House GOP eyes budget passage that is key to tax debate

WASHINGTON — Republicans are focused on cutting taxes instead of deficits as they look to power a $4.1 trillion budget plan through the House on Thursday.

The 2018 House GOP budget promises deep cuts to social programs and Cabinet agency budgets, but its chief purpose is to set the stage for action later this year on a comprehensive Republican overhaul of the U.S. tax code. The tax overhaul is the party’s top political priority as well as a longtime policy dream of key leaders like Speaker Paul Ryan.

The plan calls for more than $5 trillion in spending cuts over the coming decade, including a plan to turn Medicare into a voucher-like program for future retirees, slash Medicaid by about $1 trillion in the next 10 years, and repeal the “Obamacare” health law.

“It’s a budget that will help grow our economy, and it’s a budget that will help rein in our debt,” said Ryan, R-Wis. “It reforms Medicaid. It strengthens Medicare.”

But Republicans are not actually planning to impose any of those cuts with follow-up legislation that would be required under Washington’s Byzantine budget rules. Instead, those GOP proposals for spending cuts are limited to nonbinding promises, and even a token 10-year, $200 billion spending cut package demanded by tea party House Republicans appears likely to be scrapped in upcoming talks with the Senate.

Instead, the motivating force behind the budget measures is the Republicans’ party-defining drive to cut corporate and individual tax rates and rid the tax code of loopholes. They promise this tax “reform” measure will put the economy in overdrive, driving economic growth to the 3 per cent range, and adding a surge of new tax revenues that would help bring the budget toward balance.

Passing the measure in the House and Senate would provide key procedural help for the tax measure because it sets the stage for follow-on legislation that can’t be filibustered by Senate Democrats. Republicans used the same so-called reconciliation procedure in their failed attempt to kill “Obamacare,” including its tax surcharges on wealthy people.

“Through reconciliation, our budget specifically paves the way for pro-growth tax reform that will reduce taxes for middle class Americans and free up American businesses to grow and hire,” said Rep. Diane Black, R-Tenn., who chairs the House Budget Committee.

The House vote comes as the Senate Budget Committee is considering a companion plan that differs in key details — and doesn’t promise a balanced ledger — and is set for a vote Thursday afternoon.

Both the House and Senate plans rely on rosy estimates of economic growth and illusory spending cuts to promise to wrestle the budget deficit under control.

The House measure also assumes that the upcoming tax bill won’t add to the deficit; the Senate version, however, would permit the measure to add $1.5 trillion to the $20 trillion-plus national debt over the coming 10 years. The final version is likely to stick closely to the Senate measure.

The real-world trajectory of Washington, however, is for higher deficits as Republicans focus on tax cuts, a huge hike in the defence budget, and a growing disaster aid tally that is about to hit $45 billion.

“The train’s left the station, and if you’re a budget hawk, you were left at the station,” said Rep. Mark Sanford, R-S.C.

Democrats blasted the sweeping spending cuts proposed by Republicans — $5.4 trillion over 10 years in the House plan and somewhat less in the Senate GOP measure — as an assault on middle-class families and the poor.

“The Republican budget … is a shockingly extreme document that gives to the rich and takes from everyone else,” said Kentucky Rep. John Yarmuth, D-Ky. “It calls for more than $5 trillion in spending cuts that threaten our economic progress and our national security, and it wilfully ignores the needs and priorities of the American people.”

“This is, like Yogi Berra said, ‘deja vu all over again.’ Republicans used their Trumpcare bill to sneak in tax cuts for the rich,” said Senate Minority Leader Chuck Schumer, D-N.Y. “Now they’re using their tax cut plan … and they’re sneaking in cuts to Medicaid and Medicare. But it’s the same playbook.”

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This story has been corrected to change the amount in the first paragraph to $4.1 trillion, not billion.

Andrew Taylor, The Associated Press