Republicans are set to take their first legislative steps to advance tax reform, days after the clock ran out for plans to fulfill their pledge to repeal and replace the Affordable Care Act. The House is set to vote this week on a fiscal 2018 budget, which will pave the way for Republicans to pass tax reform by a simple majority and avoid a Democratic filibuster. The House Budget Committee advanced the budget in July, but it lacked the votes to pass on the floor due to reluctance from conservative Freedom Caucus members to move forward without a tax reform blueprint. The House budget would increase military spending and call for $203 billion in mandatory spending cuts, mostly to anti-poverty and agriculture programs, over the next decade.
The budget relies on certain assumptions in order to calculate that it will balance in 10 years, but none are guaranteed to actually happen. Economists critical of the plan have suggested it may be unrealistic to assume that the economy will grow at an average rate of 2.6 percent over the next decade.
The Senate GOP budget paves the way for $1.15 trillion in tax cuts. It excludes instructions for the Senate Health Committee, suggesting Republicans are putting off a large-scale repeal of the ACA. But it does include a "reserve fund" in case a committee decides to tackle some elements of repeal. Some major differences between the House and Senate GOP budgets will have to be reconciled before tax reform can move forward. The Senate budget would cut non-defense spending starting in 2019 and result in up to $106 billion by 2027. It would also only cut mandatory spending by $1 billion, compared to the House version’s $203 billion.
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