Larry Kudlow: Congressional spending drama is a lesson the GOP must ‘simplify’

A lesson for the Republican Party: simplify, simplify, simplify, and that’s the theme of the riff.

The most important thing I’ve seen in all this drama of year-end congressional spending and the difficulty of reaching a deal is what this tells us about the difficulty of more than one reconciliation bill next year.

So far, the House has twice failed to reach a deal to avoid a government shutdown.

And avoiding a government shutdown is desirable; Not in economic terms, but in political terms, it could possibly give Senator Chuck Schumer additional power by certifying the presidential election on January 6, and even inaugurating him on January 20.

Schumer Democrats are evil and you never know what will happen if you leave them in charge, even for a couple more weeks.

Now, House Republicans have reached a third continuing resolution agreement, which awaits President Trump’s approval.

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It will look a lot like the short-term deal that was rejected last night. It would postpone the debt ceiling until March 14 and reportedly cut about $2.5 trillion in federal spending over the course of yet-to-be-determined reconciliation bills next year.

But as anyone can clearly see, this relatively simple exercise of extending funding for a couple of weeks has been very difficult, very contentious and very unpredictable.

And I think it’s an early indicator of the potential problems the GOP may encounter next year if it continues to casually believe that it can actually pass multiple reconciliation bills in 2025. They must be fooling themselves.

A recent McLaughlin & Associates poll shows that nearly half of all voters think we are in a recession, and more than four-fifths continue to worry about inflation.

Thirty-five percent of voters say the most important thing for Trump is securing the border, and just behind, 26 percent say continued growth by making Trump’s tax cuts permanent. The economy in general remains the number one issue, far surpassing the border.

And Trump’s Tax Cuts 2.0 are wildly popular: 82% favor ending federal taxes on Social Security income, 71% favor ending federal tip taxes for service workers, 64% favor ending federal taxes on overtime pay for workers and 70% favor ending federal taxes on Social Security income. They favor making Trump’s 2017 tax cuts permanent.

Right now, Trump and his transition team are very popular. His approval rating is well above 50%. He is enjoying an almost unprecedented post-election honeymoon.

But getting back to the legislative strategy that will be so crucial, Trump’s political mandate in the election, and I think Republicans who think it will be easy to pass multiple reconciliation bills are gravely mistaken.

The parliamentary confusion within Republican ranks in recent days, centered on what should be a relatively simple exercise, is a major warning sign that things will get too complicated next year.

Delaying tax cuts would be a big mistake. Delaying tax cuts won’t put extra money in the hands of workers. Delaying tax cuts won’t fatten workers’ wallets. Those are the people who voted for Trump in the battleground states and gave him a landslide victory.

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The Republican Party has winning issues, such as closing the border; cut taxes; and drill, baby, drill; and cut back on the regulatory state. Group them all together and do it as soon as possible.

And be realistic about the nearly impossible problems several massive reconciliation bills will create.

A source close to President Trump says he wants a big, beautiful bill. As always, you are right.

This article is adapted from Larry Kudlow’s opening commentary in the December 20, 2024 issue of “Kudlow.”