House GOP leaders plan to pass the Senate’s recently approved 2018 budget blueprint through the lower chamber in the coming days and could release actual tax legislation shortly afterward, as they try to press forward with their goal of passing tax reform by year’s end.
Republican leadership is likely to get a crucial boost from a key bloc of House conservatives, who are demanding that the GOP push for deeper spending cuts but say they’ll grudgingly vote yes if avoiding negotiations between the two chambers will speed tax reform along.
“We are on the verge of doing something that is going to make a big difference for so many families, and that is why we’re excited about getting this budget moving this week and moving on to tax reform,” said House Speaker Paul D. Ryan.
Ways and Means Committee Chairman Kevin Brady, the House’s top tax writer, told reporters Tuesday that his committee could release a tax bill Nov. 1, if the budget process is finished in the coming days, according to Bloomberg. That would be the next major milestone for what’s now the GOP’s top legislative priority.
Passing a non-binding budget resolution is usually symbolic, but the House and Senate blueprints for 2018 include a fast-track tool that will allow Republicans to approve their tax package with a simple majority, bypassing a Democratic filibuster.
The Senate’s 2018 budget plan, passed last week, is similar to the House version that passed earlier this month, though it doesn’t include additional spending cuts secured by House conservatives. Both chambers are facing intense pressure from President Trump for quick action.
Some of them say they’re OK with that — for now.
“We’ve asked for tax reform and we’ve asked for spending reform,” said Rep. Scott Perry, Pennsylvania Republican. “The Senate has said you can only have one.”
“So while we’d like to have both we got to at least get one of [them],” he said. “The bird in the hand is worth the two in the bush.”
Both chambers’ plans set 2018 discretionary spending levels at about $1 trillion and anticipate a federal deficit of at least $472 billion next year. But there are other key differences, notably that the Senate plan allows for deficit-financed tax cuts of up to $1.5 trillion, while the House version envisions a tax plan that doesn’t add to the federal deficit.
Rep. Jim Jordan, Ohio Republican and a key conservative leader, says he’s never been wedded to the idea that a tax package has to be “revenue neutral,” where immediate revenue losses from cutting individual and corporate rates are completely offset by eliminating other loopholes and exemptions.
“I think we just got to focus on designing a better tax code,” he said. “Does it let people keep more of their money? Does it simplify the code? And will it lead to economic growth?”
“And if the answer to those three questions is yes, then we should just do it,” he said, saying the spending side can be tackled separately.
GOP leaders, though, are still grappling with major questions on what will actually be in the tax package once they pass a budget, including how low to take individual and corporate rates and what to do about the deduction for “state and local taxes paid,” known to tax geeks as SALT.
Axing that break could generate nearly $2 trillion in revenue over a decade that could pay for other rate cuts. But blue-state Republicans have said getting rid of the deduction would effectively raise taxes on their middle-to-upper income constituents, and have been seeking a compromise on preserving part of it or possibly instituting an income cap for users.
Rep. Peter King, New York Republican, says he plans to vote “no” on the budget this week because of the state and local deduction issue.
“The only reason we’re voting for this budget now is so they can move tax reform next week, and I don’t know what’s in the tax reform bill other than they’re saying SALT is going to be out,” Mr. King said. “All the indications are we’re going to get screwed on SALT.”
But Rep. Tom Reed, another New York Republican fighting to preserve the break, says he plans to vote for the budget.
“I believe tax reform is critical to the future of the country, and this budget is the vehicle to get us there and so I’ll be a strong yes,” Mr. Reed said.
Though Republicans are generally unified behind a desire to cut taxes for individuals and businesses, some have said they’re worried that the tax reform process itself could end up being a repeat of the GOP’s failed Obamacare repeal effort.
Conservatives had gone along with supporting a bare-bones 2017 budget blueprint that included the fast-track budgetary tool, known as reconciliation, to be used for Obamacare repeal, only to see the effort ultimately flame out in the Senate over the summer.
Rep. Matt Gaetz, Florida Republican, said Tuesday he’s “not there” on the budget, saying the Senate didn’t have the “guts” to include enough cuts to entitlement programs.
But Mr. Gaetz predicted that in the end, the House will swallow whatever the Senate does on tax reform.
“I see us taking it,” he said. “If you look at every major issue that’s come before the 115th Congress, we do what the Senate wants. Long live the Senate.”
• David Sherfinski can be reached at dsherfinski@washingtontimes.com.
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