Senate passes Trump’s budget, a first step toward contentious tax reform


Powered by Guardian.co.ukThis article titled “Senate passes Trump’s budget, a first step toward contentious tax reform” was written by Lauren Gambino in Washington, for theguardian.com on Friday 20th October 2017 01.37 UTC

The Senate has approved a multi-trillion dollar budget that Donald Trump has called a “first step towards massive tax cuts”, a largely symbolic move that sets the stage for Republicans to rewrite the US tax code without a single Democratic vote.

The Senate voted 51-49 to pass the budget resolution, a blueprint of trillions of dollars in federal spending over the next decade.

Passage of the resolution keeps Republicans on track to pass tax reform, though many hurdles remain. They are still in the process of drafting their tax plan and they have not accounted for where the cuts will come from.

Republicans, who control both chambers of Congress and the White House, are under mounting pressure to pass a tax reform bill after repeatedly failing to repeal the Affordable Care Act this year. Republicans have sold the plan as a “once-in-a-generation” opportunity to overhaul an outdated tax system while Democrats have called it “ Robin Hood in reverse”.

The non-binding resolution lays out Congress’ spending priorities over the next 10 years. But most importantly for GOP priorities, the measure unlocks a special parliamentary procedure that will allow Republicans to cut $1.5tn in taxes over the next decade with just 50 votes – as opposed to 60 – in the Senate, where they hold a two-seat majority.

After some uncertainty this week over whether they had the votes to pass the budget, Republicans were able to rally all but one member of their caucus behind the resolution.

In a floor speech on Thursday, Senate majority leader Mitch McConnell urged his caucus to support the budget, which he said was “critical to getting tax reform done”.

“Tax reform is all about getting American going again and growing again. It aims to take more money out of Washington’s pockets and put more money in middle-class pockets,” McConnell said. “And it represents a once-in-a-generation opportunity to replace a failing tax code that holds Americans back with one that works for them.”

This week, McConnell said the goal was to overhaul the tax code, a Republican priority, by the end of the year. But he also noted that it had taken President Obama more than one year in office to deliver on the Affordable Care Act, his signature domestic achievement, which he signed into law in March of 2010.

The Democrats have said the tax cuts would largely help the wealthiest Americans and have disputed the White House’s claim that corporate tax cuts would raise wages for the middle class.

Chuck Schumer, the senate minority leader, said the Republican tax plan “entirely divorced from the real problems in our economy and our society”.

“Our economy suffers from massive inequality – which is growing – a concentration of wealth at the very apex of our country’s elite,” Schumer said. “The rich are doing well in America. God bless them, I’m glad they are. And American corporations are recording record high profits – just look at the stock market, which reflects that. God bless them too, we hope they do well. But middle class incomes have not risen with the rise in corporate profits or record levels of wealth concentrated among the wealthiest families.”

Chuck Schumer with Senator Elizabeth Warren on Capitol Hill. Schumer called the Republican tax plan ‘entirely divorced from the real problems’.
Chuck Schumer with Senator Elizabeth Warren on Capitol Hill. Schumer called the Republican tax plan ‘entirely divorced from the real problems’. Photograph: Michael Reynolds/EPA

The final vote followed a lengthy ritual known as “vote-a-rama” in which senators can offer endless series of amendments, often intended to force members of the opposite party to vote on politically difficult legislation.

In that spirit, members were relatively conservative in their approach. The Democrats introduced amendments that Schumer said would “shine a light” on the Republican tax plan, including proposals that would block cuts to Medicare and Medicaid and ban tax breaks for the wealthy.

“The more people see of this tax bill, the less they will like it,” Schumer had predicted earlier this week.

The Senate budget plan will next need to be reconciled with the House’s version, which the chamber approved earlier this month. When the House and Senate agree to matching resolutions, attention will then shift to the House ways and means committee where congressional tax writers are drafting the bill.

Trump has promised a “giant, beautiful, massive tax cut” that would reduce the corporate tax rate from 35% to 20%, lowers the number of tax brackets from seven to three and cut taxes for middle-class families. Trump has denied his plan cuts taxes on the wealthiest Americans, but his interpretation is at odds with a proposal released by the White House

Treasury secretary Steve Mnuchin appeared this week to confirm that the White House’s plan, as drafted, would benefit top earners.

“When you’re cutting taxes across the board, it’s very hard not to give tax cuts to the wealthy with tax cuts to the middle class,” Mnuchin told Politico. “The math, given how much you are collecting, is just hard to do.”

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Senate passes Trump's budget, a first step toward contentious tax reform | NORTH INDIA KALEIDOSCOPE

Rajesh Ahuja

I am a veteran journalist based in Chandigarh India.I joined the profession in June 1982 and worked as a Staff Reporter with the National Herald at Delhi till June 1986. I joined The Hindu at Delhi in 1986 as a Staff Reporter and was promoted as Special Correspondent in 1993 and transferred to Chandigarh. I left The Hindu in September 2012 and launched my own newspaper ventures including this news portal and a weekly newspaper NORTH INDIA KALEIDOSCOPE (currently temporarily suspended).