US Republicans eye two-step Trump legislative agenda

WASHINGTON (Reuters) -Republicans in the U.S. Congress are discussing a two-step plan to push ahead on President-elect Donald Trump's agenda when they take control of both chambers next year, potentially starting with border security, energy and defense before turning to tax cuts.

Incoming Senate Majority Leader John Thune, whose Republicans will hold a 53-47 majority, laid out a plan in a closed-door party meeting on Tuesday that included a call from Trump himself. It aims to use a parliamentary maneuver to bypass the chamber's "filibuster" rule that requires 60 senators to agree to advance most legislation.

According to the Senate plan, the first bill would focus on Trump's agenda for border security, energy deregulation and defense spending, while the second would extend tax cuts from the 2017 Tax Cuts and Jobs Act passed during the first Trump presidency, which are due to expire next year.

Thune told reporters that the plan amounted to "options, all of which our members are considering."

To enact Trump's agenda, the Senate will have to work closely with the president-elect and the House of Representatives, which is expected to have a razor-thin Republican majority.

"We were always planning to do reconciliation in two packages. So we're discussing right now how to allocate the various provisions, and we're making those decisions over the next couple of days," said House Speaker Mike Johnson, who joined Senate Republicans at their meeting.

"There are different ideas on what to put in the first package and what in the second, and we're trying to build consensus around those ideas," Johnson told reporters.

The speaker also said that he believes Congress in coming weeks will pursue a continuing resolution, or CR, that would fund federal agencies into March. Current funding is set to expire on Dec. 20.

Before moving a first reconciliation bill, the House and Senate will need to agree on a budget resolution to unlock the "reconciliation" tool they plan to use to bypass the filibuster. Aides said senators hope to do that by the end of January and then move quickly to complete the first bill by March 31.

"We have the trifecta for two years. About 18 months is all we're really going to have to really get things done," Republican Senator Mike Rounds told reporters.

Democrats also leaned heavily on reconciliation to pass legislation when they held control of both chambers during the first two years of President Joe Biden's term.

Republican Senator Rand Paul, a fiscal hawk, raised concerns about the plan's cost.

"This is not a fiscally conservative notion," Paul said. "So at this point, I'm not for it, unless there are significant spending cuts attached."

Extending Trump's tax cuts for individuals and small businesses will add $4 trillion to the current $36 trillion in total U.S. debt over 10 years.

Trump also promised voters generous new tax breaks, including ending taxes on Social Security, overtime and tip income and restoring deductions for car loan interest.

The tab is likely to reach $7.75 trillion above the CBO baseline over 10 years, according to the Committee for a Responsible Federal Budget, a non-partisan fiscal watchdog group.

(Reporting by David Morgan; Editing by Scott Malone, Stephen Coates and Shri Navaratnam)