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House May Adopt Senate Budget Resolution to Hasten Tax Reform

Posted on October 23, 2017 by Dylan F. Moroses, Luca Gattoni-Celli, David van den Berg

The House’s top taxwriter said October 20 that the lower chamber may adopt the Senate’s fiscal 2018 budget resolution, a move that would permit tax reform legislation to be introduced more quickly than if the House pursued its own budget measure.

House Ways and Means Chair Kevin Brady, R-Texas, told Fox News that the House could take up the Senate document without a conference committee process. He added that House Budget Committee Chair Diane Black, R-Tenn., “worked with the Senate budgeteers on this bill that they passed last night, making sure that we had really common ground in this. So, I think there’s a very clear possibility that the House clears this next week.”

The House Rules Committee is scheduled to meet October 24 to consider the Senate budget, suggesting a House floor vote could come as soon as October 25.

More than 20 organizations, including right-leaning groups Americans for Prosperity and the Club for Growth, expressed support for this approach, saying in an October 20 letter to the House that passing the Senate’s budget resolution would give lawmakers “a head start on negotiating the specifics of tax reform legislation.”

Appearing on CBS This Morning, House Speaker Paul D. Ryan, R-Wis., said, “The Senate votewas perfect yesterday.” He did not give any indication of whether the House might approve the upper chamber’s measure, but he made clear that tax reform will include a fourth individual income rate on top of three already specified in the Republican “Big Six” framework.

Brady said that passing the Senate’s budget resolution would also “clear the way” for his committee to act on tax reform. Once the budget is “signed, sealed, and delivered, we’ll announce both the date for the tax reform plan and the Ways and Means Committee markup,” he added.

House Freedom Caucus Chair Mark Meadows, R-N.C., indicated that “most conservative” House Republicans would be willing to accept the Senate budget resolution if it meant tax reform legislation would reach President Trump by Thanksgiving.

Speaking on Fox News, Meadows laid out the process for winning their support. “We would go ahead and vote on the Senate bill next week. We would start the markup process the following week, and then, hopefully, have a floor vote in [the] House seven to 10 days after that — certainly by Thanksgiving,” he said.

The Senate voted 51 to 49 to approve its budget resolution October 19, and shortly before that, senators approved an amendment that paved the way for quick House approval. Senate Budget Committee Chair Michael B. Enzi, R-Wyo., introduced the measure, which includes technical changes made at Ryan’s request.

The amendment is “mostly technical” and incorporates budget rules that the House’s budget resolution contained, said Ed Lorenzen of the Committee for a Responsible Federal Budget.

“It does include a provision which could allow the House to use dynamic scoring for tax reform, even though the $1.5 trillion number for tax reform was portrayed as the static cost which would be offset by dynamic effects,” he said.

Ryan welcomed the Senate’s approval of the budget resolution and Enzi’s amendment. “I applaud the Senate for passing a budget and appreciate adoption of a new Title 5 in the resolution to address the House’s priorities,” he said in an October 19 release.

The House’s budget resolution included reconciliation instructions for just over $200 billion in deficit reductions over a decade, as well as instructions for $1.5 trillion in deficit increases over that period.

Several Senate Republicans have said their budget document gives necessary “head room” to produce a tax bill within budgetary constraints that may lose revenue under traditional scoring methods.

Ryan Confirms Fourth Rate

The tax reform framework that Trump administration officials and congressional GOP leaders released in September specifies three individual income tax rates of 12 percent, 25 percent, and 35 percent, leaving the congressional taxwriting committees discretion to set a fourth, top rate.

During the CBS interview, Ryan said the top rate would happen. And after being asked about Trump’s promise that the first family would not personally benefit from tax reform, Ryan posited that the president might have this rate in mind.

Trump is “the one who has been very insistent that we reintroduce what we call the fourth bracket, meaning we don’t lower taxes for higher-income individuals,” Ryan said. “That, I think, is what he’s talking about. So that all that revenue goes to the middle-class tax cut.”

Ryan expanded on a previous comment that the budget both chambers agree to will dictate the top individual tax rate. “Once we get that [final] budget resolution, that tells us how our numbers will work. Then we’ll introduce the [tax reform] bill, which will have that fourth bracket,” to prevent a big drop in high earners’ tax rates, he said.

A White House spokesperson declined to comment on a fourth individual income tax rate or whether Trump wants one. The president’s “two nonnegotiables are a middle-class tax cut and getting the corporate rate down to 20 percent or lower,” the spokesperson said in an email. As for the rest of tax reform, “To a large degree, these decisions are now in the hands of Congress to figure out what they can pass.”

Stephen K. Cooper contributed to this article.

Follow Dylan F. Moroses (@DMoroses3244), Luca Gattoni-Celli (@TheGattoniCelli), and David van den Berg (@TAtaxDavidVDB) on Twitter for real-time updates.