The Senate passed its 2018 budget Thursday night, setting the stage for an all-out rush to pass a tax overhaul, which Republicans hope to get done by Christmas. Here’s what the budget vote means and what happens next:
There’s Still a Bit of Budget Work to Be Done: The Senate budget, passed by a 51-49 vote with Sen. Rand Paul the only Republican “no,” is very different than the budget that was approved by the House. Most notably, the Senate budget allows for tax cuts that increase deficits by $1.5 trillion over 10 years. The House version calls for a tax overhaul that doesn’t increase deficits, and it includes $203 billion in spending cuts to social welfare programs. The two chambers must reach agreement on a final budget, and lawmakers reportedly have a deal to do that quickly.
About That House-Senate Deal: To expedite the budget process, “House conservatives would have to swallow the Senate’s plan to grow the deficit,” Politico reported. The deal also eliminates the House budget’s $203 billion in spending cuts and calls for increasing the Pentagon’s budget to $640 billion without offsets if lawmakers agree to lift current spending caps — “a way to win over House defense hawks,” according to Politico.
So What About the Deficit? Mitch McConnell called the Senate blueprint “a fiscally responsible budget that will help put the federal government on a path to balance.” Deficit hawks and budget groups say nuh-uh. “No lawmaker can acknowledge our massive debt problem, argue against tax increases, and then pass a budget that only calls for $1 billion in savings out of a possible $47 trillion in spending and claim to be fiscally responsible – there is no universe in which this would be considered responsible,” Maya MacGuineas, president of the Committee for a Responsible Federal Budget, said in a statement.
In short, Republicans have set themselves up again for criticism that, contrary to their long-standing claims about the urgent need for debt reduction, all they truly care about is tax cuts. The Senate budget “authorizes lawmakers to blow a gaping hole in the deficit, roughly twice the size of the 2009 stimulus package that 38 then-Senate Republicans opposed, despite earlier pledges to offset its cost,” The Washington Post’s Tory Newmyer notes.
Congress Still Needs to Write the Tax Bills: Republicans in the House and Senate have been working behind closed doors to flesh out the reform framework released last month, and there are many details that need to be decided — meaning that there are many possible points of contention left to resolve.
An Aggressive Timeframe: Republicans want to move quickly and hope to have the House pass a bill in November, with the Senate following suit by December or perhaps early next year. Ideally, Republicans are aiming to get Trump a tax bill by Christmas. “The speed is striking — and strategic — for tax legislation that lobbyists believe could span 1,000 pages,” The New York Times reports. “Republicans hope the breakneck pace will help hold their narrow Senate majority together against what will almost certainly be a deluge of lobbying and Democratic criticism.”
Disagreements Could Still Derail the Whole Thing: Republicans can’t lose the support of more than 22 members in the House or two members in the Senate, assuming they get no Democratic votes. Expect to see lots of trial balloons as lawmakers try out ideas designed to win support for the overall plan.
Trial Balloons Are Already Rising: On Friday, Sen. Lindsey Graham floated the idea of linking the tax bill to an increase in the minimum wage to $10.10 an hour, to ensure that everyone benefits from the changes — and to possibly win bipartisan support. House Speaker Paul Ryan also indicated on Friday that he would add a fourth, higher tax bracket to the Republican plan, in order to reduce or eliminate benefits flowing to upper-income households and to ensure “that all that revenue goes to the middle-class tax cut.” Expect to see many more details and proposals in the coming weeks.