House and Senate Republicans took their first concrete steps Thursday toward enacting a major U.S. tax cut by advancing budget resolutions for fiscal 2018 -- and it only gets harder from here.
"It’s uphill, there’s no doubt about that," Senator Orrin Hatch of Utah, chairman of the tax-writing Finance Committee, told reporters Wednesday about the road forward.
Republicans are arguing over the size of proposed tax cuts, whether those cuts should add to the federal deficit, and which tax breaks to eliminate -- in particular the deduction for state and local taxes. Lawmakers say there will be more fights ahead on other tax breaks for individuals and businesses as the GOP tries to reach its longtime tax-cut goals.
"I think every one of these is going to be hard," said Senator John Thune of South Dakota, a member of Republican leadership and the Finance Committee.
Republicans are eager to enact a budget -- normally an optional exercise -- because it will include language allowing them to ram through a separate GOP-only tax bill without Democratic votes in the Senate. The House adopted its budget resolution Thursday on a 219-206 mostly party-line vote. The Senate Budget Committee voted 12-11 for its version later in the day. A full Senate vote is planned in two weeks, and Republicans hope to produce a joint budget later this month.
President Donald Trump praised the House plan in a statement that said it "drives economic growth and job creation" and lays the groundwork to "fix our rigged and burdensome tax code."
Second-ranking House Democrat Steny Hoyer of Maryland, in a statement Wednesday, called the House resolution "merely a vehicle for achieving partisan tax reform" and added: "Their plan is to push through tax changes that massively increase deficits."
Fighting within the GOP has dogged the budget effort. The House budget measure was stalled for months over conservatives’ demands for deeper spending cuts and bigger tax cuts. While the budget would fast-track $200 billion in cuts to entitlement programs such as Medicare and Medicaid, conservatives had sought $400 billion.
Corporate Tax Cut
The conservative House Freedom Caucus agreed to allow a vote only after the White House and GOP leaders revealed tax plan details last week, including a proposed corporate tax-rate cut to 20 percent from 35 percent.