Critical Step for Republicans Hoping to Enact Tax Reform Legislation
The Senate passed a budget resolution, bringing Republicans in Congress one step closer to enacting tax reform legislation and final appropriations bills. The House on October 26th voted by 216-212 in favor of the identical resolution.
According to the NY Times, “The budget measure cleared Congress over the loud protests of House members from high-tax states like New York, New Jersey and California, who worry that the blueprint will doom the current deduction for state and local taxes — a deduction of great importance to taxpayers in their states.”
“This is a big issue, and it has to be resolved,” Representative Tom MacArthur, Republican of New Jersey, said on the eve of the vote. “Tax reform is good for the country; it’s just not good for the country when it’s on the back of six states. That’s the problem.”
Final approval of the budget measure clears the way for House leaders to unveil their tax plan next Wednesday, with a formal bill drafting during the week of Nov. 6. The high-stakes legislative sprint could affect households in every state and businesses in every industry, with enormous political consequences for President Trump and Republicans in Congress.
A budget resolution is nonbinding and not signed by the president but it is a necessary step that Republicans must take if they hope to enact tax reform legislation with a simple majority.
The Senate budget resolution included an amendment to allow Congressional leaders to avoid the time-consuming process of reconciling the House and Senate versions.
While the House budget resolution had called for deficit-neutral tax reform legislation, the Senate version allows for tax cuts that would increase the deficit by $1.5 trillion.
Moreover, the Senate version does not include the House proposal to cut mandatory spending for safety net programs that provide families with basic living standards.
Democrats warn that increasing the deficit in this way will lead to deep spending cuts to important domestic programs, including affordable housing and community development programs.
The budget resolution also sets spending limits for FY18. But these figures carry little political weight because the budget resolution is non-binding.
Any final appropriations bill needs 60 votes to be enacted. Congress must pass another Continuing Resolution (CR) or enact its final spending bills when the current CR expires in early December.
The National Low Income Housing Coalition (NLIHC) and other national leaders have called on Congress to lift the spending caps for defense and domestic programs equally.