Two significant developments broke late yesterday, starting with the approval of a Republican budget resolution out of the House Budget Committee on a 22-14 party-line vote. The budget makes significant cuts to discretionary programs favored by Democrats and outlines reconciliation instructions for Republicans to pursue a comprehensive tax reform package.

With the Republican ‘repeal and replace’ effort on life support, lawmakers are headed back to the drawing board on health care and Senate Democrats are reaching out to encourage the majority part to engage in bipartisan conversations. It is unclear how Republican leadership intends to move forward, but it is evident that other priorities are likely to be considered in the meantime.

The Republican effort to repeal and replace the Affordable Care Act (ACA) suffered a fatal blow last night after Sens. Mike Lee (R-AZ) and Jerry Moran (R-KS) became the third and fourth Republicans to announce they would vote against the motion to proceed the revised Better Care Reconciliation Act (BCRA), with Senate Majority Leader Mitch McConnell (R-KY) saying that the effort to “repeal and immediately replace will not be successful.” Instead, Leader McConnell aims to bring up the 2015 ACA repeal bill — which would more fully dismantle the ACA after a two year period — as the first amendment to the House-passed American Health Care Act (AHCA). While Sen. Susan Collins (R-ME) was the only Republican senator to oppose that effort in 2015, many moderates will now face a more difficult decision given that the legislation is no longer inevitably destined for former President Barack Obama’s veto pen.

Senate Majority Leader Mitch McConnell (R-KY) had originally intended to make another pass at bringing the Better Care Reconciliation Act (BCRA) to the Senate floor this week, but those plans have been derailed after the office of Sen. John McCain (R-AZ) announced the lawmaker had surgery on Friday to remove a blood clot above his left eye, and that he will spend a week recovering in Arizona. It is unclear when Sen. McCain — who was announced as ‘undecided’ on the bill, but expected to ultimately vote in favor — will return to Washington and it is unlikely that Leader McConnell will be able to hold a successful vote in his absence. While the recovery time could be as short as a week, Republican leadership is waiting on news out of Arizona before committing to a new timeline on floor consideration. Importantly, the delay means that the Congressional Budget Office (CBO) will likely be able to complete its analysis of the revised bill before the legislation moves to the Senate floor, although Republicans may still elect to use a friendlier analysis from the Department of Health and Human Services (HHS) and Office of Management and Budget (OMB) rather than the nonpartisan CBO.

The legislative text to the latest version of the Better Care Reconciliation Act (BCRA) was released yesterday, and Republican leadership has begun to whip votes ahead of the legislation’s anticipated floor consideration next week. Two Republican senators — Sens. Susan Collins (R-ME) and Rand Paul (R-KY) — have already announced that they will vote against a motion to proceed to the bill, meaning that a single additional Republican defection would be enough to prevent the legislation from moving forward. The vote on the motion to proceed is likely to be the crucial test as most observers expect Majority Leader Mitch McConnell (R-KY) to be able to coerce and convince 50 Republicans to vote in favor at the end of the amendment process. Beyond Sens. Collins and Paul, the most likely defectors are Sens. Dean Heller (R-AZ), Lisa Murkowski (R-AK), Shelley Moore Capito (R-WV), Rob Portman (R-OH), and Mike Lee (R-UT). Notably, one more definitive defection could lead to more than a dozen other senators voicing opposition to the bill — but most are wary of becoming the deciding vote to sink the bill.

A new version of the Senate’s Better Care Reconciliation Act (BCRA) is expected to be released today, likely after a scheduled meeting of the full Senate Republican caucus this morning on Capitol Hill. Leaked details of the negotiations suggest that the bill’s significant Medicaid cuts will largely remain intact despite the concerns of moderate Republicans — such as Sens. Susan Collins (R-ME) and Lisa Murkowski (R-AK) — but Senate Majority Leader Mitch McConnell (R-KY) will have a significant pool of funds that can be used for specific provisions targeted at winning over skeptical Republicans. Leader McConnell has told senators that they will have a chance to amend the bill on the Senate floor, although many rank-and-file members are skeptical of that process given that they believe a manager’s amendment at the end of the floor process will likely constitute the final legislation.

At a lunch meeting with the Republican caucus yesterday, Senate Majority Leader Mitch McConnell (R-KY) announced that the Senate will stay in session through the first two weeks of August in order to make further progress on their legislative priorities, most notably the ongoing effort to repeal and replace the Affordable Care Act (ACA). Leader McConnell said that the extended session, now due to end on Aug. 14, will give the Senate more time to work on the Better Care Reconciliation Act (BCRA), as well as the annual National Defense Authorization Act (NDAA), and clearing the backlog of presidential nominations that McConnell claims have been “mindlessly stalled by Democrats.” Republican leaders are still expected to release a revised health care package tomorrow, with the aim of holding a vote next week, but it is unclear whether the significant divides within the party can be resolved within that timeframe.

Congress returns to full strength today as the House will reconvene for the first time since last week’s July 4 recess. Washington’s attention, however, remains fixed upon the Senate, where Republicans are beginning to piece together an anticipated timeline for the next push in passing the Better Care Reconciliation Act (BCRA) — the Senate plan to repeal and replace the Affordable Care Act (ACA). Republican senators will be meeting behind closed-doors today to discuss changes to the bill, with the goal of unveiling a new version of the legislation publicly by the end of the week. The Congressional Budget Office (CBO) is expected to complete its score of the changes by early next week, with Republican leadership hoping to put the bill on the floor shortly thereafter.  

Lawmakers return to Washington this week facing a critical three-week period before the August recess. Without any major legislative achievements so far this year, Republicans will be focused on the tense Senate negotiations on legislation to repeal and replace the Affordable Care Act (ACA). An agreement has yet to be reached on the legislative text that will reach the Senate floor, as Republican leadership deliberate on how to create a package that will placate both conservative skeptics — most notably Sens. Ted Cruz (R-TX) and Mike Lee (R-UT) — and moderates, led by Sens. Dean Heller (R-NV) and Susan Collins (R-ME). The initial proposal in the Senate, known as the Better Care Reconciliation Act (BCRA), was opposed by at least 10 Republicans on both sides of the ideological spectrum. A vote is not expected this week as the Congressional Budget Office is currently scoring some of the proposed changes, but the impending August recess is expected to be the final deadline for the Senate to move a package. Majority Leader Mitch McConnell (R-KY) has suggested that a failure to do so will necessitate lawmakers working on a smaller package with Democrats that would shore up the ACA’s insurance markets.