Senate Narrowly Approves Budget, an Ostensibly Easy Hurdle on the Road to Tax Cuts

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A rare good day for McConnell. Photo: Andrew Harrer/Bloomberg via Getty Images

After failing to pass any major legislation since President Trump took office, Republican senators finally scored a victory on Thursday night when they approved a budget blueprint that will allow them to a pass tax cuts that add up to $1.5 trillion to the deficit over the next decade. Plus, they’ve struck a deal that resolves differences between the House and Senate versions of the legislation, significantly speeding up their push for tax reform.

But when you scratch the surface, there are many reasons Republicans should still be extremely concerned about their effort to deliver a bill to President Trump by Christmas — which is quite an ambitious timeline.

Since Democrats aren’t going to help them pass large tax cuts for corporations and rich people, Republicans have turned to budget reconciliation, as they did with their failed Obamacare push. That allows them to pass tax cuts with just 51 Republican votes, but they have to follow a multistep legislative process that’s even more convoluted than usual.

As Vox’s Tara Golshan explained, enacting tax reform is a four-step process, and passing a budget resolution is the first and the easiest. While the budget resolution proposed various spending and entitlement cuts over the next decade, it was widely acknowledged that the vote was just about setting the stage for passing tax cuts via reconciliation.

“This budget is a sham. It’s a fraud that’s been perpetrated for the last 43 years since the Budget Act of 1974,” said Republican senator David Perdue. “The only reason we’re doing the budget like this, 18 days after the beginning of our fiscal year, is to get to a vehicle to get tax done this year.”

The budget reconciliation was expected to pass, but the vote was a bit more suspenseful than it should have been, since a few GOP senators are ill and/or on the outs with President Trump. It passed during Thursday night’s “vote-a-rama,” 51 to 49. Senator Rand Paul, who demanded bigger spending cuts, was the only Republican to vote no. Republicans can only afford to lose two votes, and Paul wasn’t the only senator to suggest it will be hard to win his support for whatever tax bill eventually emerges:

Republicans did make significant progress on another front. The House and Senate GOP leadership reached a deal on Thursday and amended the Senate version of the bill to make it acceptable to House conservatives. While the House version called for $203 billion in spending cuts and a deficit-neutral package, Politico reports that they accepted the Senate’s $1.5 trillion deficit increase.

After the Senate passed the budget resolution, House Speaker Paul Ryan said it keeps the GOP “on the track to enacting historic tax reform,” suggesting the House will take up the Senate bill rather than demanding a lengthy conference committee to address differences between the House and Senate legislation.

All of this only clears Republicans to take up the really hard part of tax reform: actually writing a tax bill. Republicans have been meeting behind closed doors to debate the details of the legislation for weeks, but there are key questions — and significant math errors — that haven’t been resolved. GOP leaders promised to hold hearings on the legislation (unlike what occurred during the Obamacare repeal push) and the bill also has to be evaluated by the Congressional Budget Office and the Senate parliamentarian.

Doing all that while losing no more than two GOP votes in the Senate and keeping the various House Republican factions in line still seems like a tall order. Getting it done by December sounds even more impossible, but during a speech this week, Trump reiterated his goal. “Let’s give our country the best Christmas of all: massive tax relief,” he said.

Luckily, Republican lawmakers can count on a president who’s focused and deeply engaged in the process. Just look at all the encouragement he offered senators on Tuesday night as they were voting to advance his tax plan:

Senate Approves Budget, an Easy Hurdle on Road to Tax Cuts