The House voted Tuesday to pass a budget resolution that served as a blueprint for the GOP's domestic agenda, extending the 2017 tax cuts at the Center.
The bill managed to clear the majority of the GOP's razor-thin home, but the roadmap it laid out for the reconciliation process will avoid democratic filibusters in the Senate, allow party line votes, and face opposition on multiple fronts. The obstacles are installed both at and outside the GOP meeting.
“We are working to codify President Trump's agenda. We cannot allow future administrations to unleash all of these important reforms,” spokesperson Mike Johnson (R-La.) said Tuesday.
The five hurdles facing GOPs are as they seek to cut taxes and advance other parts of the agenda, including increasing fossil fuel extraction and suppressing transitions.
Budget cuts and Medicaid
According to the official legislative scorer, the Trump tax cuts, which expire at the end of this year, will cost $4.7 trillion over the next decade.
That number doesn't take into account the additional tax cuts Trump proposed during his campaign. These measures include tax credits for family caregivers, cancellation of tips taxes and overtime pay, tax exemptions, and creating special deductions for interest on loans taken for car purchases.
Some estimates suggest that it could cost as much as $7 trillion to help pay for all these cuts, but Republicans are aiming to cut $2 trillion from the budget, with almost half of that coming from the House Energy Committee, which hosts Medicaid.
“That's where money is,” Energy Commerce Committee member Russ Fulcher (R-Idaho) told Hill.
Medicaid cuts are also a stumbling block for GOP moderates and conservatives, who represent districts that make full use of federal healthcare programs. Medicaid is also ranked favorably in polls, with healthcare reducing difficult sales with voters. In a recent poll from a joint left-leaning groundwork nonprofit, 79% of respondents had a positive view of Medicaid.
On the other side of the spectrum, the GOP Budget Hawk is demanding a greater deficit reduction from the settlement package.
“They convinced me there. I'm 'no',” Rep. Thomas Massey (R-KY.) said Tuesday morning after meeting with Republicans. “If the Republican plan passes, under the cutest assumption, that's not true. We'll add $328 billion to the deficit this year.”
Salt deduction cap
The state and local tax (salt) deduction cap is one of the most troublesome tax issues within the Republican Congress. This deduction is popular among Democrats and Republicans in the Blue State of High Tax, allowing for greater amortization for high-income earners.
Trump on the campaign trail said he would work to “recover the salt” and suggested he would support the removal of the $10,000 limit on the deduction introduced as part of the 2017 tax cut. Remove the cap and could add a trillion dollars to the deficit.
Various increases have been proposed for caps. This would double to $20,000 or promote to $30,000, but there are no concrete plans yet.
“We work through that,” Rep. Mike Lawler (RN.Y.) told Hill earlier this month. “It's all part of the negotiations, but the president made it very clear that it's a priority for him. It's on his tax priorities list.”
Budget Accounting Pushback
The House budget resolution caps the amount that GOP tax cuts can add to the deficit at $4.5 trillion in the 10-year budget window. That's not the cost of Trump's tax cuts, part of the GOP tax cut agenda, at $4.7 trillion.
“Let's just say that the 10-year extension of President Trump's expiration clause is over $4.7 trillion, according to the CBO. Jason Smith (R-Mo.), chair of the House Ways and Mean Committee, criticised the House Budget resolution earlier this month, said House Ways and Mean Committee Chairman Jason Smith (R-Mo.).
For a paper over the potential for a deficit to grow, Republicans are trying to sell two alternative accounting methods that will reduce the number of toplines. One is called working from a “policy baseline” in contrast to legal baselines, assuming that the 2017 tax cuts have not expired and that GOP efforts have not wiped out the costs to expand them.
Sen. Bill Cassidy (R-La.) submitted an amendment last week in Senate Budget Resolution Week, which calls for surprising references to this type of accounting, and Rep. David Schweikert (R-Ariz.) calls it intellectual fraud.
Another termed dynamic scoring takes into account macroeconomic growth caused by tax cuts. Tax experts say changes to corporate taxes can stimulate production levels, but few believe that individual tax cuts will have the same impact.
“Everyone in my profession agrees with me… 99.9% of economists don't believe it grows to the point that it offsets any costs,” Martin Sullivan, chief tax analyst, told Hill last year.
The Senate is driving its own laws
The Senate is moving forward with a two-track legislative plan for the GOP Agenda. Senate Republicans want to split the agenda into two settlement bills. The first focuses on energy and fossil fuel extraction, while the second focuses on border security measures and the second on tax cuts.
The budget adjustment bill can take the law with a simple majority, but it is a time-consuming legislative vehicle with additional procedural and content restrictions, making it difficult to put multiple laws in a year.
Trump has repeatedly approved a House plan to pass the GOP agenda in one bill, but the Senate is still pushing for the law. The GOP Senator told homes who don't want to simply extend Trump's tax cuts in 2017.
“We've always been rooting for a successful home and we understand that their plans will take longer to enact,” an aide to the GOP Senator told The Hill. “In any case, the Senate's targeted budget resolution is ready and ready.”
Democratic opposition
Republicans face so many internal conflicts, and have given Democrats some overtures about leaving Democrats with some of the tax cuts. Earlier this year, Trump said he was working with Democrats on the 2017 tax cut extension, claiming that their expiration was bad for Democrats as well as Republicans.
Democratic leadership and top democratic tax writers, including House minority leader Hakeem Jeffries (NY), have expressed skepticism about Republicans' willingness to work across the aisle in a viable, bipartisan tax package.
Jeffries wrote to his colleagues on Monday ahead of the possibility of a GOP voting to keep out democratic opposition to the GOP budget resolution.
“It's essential that we have the biggest attendance given the expected proximity of the vote,” Jeffries wrote. “We need to have full power to strengthen our opportunities to stop GOP tax fraud on that truck.”
