Republicans Passed a Budget Bill. What Does That Mean for Tax Overhaul? – New York Times
WASHINGTON — Congressional Republicans cleared an early hurdle on Thursday in their attempt to pass a major tax overhaul, after the Senate approved a budget resolution for the 2018 fiscal year.
The vote sets the stage for what could be a wild ride of tax debate over the next few months, which Republican leaders hope will end with President Trump signing a bill into law by Christmas. The big question is whether their ambitions can survive a winding road of hearings and votes.
It will be a difficult task, particularly in the Senate, where Republicans can afford to lose only two votes from their ranks to pass a bill along party lines.
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Here is a look at the path ahead.
How quickly can the House and Senate agree on a budget?
House and Senate Republicans have each approved budgets — but they differ in some big ways, most notably over how much a tax bill would be allowed to increase budget deficits over the next decade.
Hashing out those differences could take weeks in a formal conference committee. Republicans want to move faster than that, so they’re signaling that the House may simply take up and pass the Senate version as soon as next week.
Representative Diane Black, Republican of Tennessee, the chairwoman of the House Budget Committee, seemed to suggest as much in a statement after the Senate vote on Thursday. “In the House, I look forward to swift passage,” she said.
When will Republican leaders unveil a full tax bill?
Republicans have released a framework for their tax plans, which includes targets for reducing corporate and individual income tax rates, but it leaves major details unspecified. Once the budget is completed, party leaders will move quickly to fill in those blanks, by releasing draft legislation that many lobbyists expect could be as long as 1,000 pages.
The House is expected to go first, releasing a bill as soon as the start of November. The Senate could follow soon after with a bill of its own; lobbyists and trade groups expect that bill will differ in some significant ways from the House bill, particularly in the details of international business taxation.
Members of the House Ways and Means Committee are huddling next week to debate final, unresolved questions in their bill. Discussions continue among members of the Senate Finance Committee as well. In both cases, Republicans are almost exclusively negotiating with one another, not with Democrats.
Will Democrats have any chance to change the bill?
Once a bill drops, House Ways and Means members will meet for what is called a markup, where representatives offer amendments. Democrats plan to use that opportunity to try to bend the bill more toward cutting taxes for the middle class — by expanding the earned-income tax credit, for example. Republicans might use the process to try to protect specific constituencies, such as taxpayers in high-tax states who claim large deductions for state and local taxes. Each amendment must be voted on and garner a simple majority of votes to be included in the final bill.
If the bill clears committee, the process will repeat on the House floor, and again in the Senate.
What happens next?
The bill will be moved under a mechanism known as budget reconciliation, which is important because it allows Republicans to bypass a Democratic filibuster and pass the bill with 50 votes. However, it also forces Republicans to comply with a set of procedural rules that could shape the bill and complicate its passage.
The bill will be analyzed by the Congressional Budget Office and the Joint Committee on Taxation, which will project its effect on federal revenues. To proceed under reconciliation, the bill must not increase deficits by more than the amount allowed in the budget resolution — $1.5 trillion over 10 years in the current Senate version — and it must not add to the budget deficit in the next decade.
To comply with those rules, Republicans will most likely set some of the tax cuts in their bill to expire after a few years, and they could phase other cuts in over time. They could turn to more drastic measures if those do not prove sufficient, like choosing to rely on a more favorable analysis of their bill, from the White House or elsewhere.
In that case, said Jacob Leibenluft, a senior adviser at the Center on Budget and Policy Priorities and a former aide to President Barack Obama, “I think you’re talking about taking steps that would be pretty unprecedented.”
Will the House and Senate agree on a final product?
If both chambers manage to pass tax bills, they will almost certainly have large differences. Those will either need to be worked out in formal or informal negotiations between the chambers — unless the House proves willing to pass the Senate bill, unchanged.
If and when they find agreements, Republicans would send a bill to President Trump’s desk for his signature.
Thomas Kaplan contributed reporting.
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