On October 26th, the House passed the Senate version of the FY18 budget resolution by a margin of four votes. Many Republicans had voiced concern over the budget levels and deficit increase, but the passage of this budget resolution was necessary for Republicans to move on to tax reform, and since this budget resolution is non-binding, many voted for it knowing that it would likely have little effect on 2018’s final appropriations. The approved budget resolution allows for tax cuts to increase the deficit by $1.5 trillion deficit using budget reconciliation, a special procedural rule that allows for certain budget-related bills to pass the Senate by a majority (50) vote. This makes tax reform filibuster-proof as long as Republicans keep their legislation within the reconciliation guidelines.
It is important to note that 7 of the 9 New York Republican representatives voted against the budget resolution along with representatives from other high tax states like New Jersey based on the House Ways and Means Committee’s proposal to eliminate the State and Local Tax (SALT) deduction. Only Rep. Reed (who is on the Ways and Means Committee) and Rep. Collins supported the budget resolution in New York. Since Republicans plan to pass tax reform with a simple majority vote, they cannot afford many defectors due to this one proposed elimination, so discussions regarding SALT compromise have begun.
The House Ways and Means Committee plans to release its tax reform legislation on November 1st and hopes to mark it up the following week and then pass it in the House before Thanksgiving. Beyond tax reform’s herculean schedule, Congress must raise the debt ceiling or approve another extension before December 8th in order to avoid a government shutdown. Congress will have to also have to either pass another Continuing Resolution (CR) or enact final appropriations bills before the current CR expires on December 8th.