Politico

GOP budget would unlock special power for tax bill — with a catch

Written by Lisa

House budget leaders will unveil a fiscal blueprint Tuesday to launch the biggest tax code rewrite in a generation, but only if Republicans can simultaneously agree to steep cuts elsewhere.

To unlock Congress’ power to expedite tax overhaul this year, GOP lawmakers would need to slash billions from politically sensitive programs like food stamps, student aid and federal pension funds.

House Budget Chairwoman Diane Black (R-Tenn.) contends that her blueprint, unlike past budget documents, would serve more than a messaging purpose.

“Today, we are introducing not just a vision for our country, but a plan for action,” Black wrote in a statement. “With a Republican Congress and a Republican administration, now is the time to put forward a governing document with real solutions to address our biggest challenges.”

The ambitious plan calls for $203 billion in mandatory cuts, which would mark the largest amount of deficit reduction through the budget process in two decades. And forcing Republicans to combine their already-complex push for tax reform with massive funding reductions would be a risky maneuver.

Some GOP lawmakers have already said they are worried about the potential political attacks if they’re seen as cutting programs like Temporary Assistance for Needy Families to pay for billions in tax breaks.

The House Budget Committee is expected to approve the proposal Wednesday, though it remains unclear whether the plan would garner enough support to pass on the House floor.

The idea of mandatory spending cuts has already created tension within the fractious GOP conference. Nearly three dozen GOP centrists have balked at the idea of missing the chance for tax reform, while hard-line fiscal hawks have demanded even steeper reductions.

The blueprint would call for $203 billion in reduction from 11 committees that oversee large chunks of mandatory spending.

“I think this is a year where we can say we’re making progress. I’ve been here for almost seven years, and we have never done real deficit reduction,” Black told reporters earlier this summer. “I’m excited about that.”

The House Ways and Means Committee, which would do much of the GOP’s tax-writing this year, would be charged with finding the most mandatory savings — at least $52 billion. That could include cuts to programs like the Social Services Block Grant, Temporary Assistance for Needy Families, Supplemental Security Income or Disability Insurance.

The House Judiciary Committee would be tasked with the second-highest amount of savings, with a total of $45 billion — most of which would likely come from medical malpractice reforms. The Education and Workforce Committee, as well as the Energy and Commerce panel, would each need to produce $20 billion in savings, with another $10 billion from the House Agriculture Committee.

Meanwhile, the clock has been ticking down. This year’s House GOP budget markup will be the most delayed in recent memory, with the fiscal year ending in 11 weeks. The House is now less than two weeks from its summer recess, after which point a budget resolution would stand little chance of floor action.

Passage of a full GOP budget, which would require uniting the party’s most vocal military supporters and its fiercest fiscal conservatives, would be a decisive victory for Black. The first-term chairwoman, who has her eye on the Tennessee gubernatorial race next year, has spent months crafting a package to entice an increasingly divided GOP conference.

Plenty of Republicans, including some close to leadership, have remained skeptical about the required mandatory cuts, raising doubts that the budget resolution would survive the Senate.

Black has also packed the document with other conservative priorities that she hopes will be difficult for Republicans to resist in their first Trump-era blueprint, even if those ideas stand no chance of becoming law.

The resolution hews closely to conservative budgets of years past, including the Medicare premium support model popularized by now-House Speaker Paul Ryan (R-Wis.). It would also roll back large sums of Medicaid spending beyond the GOP’s effort to repeal Obamacare, while stripping hundreds of billions from anti-poverty programs across the federal government.

The conservative document would allow for revenue-neutral tax reform, while assuming a $1.1 trillion lower baseline from the House-passed Obamacare repeal.

Because its authors had to assume the loss of about $2 trillion in previous year’s savings from Obamacare repeal, this year’s document would have slightly rosier economic assumptions. The plan would predict a 2.6 percent growth in GDP, above the current 1.9 percent growth estimates from the Congressional Budget Office but lower than the 3 percent figure the Trump administration has projected.

Their fiscal 2018 plan would give a nod to President Donald Trump’s most vocal promise: Increased spending for the military and national security programs. But it would buck the president on his calls to preserve Medicare and Social Security.

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