How far is Congress from passing Trump tax overhaul?
House budget moves lawmakers only a little closer to GOP’s goal
The House approved a budget outline Thursday that opens the door for President Trump and Republican leaders to pass the tax code overhaul they released last month, but that is only a first step in a long and uncertain path.
Republicans have outlined an ambitious plan to collapse brackets, change rates, eliminate deductions, and revamp how big and small businesses are taxed.
“We want the American people to wake up in the new year with a new system,” said House Speaker Paul Ryan, R-Wis.
But Trump and Congress will have to move with agility and political coordination that they could not muster on other priorities this year.
Here’s what must occur for a bill to reach Trump’s desk — and what could get in the way.
FIRST STEP: PASS A BUDGET
Republican leaders say they would welcome bipartisan involvement, but they have decided to use a procedure called reconciliation to prevent Democrats from blocking a tax bill through a filibuster in the Senate. Republicans hold 52 Senate seats. Under reconciliation, a bill can pass with only 50 votes, with the vice president breaking the tie.
To use reconciliation, the House and Senate both must pass a budget resolution for 2018 that spells out the impact tax changes will have on federal revenues. Once they do that, a bill that meets those conditions would be filibuster-proof.
The House budget says tax cuts should be offset by other changes to the tax code and spending cuts.
The Senate Budget Committee approved a different measure Thursday that says tax breaks could cost as much as $1.5 trillion over 10 years. The Senate is out of session next week, and passage will take time because the rules allow senators to offer amendments.
These amendments often do not have the force of law, but both parties tend to demand votes designed to get senators facing reelection to cast difficult votes that can be used in campaign ads.
Liberal groups trying to derail the tax package have set their sights on defeating the budget. One tactic is to focus on the resolution’s call for $5.1 trillion in spending cuts over the coming decade, arguing that cuts that deep would affect popular programs such as Medicare.
Some conservatives have also sounded the alarm about potential expansion of the national debt, challenging the arguments by supporters of the tax overhaul who believe economic growth produced by tax changes will offset reduced revenues.
Once the Senate passes a budget, a conference committee would have to work out differences with the House version. Then each chamber would have to vote again.
RELEASE A BILL
Though months of meetings behind closed doors preceded the tax plan’s release, it lacked vital details, such as the income levels for the new individual tax brackets and how the plan to shift corporate taxes from a global system to a domestic one would work.
Filling in those blanks requires legislation, which the Constitution says must originate in the House. The chairman of the House Ways and Means Committee, Rep. Kevin Brady, R-Texas, said that once the budget resolution “provides our runway to land bold tax reform on,” his committee will unveil a bill.
To get around budget rules designed to prevent increasing the deficit, for example, some tax cuts might be crafted to be temporary so that the money that would come in when they expire would offset the upfront revenue loss of cutting the taxes in the first place. This would count even if lawmakers have no intention of actually letting the tax breaks expire.
PASS THE HOUSE
After the bill gets out of Ways and Means, the full House will be able to weigh in. Ryan could restrict amendments, but if a bloc of representatives seeking changes endangers passage, he could open the bill up to changes.
To date, supporters of a tax overhaul have been trying to build momentum for the bill by arguing it will be a boon to middle-class families. They have brushed aside criticisms about the possible cost of the plan, saying details still are being decided, so any bottom-line analysis is premature. But an actual bill will show who the winners and losers are.
SENATE COULD BRING TWIST
It is almost certain the Senate would want to make its own changes.
The chairman of the Senate Finance Committee, Republican Orrin Hatch of Utah, assured the committee’s top Democrat, Ron Wyden of Oregon, on Tuesday that there would be a full committee process where members could offer amendments.
Senate rules also give the entire chamber the opportunity to offer amendments when the bill gets to the floor.
“Everybody gets a vote on their amendments, and they’re going to enjoy making the Senate vote on some politically painful amendments,” said Mac Campbell, a former deputy staff director and general counsel of the Senate Finance Committee. “That’s just going to be ugly.”
Majority Leader Mitch McConnell, R-Ky., would have to impose strict party discipline to prevent the Senate from passing a change that might endanger the revised bill passing the House.
“They’re going to enjoy making the Senate vote on some politically painful amendments.”
Mac Campbell, a former deputy staff director and general counsel of the Senate Finance Committee
Rep. Kevin Brady, R-Texas, front left, and House Speaker Paul Ryan, R-Wis., center right, take part in a press event on tax reform last month at the Capitol.