The Iran conflict is complicating GOP plans to advance a cost-of-living agenda ahead of the midterms as lawmakers weigh a second reconciliation package.
With six months until voters head to the polls, many Republicans say they are still planning additional budget reconciliation legislation beyond a party-line package already on track to fund immigration enforcement and White House security priorities. A broader second bill is also under discussion, according to a Politico report.
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“The American people universally want us to do more than what we’ve already done,” Republican Missouri Rep. Eric Burlison told the outlet, adding that affordability “is the No. 1 issue that people are dealing with right now.” (RELATED: Americans May Be Stuck Paying Wartime Gas Prices Long After Iran Deal)
But the path forward remains complicated. Republicans are divided over how to address rising prices, while talks over another reconciliation package are tied to disputes over Iran war funding, potential social service cuts, and a stalled elections bill in the Senate — all of which have fueled internal GOP tensions.
At the same time, the blockade of the Strait of Hormuz linked to the escalating Iran War is expected to add further pressure on global commodity markets and drive up costs for consumers. The disruption is projected to raise prices for key goods, including oil, fertilizer, sulfur, and steel, contributing to broader inflationary pressures.
Gasoline prices are expected to stay elevated for an extended period, even if a U.S.-Iran peace deal eventually reopens key shipping routes like the Strait of Hormuz, meaning relief at the pump is likely to be gradual rather than immediate.
The average U.S. price for gasoline stood at $4.54 per gallon on Wednesday, a sharp increase from sub-$3 levels before the start of the Iran conflict, according to data from the American Automobile Association (AAA).
The issue is also shaping election-year dynamics, with Republicans wary of entering campaign season without a clear economic message on affordability.
An NPR/PBS News/Marist poll from earlier this week suggests President Trump and the GOP face headwinds on cost-of-living and affordability. The poll found that 55% of Americans believe that the economy no longer works for them. Notably, this is the highest number recorded in the history of the poll. Especially troubling is that 81% of respondents said they’re feeling especially strained by gas prices.
Against that backdrop, Republican Florida Rep. John Rutherford told Politico he does not want the war “to sideline us because of the fuel prices back here in America,” adding, “we’ve got to move quickly.”
Defense spending is also under consideration. House Budget Chair Jodey Arrington said Republicans are discussing roughly $100 billion to replenish munitions and boost readiness tied to the conflict. He added that the broader question is how to strengthen “deterrence and readiness in the future.”
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A larger Pentagon package could help unify GOP support but would require significant offsets, and some vulnerable Republicans have raised concerns. Some have also floated a separate Ukraine aid package that could draw Democratic backing.
Tax policy is re-emerging as another focus, with Republican Texas Sen. Ted Cruz and other Republicans discussing capital gains changes tied to inflation. House Ways and Means Chair Jason Smith and Arrington previously urged Speaker Mike Johnson to expand an immigration enforcement bill to include tax cuts. “Opening the tax code should be part of this exercise,” Arrington said.
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Election policy is also part of internal discussions. The stalled SAVE America Act has prompted talk of incorporating some provisions into a potential “Reconciliation 3.0,” with Senate Budget Chair Lindsey Graham drafting a framework and House Administration Chair Bryan Steil circulating proposals. (RELATED: Trump Signals Leveraging Beloved Deep State Spy Tool For SAVE America Act)
However, some conservatives argue major provisions would not survive reconciliation rules and instead want the bill considered directly, even if that means eliminating the filibuster.
Separately, Republicans are weighing whether to include housing, health care, and social policy provisions in a broader package. With a bipartisan housing bill stalled, ideas such as first-time homebuyer assistance and “portable mortgages” are under discussion.
Health care costs are also being considered. “Health care reform should be a part” of any new bill, Republican Rep. Virginia Rob Wittman said, calling it “another thing that’s driving costs,” though Republicans are unlikely to revive expanded Obamacare tax credits. (RELATED: Iran War Pain Quickly Sets In As World Reels From Full Blockade)
On social programs, divisions remain over proposed fraud crackdowns and potential changes to Medicaid and food assistance. “Don’t mix a lot of other stuff in there that could put members in a precarious position back home,” Republican New Jersey Rep. Jeff Van Drew told the outlet, arguing for a “very narrow” approach.