The other GOP stale­mate: House bud­get grid­lock im­per­ils tax re­form plans

The Washington Post Sunday - - POLITICS & THE NATION - BY MIKE DEBO­NIS mike.debo­nis@wash­post.com

An old prob­lem for con­gres­sional Repub­li­cans — pass­ing a bud­get — has resur­faced with po­ten­tial dev­as­tat­ing con­se­quences for Pres­i­dent Trump’s leg­isla­tive agenda.

A stand­off be­tween con­ser­va­tive and mod­er­ate House Repub­li­cans is threat­en­ing pas­sage of the yearly bud­get res­o­lu­tion, as it did a year ago. This time, how­ever, plans for an am­bi­tious tax re­form bill Trump has pledged to sign are hang­ing in the bal­ance.

Con­ser­va­tives are push­ing for the bud­get to slash non­de­fense spend­ing, in­clud­ing ma­jor en­ti­tle­ment re­vi­sions. They want to cut deeply into fed­eral wel­fare pro­grams they have long eyed. Mod­er­ates, mean­while, want to ne­go­ti­ate spend­ing lev­els with Democrats, as House Repub­li­cans have done since 2011, and keep the bud­get oth­er­wise fo­cused squarely on a tax over­haul.

The clash so far has put the an­nual process three months be­hind sched­ule, a cru­cial episode of leg­isla­tive grid­lock that has got­ten less at­ten­tion than the GOP’s stag­nant health-care bill in the Se­nate.

“This isn’t the bud­get; it’s the tax-re­form bud­get,” Rep. Kevin Brady (R-Tex.), the chair­man of the House Ways and Means Com­mit­tee, said Fri­day. “It gives us the path to do the bold­est tax re­form in a gen­er­a­tion.”

The bud­get res­o­lu­tion can set out spe­cial pro­ce­dures, known as rec­on­cil­i­a­tion, that al­low the ma­jor­ity party to pass bills with­out fear of a Se­nate fil­i­buster. But first, the ma­jor­ity party has to agree on a bud­get.

Twenty mem­bers of the Tues­day Group, a cau­cus of mod­er­ate House Repub­li­cans, warned House Speaker Paul D. Ryan (RWis.) in a let­ter Fri­day that the di­rec­tion of bud­get ne­go­ti­a­tions were “ex­tremely prob­lem­atic” and “could im­peril tax re­form and once again lead to in­sta­bil­ity in the ap­pro­pri­a­tions process.” They threat­ened to op­pose any bud­get res­o­lu­tion that runs afoul of their con­cerns.

Ryan spokes­woman Ash­Lee Strong said Fri­day that ne­go­ti­a­tions are on­go­ing. “House Repub­li­cans have made sig­nif­i­cant progress on bud­get de­ci­sions, and th­ese fam­ily dis­cus­sions will con­tinue among the con­fer­ence,” she said.

In re­cent weeks, the House Bud­get Com­mit­tee has strug­gled to find an ac­cord be­tween hard­line fis­cal con­ser­va­tives who want to slash long-term fed­eral spend­ing, de­fense hawks who want an im­me­di­ate boost for the mil­i­tary and ap­pro­pri­a­tors who are wary of cut­ting too deeply into do­mes­tic pro­grams.

His­tor­i­cally, the bal­ance has been hard to strike. House and Se­nate Repub­li­cans passed a 2017 bud­get in Jan­uary — nine months late — only af­ter Trump won the pres­i­dency and law­mak­ers agreed to set aside their spend­ing squab­bles to start the rec­on­cil­i­a­tion process to undo the Af­ford­able Care Act.

Now the spend­ing squab­bles are front and cen­ter. De­fense and deficit hawks reached an agree­ment to spend $621 bil­lion on de­fense and $511 bil­lion on non­de­fense pro­grams in 2018, but ne­go­ti­a­tions have hung up on how much to cut from “manda­tory spend­ing.”

Con­ser­va­tives want more than $200 bil­lion in cuts, aimed largely at Med­i­caid; the Sup­ple­men­tal Nu­tri­tion As­sis­tance Pro­gram, or food stamps; and Tem­po­rary As­sis­tance for Needy Fam­i­lies, the main fed­eral wel­fare pro­gram. They are also look­ing to in­flu­ence the course of a tax over­haul by seek­ing lan­guage to en­sure that a border-ad­just­ment tax pro­posal fa­vored by Ryan is not in­cluded and to al­low for leg­is­la­tion that could bring in less rev­enue than cur­rent law. Brady and other key GOP lead­ers have in­di­cated they want the tax bill to be rev­enu­eneu­tral.

“What we need to do is make as many tax cuts as we pos­si­bly can to let peo­ple spend their money in­stead of Wash­ing­ton bu­reau­crats spend­ing it,” said Rep. Mark Mead­ows (R-N.C.), chair­man of the hard-right House Free­dom Cau­cus.

The mod­er­ates, mean­while, ar­gue that the level of en­ti­tle­ment cuts are “not prac­ti­cal” and the con­ser­va­tives’ de­mands would com­pli­cate the tax bill. Rep. Char­lie Dent (R-Pa.), a co-chair­man of the Tues­day Group, said tax re­vi­sion is “dif­fi­cult and com­plex enough with­out adding other is­sues.”

More­over, the mod­er­ates ar­gue the GOP spend­ing num­bers sim­ply aren’t based in re­al­ity. The de­fense spend­ing level floated by Repub­li­cans ex­ceeds statu­tory caps es­tab­lished in the 2011 Bud­get Con­trol Act, and bust­ing them would re­quire ne­go­ti­a­tions with Se­nate Democrats who have his­tor­i­cally pushed for par­ity with non­de­fense spend­ing.

“Far too much time and en­ergy is be­ing ex­pended on this first launch that will go ab­so­lutely nowhere in the Se­nate,” Dent said. “Our mem­bers want to vote on the real bud­get agree­ment, not the fake one.”

The im­pli­ca­tions for a tax over­haul are def­i­nitely not fake, Brady said. In an in­ter­view taped for an episode of C-SPAN’s “News­mak­ers,” air­ing Sun­day, he in­sisted that Repub­li­cans re­main on track to pass a bud­get and then to pass a ma­jor tax-re­form bill by year’s end.

“Ev­ery is­sue we tackle is in the con­text of, does this move us to­ward tax re­form?” he said. “Will this get us to that de­bate that hap­pens once ev­ery 30 years? Does it clear the field to do that?”

Brady also sug­gested that, sooner or later, Trump would have to come off the side­lines to turn his tax agenda into re­al­ity.

“No one has more at stake in de­liv­er­ing tax re­form for the Amer­i­can peo­ple than Pres­i­dent Trump,” he said. “With­out pres­i­den­tial lead­er­ship, tax re­form just doesn’t hap­pen. We know that from his­tory.”

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