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Senate budget passage gets Republicans one step closer to tax reform

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The Senate voted 51-49 to approve a budget resolution on Oct. 19 that would allow tax writers to spend up to $1.5 trillion on tax reform bill using the reconciliation process.


Reconciliation is seen as key to tax reform because it would allow Republicans to bypass 60-vote procedural hurdles in the Senate and approve a bill with a simple majority vote. For reconciliation instructions to be effective, Republicans still need to reconcile separate House and Senate budget resolutions. The House passed its resolution on 219–206 vote earlier this month.

There are some big differences in the two versions. The Senate resolution included reconciliation instructions allowing a tax reform bill that loses up to $1.5 trillion. The House reconciliation instructions require $200 billion in deficit savings.

Republicans leaders appear confident they will be able to resolve the two versions. Many members view the budget largely as a vehicle for tax reform and are less likely to haggle over budget policy disagreements. Republicans are expected to use the Senate reconciliation number. But the House may not be willing to accept the entire Senate budget without any changes, so Republicans could convene a formal conference committee. They hope to have a final version passed in less than two weeks.

House Ways and Means Committee Chair Kevin Brady, R-Texas, is close to finishing the legislative language on a full tax reform bill, but is waiting for the final budget agreement before he officially introduces it.

Contact
Dustin Stamper
Director, Washington National Tax Office
T +1 202 861 4144

Shamik Trivedi
Senior Manager, Washington National Tax Office
T +1 202 521 1511


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