GOP leaders want to add a debt ceiling increase into the reconciliation bill – which could lead to more defections among Republicans.
So How Does This Affect CRM?
Of course, any government shutdown or – worse – a debt default would have deleterious consequences on the broader economy, which is bad for everyone.
The impacts of the broader reconciliation bill are harder to determine without the details. On the plus side, extension or expansion of the business tax cuts will help firms’ bottom line. In particular, an extension of the deduction of pass-through business income will benefit firms organized as partnerships or S corps. Meanwhile, increased oil and gas extraction could mean more Section 106 reviews (although elimination of renewable energy incentives could cancel that out).
A big unknown is the extent to which Republicans may try to rewrite permitting laws as part of their effort. For the most part, such changes cannot be part of a reconciliation bill because they do not directly impact federal spending. But there are plenty of ways that Congress could make its mark on environmental and cultural resource laws. Stay tuned.
In fact, “stay tuned” could very well be the mantra for the next few months, as Republicans feel urgency to take action on their campaign promises while holding their narrow majority in line, keeping then government running, and dealing with whatever unexpected events come out of left field (who had “possible war with Denmark over Greenland” on their 2025 bingo cards?).
Advocating for CRM
Whatever happens, ACRA continues to work with its allies on Capitol Hill and in the preservation community to advocate for policies that support cultural resources management and historic preservation.
A major part of that effort will be 2025 National Historic Preservation Advocacy Week, when preservation advocates and professionals from across the country will head to Capitol Hill to meet with their elected representatives. The Week also provides opportunities to hear from a variety of preservation and policy professionals on issues affecting historic preservation and enjoy exclusive local tours and networking opportunities.
With so much uncertainty on the policy landscape, it’s more important than ever that the preservation community speaks with one voice. By joining forces with Preservation Action in 2025, ACRA members will be able to get even more out of the experience.
Learn more and register today here.