House Narrowly Passes Budget, But Trouble’s Ahead on Taxes

The House vote to cave to the Senate’s version of next year’s budget was too close for comfort for Paul Ryan, and is also a sign of trouble to come on the GOP’s tax bill. Photo: Mark Wilson/Getty Images

So belying all the happy-talk about what an easy-breezy vote this was going to be (one member of the leadership called it “the easiest whip I’ve ever had” earlier this week), the House passed the Senate’s version of the FY 2018 budget resolution by a very narrow 216–212 margin today. The vote represented an abandonment of the House’s own budget resolution, passed earlier this month, that included a pretty large cut in entitlement programs and zero additions to the budget deficit. The Senate bill had no entitlement cuts and provided for $1.5 trillion in new deficits over ten years. But most House leaders, including Budget Committee chair Diane Black and some of the more visible members of the House Freedom Caucus, decided avoiding a House-Senate conference and moving speedily on to tax cuts was more important than sticking to their chamber’s budget principles.

In the end, only eight of the House’s hard-core fiscal conservatives voted against the Senate-passed resolution. But what made the vote close was that 11 other members from New York (7 of the state’s 9 House Republicans) and New Jersey (4 of 5) joined a revolt against the possibility that the tax bill would eliminate the deduction for state and local taxes (SALT). A twelfth House Republican, moderate Brian Fitzpatrick of Pennsylvania, rounded out the rebellion. The no votes from high-tax, high-income states were not a good sign in terms of prospects for the actual tax bill this resolution authorizes.

According to Politico, Paul Ryan & Co. went into this vote a bit flippant about their New York/New Jersey problem:

[L]eadership suddenly postponed a negotiation session on the matter late Wednesday night, likely in a sign that enough opponents were appeased by a commitment to work toward a deal in the coming days on the state and local tax break.

They were right, but just barely. And now some scaling back of earlier plans to kill the SALT deduction altogether is going to be necessary if the final bill is to have a chance. But that’s a problem, too, because it’s one of the few big revenue raisers in the GOP’s arsenal. With the tax cuts Republicans want to enact costing something like $5 trillion, there’s a pretty big remaining deficit problem despite the $1.5 trillion the resolution allows.

It now seems appropriate to move the SALT problem to much nearer the top of the list of big issues congressional Republicans will have to solve to get their tax bill enacted. It seems that the willingness of most House conservatives to eat the millions of words they’ve uttered in the past about spending and deficits won’t be enough to avoid heartburn over this legislation, without which congressional Republicans will really look feckless.

House Narrowly Passes Budget, But Trouble’s Ahead on Taxes