House passes 2018 budget plan, setting stage for tax reform

Republicans powered their 2018 budget through the House on Thursday, overcoming months of disagreements and taking the first concrete step in their quest to pass a massive tax reform by year’s end.

The blueprint sets discretionary spending for the new fiscal year at about $1.1 trillion, and projects a $472 billion deficit in 2018 — though it says that a combination of future spending cuts and economic growth can get the budget to balance in 10 years.

But the main goal of the non-binding document is to set up a fast-track procedure that will allow Republicans to advance their planned tax code overhaul with a simple majority in the House and Senate, bypassing a potential filibuster.

The House passed the plan on a 219-206 vote that broke almost completely along party lines. No Democrats voted yes, and 18 Republicans joined 188 Democrats to vote no.

“It paves the way for historic tax reform,” House Speaker Paul D. Ryan said in a floor speech Thursday. “We need to pass this budget so that we can deliver real relief for middle-income families across this country.”

Mr. Ryan also said the budget will help rein in the country’s ballooning national debt, strengthen national defense, eliminate “mindless, endless spending” and maximize taxpayer dollars.

The House budget plan calls for a tax overhaul that doesn’t add to federal deficits. The Senate plan, which is advancing through committee Thursday, clears the way for tax reform that adds up to $1.5 trillion to deficits.

Though budgets are often little more than messaging documents, the process this year has taken on particular significance because of its connection to health care and tax reform, two of the GOP’s top legislative priorities.

Republicans had passed their 2017 budget plan that included the fast-track tool, known as reconciliation, as they tried unsuccessfully to pass an Obamacare repeal package with a simple majority in the House and Senate.

But the spending levels in both the House and Senate plans stand little chance of actually becoming enacted. The House’s planned $621.5 billion for defense spending in 2018 busts through a mandatory spending cap laid out in the 2011 Budget Control Act, and Democrats say the non-defense spending levels in both blueprints are much too small.

Though lawmakers have lifted the caps in the past, it takes 60 votes in the Senate to change the law, and Democrats have said they’ll demand increases to domestic spending levels for social programs if defense hawks insist on the increase.

Democrats, meanwhile, attacked the plan as a giveaway to the wealthy and say that the GOP’s planned tax cuts won’t produce nearly as much economic growth as they’re estimating.

“This is all about moving the ball forward so we can push through a massive tax cut to the wealthiest Americans with 51 votes in the Senate,” said Rep. John Yarmuth, Kentucky Democrat and ranking member on the House Budget Committee.

“That’s what this day is about. That’s what this process is about,” he said.