Thread: U.S. Senate Adopts Budget, Giving Momentum to Trump's Tax-Cut Plans

U.S. Senate Adopts Budget, Giving Momentum to Trump's Tax-Cut Plans

By Erik Wasson, Sahil Kapur, and Laura Litvan
October 19, 2017, 9:34 PM EDT October 19, 2017, 11:21 PM EDT

Plan would allow quick passage in House after Senate approval
Pact includes compromises on defense spending, entitlements

The Senate adopted a fiscal 2018 budget resolution Thursday that House GOP leaders agreed to accept, a show of unity aimed at speeding consideration of President Donald Trump’s plan to enact tax cuts.

The budget cleared the Senate 51-49, with all Democrats and Republican Senator Rand Paul of Kentucky voting against it.

Final approval of the measure will unlock a special procedure allowing Republicans to pass a subsequent tax code rewrite without Democratic support. The House and Senate tax-writing committees plan to release draft legislation by early November, which will set off a furious lobbying battle as Republicans attempt to enact a bill by the end of the year.

"This resolution creates a pathway to unleash the potential of the American economy through tax reform and tax cuts, simplifying the overcomplicated tax code, providing financial relief for families across the country, and making American businesses globally competitive," the White House said in a statement after the vote.

House and Senate Republicans crafted an amendment to the Senate budget designed to remove the need to spend weeks working to reconcile it with the version already passed by the House. The House would simply vote on the budget that passed the Senate; plans call for holding that vote next week, a House aide said.

Senators acknowledged that producing the budget, which took months of work by Budget Chairman Mike Enzi of Wyoming and his staff, is the easiest part of enacting a tax overhaul.

"This is a necessary part that hasn’t been easy, but I think we’re going to get there," GOP Senator Lindsey Graham of South Carolina said before the vote. "It’s an uphill task. We’re sort of at the bottom of the mountain and we have to keep climbing to the top."

Earlier in the week, Graham feuded with Kentucky’s Paul, who demanded a $43 billion cut to war spending levels allowed by the budget. "He’s always got a reason to vote no," Graham said. Paul also opposed Graham’s partial Obamacare repeal bill that failed in the Senate last month.

To avoid a repeat of the embarrassing Obamacare setback, Republicans must find a way to mollify members eager to protect cherished tax breaks while also satisfying senators like Bob Corker of Tennessee who oppose increasing the deficit and won’t buy arguments that trillions of dollars in tax cuts will pay for themselves through economic growth alone.

"The only way for this to work -- I met with Secretary Mnuchin last night on this very topic -- they’ve got to close $4 trillion in loopholes, they’ve got to make the taxes permanent in nature, and that’s going to be the toughest part because for every high-paid lobbyist it’s going to be a knife fight," Corker told reporters, referring to Treasury Secretary Steven Mnuchin.

The GOP budget compromise took shape Thursday evening. It allows for more defense spending in the first year, in line with the House budget, according to a Republican aide. It eliminates House language to expedite $203 billion in entitlement savings, while leaving in place Senate language that would allow drilling in the Arctic National Wildlife Refuge. Senate Democrats tried without success to strip out the drilling provision.

On taxes, the compromise would keep the Senate’s language allowing tax cuts that add up to $1.5 trillion to the deficit, not including the effects of economic growth, according to the aide. The House plan had required tax changes not to lose revenue.

GOP leaders worked to ensure they had enough votes for final passage of the budget measure, H.Con.Res. 71. An ailing Senator Thad Cochran returned to Washington from Mississippi to cast his vote.

House Speaker Paul Ryan of Wisconsin said in a statement the Senate budget vote “keeps us on track to enacting historic tax reform that will mean more jobs, fairer taxes, and bigger paychecks for American families.” Senate Majority Leader Mitch McConnell of Kentucky called it “the first step towards replacing our broken tax code.”

Democrats weren’t happy.

Senator Joe Manchin of West Virginia said in a statement, “I’m embarrassed that this body voted to saddle our children with more debt.” He said the legislation will make it difficult to pass a bipartisan tax bill.

The final Senate action followed a series of votes on amendments known as a vote-a-rama that started Thursday at 3 p.m. Washington time.

Senate Democrats used this week’s budget process to force Republicans to take politically painful votes that highlight studies showing the tax framework unveiled so far would probably add trillions to the deficit while mostly benefiting the wealthy. Republicans say the studies are incorrect because final tax brackets and credits haven’t been announced.

In one vote, the Senate defeated 51-47 an amendment by Democratic Senator Heidi Heitkamp of North Dakota that would have barred tax increases for people earning less than $250,000 a year. Enzi called the proposal a poison pill because it would tie the Finance Committee’s hands.

The Senate voted on dueling amendments on the state and local tax deduction, which many Republicans want to eliminate. Senators signaled support for at least limiting the deduction by supporting an amendment by GOP Senator Shelley Moore Capito of West Virginia on a 52-47 vote. Members defeated a Democratic amendment aimed at protecting the deduction.

Senate Republicans signaled their intentions on dealing with contentious issues in a tax plan by rejecting Democratic amendments that would bar raising the deficit, prevent any middle-class tax increases, and block tax breaks for the top 1 percent. The votes indicated that Republicans will try to rewrite the tax code with mostly -- if not exclusively -- GOP votes. It’s a gamble that they’ll succeed where they failed on replacing Obamacare.

"Not delivering on tax reform just isn’t an option," said third-ranking GOP Senator John Thune of South Dakota. "If we don’t get that done, then we’re obviously going to be held accountable by the people of this country, and we should."

https://www.bloomberg.com/news/artic...-tax-cut-plans

Good Job, Senate. Shame on you, Rand Paul.

To avoid a repeat of the embarrassing Obamacare setback, Republicans must find a way to mollify members eager to protect cherished tax breaks while also satisfying senators like Bob Corker of Tennessee who oppose increasing the deficit and won’t buy arguments that trillions of dollars in tax cuts will pay for themselves through economic growth alone.

What people like Corker amd the CBO don't understand is how the type of economic growth Trump is pushing will reduce deficits and over a fairly quick period of time balance the budget. It's not from more taxes being paid, although there will be some of that, it's from the reduction of government spending without cutting programs, reductions in spending on poverty that will no longer exist because far fewer people qualify for the subsistence, which cuts spending automatically by natural course.

For example, if you were just cutting taxes and that's the only change you were making, then there will be long-term deficits. But when you're reducing immigration (the single largest source of poverty spending in our country), fixing the Obamacare debacle, expanding domestic manufacturing, bringing our good jobs and industries back home, unleashing all forms of energy development, fixing bad free trade deals, seriously negotiating government contracts and when possible and reasonable reducing the number of federal workers through attrition and other unnecessary government spending including foreign aid and so forth, this all adds up big time.

It adds up through a combination of deficit-reduction tools, more revenue through more earnings and profits but driven primarily by the major reductions in poverty spending, the latter of which is by far the greatest number which makes the greatest contribution to deficit reduction from tax cuts when coupled with a proper all-direction 360 economic development plan like Trump's.

This will all be good for our country and citizens.

Devils in the details! I'm not going to praise anyone on this until I know what's in the bill.

Senate Republicans pass budget that will add $1.5 trillion to deficit, slash Medicare

GOP leaders in advanced talks to change tax plan in bid to win over holdouts