Republicans Rebel Over Trump-IRS Deal, Reconciliation Delayed Again

As part of the president’s new settlement deal with the IRS, the administration is establishing a $1.776 billion “anti-weaponization” fund. But they’re doing so, somehow, without congressional approval. This sidestepping of the legislature has lawmakers on both sides of the aisle upset, and it could cost President Donald Trump whatever remains of his legislative agenda. The Senate was prepared, for example, to take up a revised version of the $72 billion reconciliation on Thursday to fund ICE and CBP. The House was set to do the same on Friday. But those plans fell through as Republicans balked, dropping the idea for now and leaving on their Memorial Day recess with the longer-term funding issue left unresolved.

Giving Congress the Runaround

Acting Attorney General Todd Blanche appeared before Congress on Tuesday, May 19, to announce the Justice Department’s creation of a billion-dollar-plus fund to compensate victims of government weaponization. Note the action taken there: He announced the fund; he didn’t request it. The problem is that, to many, this looks a lot like a presidential slush fund.

“Per the settlement, plaintiffs will receive a formal apology but no monetary payment or damages of any kind. They have agreed, in exchange for the creation of this fund, to drop their pending lawsuit with prejudice, and also withdraw two administrative claims, including for damages resulting from the unlawful raid of Mar-a-Lago and the Russia-collusion hoax,” read the DOJ statement.

Where the money comes from – and who will get it – remains unclear. Chad Pergram summed up the situation for Fox News on Friday:

“In short, President Donald Trump sued his own IRS for leaking his tax returns – along with the filings of several hundred other Americans. Then, Blanche’s own Department of Justice announced that the president essentially settled with himself.”

It has even the Republicans in Congress a bit on edge.

“I realize it’s a lot of money,” Sen. John Kennedy (R-LA) said. “I want to understand where the money comes from. Do we find it in the budget? Do we have to borrow it? There’s just a lot of unanswered questions.”

“What I want to know is how the fund is created and what its purpose is,” Sen. Jerry Moran (R-KS) added. “And I want to know the legality of creating a fund that Congress hasn’t had anything to say about.”

Senate Republicans summoned Blanche back to Capitol Hill on Thursday, May 21, and the meeting was tense. Senators Chuck Grassley of Iowa and Tom Cotton of Arkansas grilled Blanche over the fund and demanded details on plans for transparency and what guardrails might be applied.

Others defended the fund. “I feel comfortable that those who have been wronged by their government should have some sort of redress,” Sen. Eric Schmitt (R-MO) told the press.

Reconciliation Deferred

But the net change in congressional goodwill was clearly negative. Shortly after meeting with Acting AG Blanche, the Senate dismissed for Memorial Day recess rather than take up and pass the reconciliation bill along party lines to fund ICE and CBP, which initially was the plan for the day. House Speaker Mike Johnson (R-LA) dismissed his lawmakers as well, instead of staying in town through Friday to vote on reconciliation. Johnson even canceled a scheduled meeting with the president. Now Congress is out and won’t be back until early June.

The reconciliation bill could – and almost did – clear Congress with just a simple majority in both houses, since it circumvents the need for 60 votes in the upper chamber to nix a filibuster. But it also cues up what’s called a vote-a-rama, a marathon Senate voting session during which there is no limit to the number of amendments that can be introduced. Senators frequently find themselves voting on dozens of back-to-back amendments aimed at rewriting entirely – if not outright killing – the reconciliation bill before them.

It didn’t help that the reconciliation package, which Trump initially said should be “very narrow, targeted, focused, clean, straightforward,” was already complicated this week by the addition of another $1 billion for Secret Service funding and the overhaul of the East Wing. The DOJ fund spurred new fears of amendment votes on the reconciliation bill – and even some Republicans planned to introduce amendments to abolish the fund from the new settlement. Senate Majority Leader John Thune (R-SD) said “it would have been nice” to be consulted on the DOJ fund beforehand – but he called it “water under the bridge now.”

In other words, it’s too late to go back. “You play the hand you’re dealt, and we’ll sort it out from here,” Thune said. “But, you know, obviously it becomes a more complicated and bumpy path than we had hoped for.” Lawmakers return on June 1 and may take up the reconciliation vote then – or perhaps they won’t. Thune seems confident they’ll manage to pass the reconciliation bill soon, even if not as quickly as desired. President Trump wanted it on his desk by June 1, but now it seems that won’t happen. He got his IRS settlement instead.