US House passes Budget plan
The House on Thursday sounded the starting gun on legislative efforts to cut taxes by as much as $1.5 trillion over the coming decade, narrowly clearing a budget blueprint that will allow a tax bill to pass Congress without any Democratic votes.
But the 216-212 vote hinted at how difficult actually legislating a tax overhaul could be. The budget measure cleared Congress over the loud protests of House members from high-tax states like New York, New Jersey and California, who worry that the blueprint will doom the current deduction for state and local taxes — a deduction of great importance to taxpayers in their states.
Twenty Republicans voted against it, 11 of them from New York and New Jersey.
“This is a big issue, and it has to be resolved,” Representative Tom MacArthur, Republican of New Jersey, said on the eve of the vote. “Tax reform is good for the country; it’s just not good for the country when it’s on the back of six states. That’s the problem.”
Final approval of the Budget measure clears the way for House leaders to unveil their tax plan next Wednesday, with a formal bill drafting during the week of November 6. The high-stakes legislative sprint could affect households in every state and businesses in every industry, with enormous political consequences for President Trump and Republicans in Congress. The Budget measure would allow for a tax Bill that adds as much as $1.5 trillion to federal deficits over a decade, at a time when the federal government is already piling up more and more debt, which has now topped $20 trillion. The deficit for the 2017 fiscal year, which ended September 30, totalled $666 billion, an increase of $80 billion from the previous year.
The outline of a tax plan unveiled in September would cut the corporate income tax rate to 20 percent, from 35 percent, collapse individual income tax brackets from seven to three, with tax rates of 12 percent, 25 percent and 35 percent, and double the standard deduction to $12,000 for individuals and to $24,000 for married couples filing jointly. But the hardest decisions on how to mitigate the costs of the proposal have yet to be made.
The Budget resolution approved Thursday, for the 2018 fiscal year, ostensibly maps out spending and revenue levels for the federal government. But its passage is meaningful largely because of the special procedures that it unlocks.