Senate Passes Budget, Unlocking Vehicle for Tax Reform

Senate Passes Budget, Unlocking Vehicle for Tax Reform
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Senate Republicans passed a budget resolution Thursday evening, clearing a significant hurdle and setting up the process to consider tax legislation later this year. 

As expected, the approval margin was narrow, 51-49, with Kentucky Sen. Rand Paul and all Democrats voting against the measure. Though the budget resolution does not become law, it is a critical step in GOP plans to overhaul the tax code this year. It sets up the process known as reconciliation, by which Republicans can bypass a filibuster and pass tax legislation in the upper chamber with just 51 votes -- a likelihood if Democrats remain united against the GOP plan. 

"As we all know, without a budget resolution, there will be no tax reform," Sen. John Cornyn, the Republican whip, said on the Senate floor Thursday night. Republicans were anxious to complete this initial step, as they are desperate for a signature legislative victory and hoping to move quickly to complete tax legislation this year. 

In a rare show of party unity, President Trump tweeted a video of Majority Leader McConnell's speech after the budget passed and called it the "first step toward delivering MASSIVE tax cuts for the American people!" 

The Senate budget, under an agreement earlier this year from Sens. Bob Corker and Pat Toomey, would allow the tax legislation to add $1.5 trillion to the deficit over 10 years, giving lawmakers flexibility in crafting their tax bill. Senate leaders said they hoped that the House would take up their budget and pass it quickly, rather than forcing the two chambers into a conference committee to work out the differences. Though the House passed a separate budget resolution earlier this year -- which included instructions for deficit-neutral tax reform -- the House could adopt the Senate version as soon as next week.

House conservatives prefer the budget resolution passed in the lower chamber, but passing the Senate's version without a conference committee would allow lawmakers to more quickly begin the process of moving their legislation. The Senate budget was tweaked late Thursday with the goal of making it more palatable for House members to vote on without changes. 

"I'll leave it to the House to make their own decision, but it certainly wouldn't hurt my feelings if they took the Senate budget and passed it," Cornyn told reporters Thursday. "That would make us getting to tax reform that much faster." 

Lawmakers have a tight window to pass the tax overhaul. Speaker Paul Ryan has said his goal is to get a bill out of the House in early November, allowing weeks for the Senate to consider and pass it before the end of the year. That would require the House to begin moving rapidly. Though the White House, House and Senate issued a joint blueprint for reform last month, they have yet to release a final bill, leaving some of the most important questions and details unanswered at this point. 

Rep. Kevin Brady, the chairman of the tax writing committee in the House, said in a statement Thursday the Senate took a "major step towards delivering on our tax reform promise to the American people." He added that when the budget is "signed, sealed, and delivered," his committee will introduce its full tax legislation. 

James Arkin is a congressional reporter for RealClearPolitics. He can be reached at jarkin@realclearpolitics.com. Follow him on Twitter @JamesArkin.



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