GOP panel unveils outline for second reconciliation bill

The Republican Study Committee, the House's largest conservative caucus, released a framework for a second reconciliation bill Tuesday that leaders hope will be pushed through Congress this year while Republicans still enjoy a narrow majority.

The "Making the American Dream Affordable Again" roadmap makes no mention of tax-exempt bonds, an item closely watched by the municipal bond market in any tax vehicle and that was included in a draft framework for last year's reconciliation bill.

The proposal features a number of tax increases and tax cuts, including a repeal of the estate tax, at a cost of $282 billion, and eliminating capital gains for a home seller if the home is sold to a first-time buyer. It would create several tax-advantaged accounts, including one for health insurance subsidies and one for disaster recovery expenses.

On the policy side, the document targets so-called sanctuary cities that don't comply with federal immigration law by cutting off housing and transportation funds and rewards local governments that do cooperate with additional dollars.

President Trump's executive orders would be made permanent under the bill.

"There's three major things that I think are threatening the American dream right now: housing costs, health care costs and energy costs," said Rep. August Pfluger, R-Texas, the RSC's chair, at a Tuesday news conference. "We've got to get this done. We know we have a narrow window of time."

The committee created an AI tool trained to generate legislation that's already compliant with the Byrd Rule to avoid some of the conflicts that stalled the first reconciliation package.

The House's largest conservative caucus, the RSC has roughly 190 members.

It's unclear how much appetite Republican leaders have to tackle a second reconciliation bill this year. House Speaker Mike Johnson, R-La., said Monday that he would like to see another reconciliation bill but offered no specifics. Senate Majority Leader Sen. John Thune, R-S.D., is seen as less supportive.

"We hold razor-thin majorities in both chambers with no guarantee they survive the midterms," Pfluger wrote Tuesday in a column in The Hill. The committee worked on the document for the last six months after meeting with "policy experts, industry leaders and specialists," Pfluger said. "What remains is the political will to act."

The roadmap proposes more than $1.6 trillion in reductions and would trim $1 trillion from the deficit, according to the committee. Nearly 70% of the proposals have already been introduced as bills or passed by House Republicans.

A $1 billion 'Safe Cities Fund' would be created to reward cities and municipalities "working in good faith" with the Trump administration "to reduce crime rates, deport illegal aliens, and that permit the National Guard to assist in public safety initiatives."

Federal funds would be blocked from going to states that allow illegal immigrants to get government healthcare benefits and Housing and Urban Development funding would be halted for so-called sanctuary jurisdictions that "prevent or impede federal law enforcement operations and cities that impose rent control policies."

The framework also proposes limiting or withholding federal transportation funding to states and cities granting driver's licenses to illegal aliens, and to sanctuary jurisdictions "violating federal law and undermining the president's effort to secure the border," for an estimated $76.3 billion in savings.