House Republicans cleared a crucial hurdle in their drive to overhaul the tax code Thursday after narrowly approving the Senate’s budget.
By passing the measure, 216-212, Republicans unlocked procedural powers that allow the Senate to pass a tax bill with just 51 votes — and evade Democratic filibusters. But even with the ability to sideline Democrats, the GOP faces a daunting task as it tries to rewrite the tax code.
Heading into the vote, it was unclear whether enough GOP lawmakers would support the measure. A band of Republicans from high-tax states vowed to vote “no” on the budget unless GOP leaders scrapped plans to curb the state and local tax deduction currently in the GOP’s tax proposal.
Speaker Paul Ryan and his top lieutenants were banking, however, on enough Republicans being jazzed about tax reform to back a fiscal blueprint many despise.
“A ‘no’ vote, as we heard from our Democrat colleagues, is to block tax reform and defend the status quo,” Ways and Means Chairman Kevin Brady (R-Texas) warned on the floor before the vote.
Leadership had originally sought to come up with an agreement on the nearly $1.3 trillion state and local tax break before the Thursday vote — particularly after a host of allies like Republican Reps. Lee Zeldin of New York and Tom MacArthur of New Jersey said they would need to resolve the issue before backing the budget.
But leadership suddenly postponed a negotiation session on the matter late Wednesday night, likely in a sign that enough opponents were appeased by a commitment to work toward a deal in the coming days on the state and local tax break.
The vote was filled with drama on the House floor.
As the electronic House vote board began to fill out with “yeas” and “nays,” Republican holdouts like New York Rep. John Katko stood near House Majority Whip Steve Scalise (R-La.), watching the evolving tally as some waited until the last minutes to cast dissenting votes.
House Budget Chairman Diane Black (R-Tenn.), who kept her eyes on the board throughout the count, told POLITICO afterward that “we would have done what we needed to do to make sure we got that vote done.”
Leadership’s promise to work with angry lawmakers didn’t work for all naysayers.
“I am voting NO,” Rep. Frank LoBiondo (R-N.J.) tweeted Wednesday night, a promise he fulfilled Thursday. He was responding to a constituent asking him to oppose the budget and “a tax plan that favors the wealthy.”
The early ultimatums serve as a preview of the challenge that lies before GOP tax writers, even before legislative text of the tax bill is set for release next week.
Brady said that Republicans will introduce the bill on Nov. 1 and his committee will begin considering it on Nov. 6.
“I’m going to stay at the table, so is the leadership, with our New York and New Jersey lawmakers to try to find a solution where their taxpayers are better off after tax reform,” Brady said later on Thursday after meeting with GOP members from high-tax districts in those two states and others like California and Illinois.
Rep. Tom MacArthur (R-N.J.), one of 20 Republicans who voted against the budget, said at least 22 GOP House members stand together on the state and local tax issue. Dozens of others held their nose while voting yes for the budget, he added.
Delivering a pre-condition of his own, President Donald Trump tweeted Monday that there would “be no change” to the way 401(k) plans are taxed, even as key lawmakers said they are still considering alterations to the popular retirement plans.
“We might be debating the details of a tax reform plan that does not exist,” Rep. Rob Woodall (R-Ga.) complained on the floor this week, noting that the bill has yet to be unveiled.
Many Republicans have refrained from publicly making demands on the fledgling tax proposal, feeling political pressure to remain flexible in the interest of ultimately achieving a policy priority seen as make-or-break for the GOP.
The budget the House passed Thursday is a far cry from the version the chamber first approved earlier this month and is unlikely to have garnered sufficient support without the tax debate hovering over it.
The House’s initial plan, favored by fiscal hawks, would have required lawmakers to offset the costs of new tax cuts and to find $203 billion in extra savings from some welfare programs. But those requirements would not fly in the more moderate Senate, which passed its budget last week.
Under immense pressure to pass a tax reform bill by year’s end, Republican leaders struck a time-saving deal to forgo a formal conference committee to resolve differences between the House and Senate plans.
Although many House GOP lawmakers have derided that decision and complained about the final text, most rank-and-file Republicans still quickly resigned themselves to supporting the budget in order to move on to the GOP’s tax reform aspirations.
For their part, Democrats have seized on what they called the “hypocrisy” of fiscal conservatives backing a plan that would drive up the debt. The Senate budget envisions tax cuts that could add $1.5 trillion to the deficit over a decade.
“Republicans are always telling us how much they care about the deficit. But when it comes to giving their beloved tax cuts to their billionaire friends, they suddenly develop a convenient case of amnesia,” Rep. Jim McGovern (D-Mass.) said on the House floor as lawmakers teed up debate this week. “They say, ‘What deficit? Don’t worry, these tax breaks will pay for themselves.’”
Aaron Lorenzo contributed to this report.
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