House Adopts Budget Resolution Paving Way for Tax Package

Measure could increase deficit by $1.5 trillion

The House adopted a budget resolution that is the GOP’s vehicle for a tax overhaul measure. (Bill Clark/CQ Roll Call file photo)
The House adopted a budget resolution that is the GOP’s vehicle for a tax overhaul measure. (Bill Clark/CQ Roll Call file photo)
Posted October 26, 2017 at 11:02am

The House on Thursday adopted a fiscal 2018 budget resolution by a narrow margin, with supporters acknowledging it was little more than a vehicle for a still-developing tax measure.

“Most importantly this budget that we passed today brings us one step closer to tax reform,” House Speaker Paul D. Ryan said. 

The budget was adopted, 216-212, with all Democrats and 20 Republicans voting against the measure. This was the same measure the Senate adopted last week. 

Its reconciliation instructions allow for up to $1.5 trillion in revenue losses over the next decade. It would also allow the cap on defense spending to be raised to $640 billion for fiscal 2018, without the need for offsets. 

“On November 1, we will introduce our tax reform bill that will deliver more jobs, fairer taxes, and bigger paychecks to people across our country,” House Ways and Means Chairman Kevin Brady said in a statement. “Beginning on November 6, the Ways and Means Committee will consider this legislation in a committee markup.”

President Donald Trump called the adoption “big news” in a Twitter post. The White House followed up with a statement, saying the president “looks forward to further cooperation with Congress to advance the Administration’s pro-growth and pro-jobs agenda.”

Ryan said collaboration with the administration will continue.

“We’re working very closely with the White House on this,” the speaker said, adding that there would be “no surprises” with their counterparts in the administration or the Senate.

SALT deduction

Some of the Republicans voting “no” had concerns over the possible elimination of the state and local tax deduction, or the SALT deduction, as part of the GOP’s tax overhaul.

New York Rep. Lee Zeldin was among them.

“Hopefully, between now and then, we’re able to work out a reasonable understanding,” he said of the upcoming tax bill. Zeldin and other members from high-tax states hope to at least partially maintain the SALT deduction. 

“From the meetings, we’ve been given strong indications that a change is coming,” he said.

New York Rep. John Katko, another “no” vote, said members opposed to scrapping the SALT deduction received assurances from House GOP leaders that a compromise would be reached before the final tax bill is released.

“We’re all willing to be flexible. We’re all willing to find a compromise. We want to make it clear to them that we’re not going to stand for language in the budget which basically said the state and local deduction is one of our targeted things to take out,” he said.

Katko said there was no specific compromise proposal laid out by leaders during a post-vote meeting with GOP members from high-tax states, but they discussed the “contours” of a potential fix. He said the ideas discussed seemed favorable to members representing most parts of New York state, but there were still concerns about how those ideas could impact taxpayers in New York City.

New York Rep. Peter T. King, who voted “no,” said members opposed to scrapping the SALT deduction will continue to meet with GOP leaders until a fix is reached.

Seven of the nine Republican members of the New York delegation voted against the budget resolution, while four of the five members of the New Jersey’s GOP delegation did the same.

Brady, emerging the post-vote meeting, told reporters they haven’t yet reached a compromise on the issue but that he and GOP leaders remain at the table to ensure that New York and New Jersey taxpayers will not end up paying more taxes under the still-developing GOP plan.

“We continue too hone through some solutions and what it means for their taxpayers,” he said.

Brady said lawmakers concerned about the deduction, particularly those who voted against the budget Thursday, have made clear they won’t vote for the tax bill without an acceptable solution.

House Minority Leader Nancy Pelosi admonished Republicans for their budget vote.

“They drew a line in the sand between middle-class and working families and the very wealthy and corporate America in our country,” the California Democrat said.

The 20 GOP nays: