The Senate adopted a fiscal 2018 budget resolution Thursday night that was amended at the 11th hour with the aim of making it acceptable enough to House Republicans to avoid a conference committee and speed the consideration of a tax overhaul.
The budget was adopted 51-49.
An amendment offered by Senate Budget Chairman Michael B. Enzi would modify the House-passed budget resolution by incorporating a number of changes needed to expedite the tax overhaul work in the House.
The Senate approved the amendment, 52-48.
The Senate-adopted budget is an amendment to the House-adopted budget. The House could take up the legislation and adopt it when it returns next week, triggering the next stage in the reconciliation process when the House Ways and Means Committee would mark up a tax overhaul with the goal of passing it and sending it to the Senate.
The amendment by Enzi, a Wyoming Republican, ensures that the only reconciliation instruction applicable to the House is for Ways and Means to overhaul the tax code.
The Senate budget retained a reconciliation instruction to its Energy and Natural Resources Committee directing the panel to produce legislation to reduce the deficit by $1 billion, seen by many as a vehicle for opening the Arctic Wildlife Refuge to drilling.
The House-led changes would speed up the tax overhaul process by two to three weeks, a Republican aide said.
House GOP leaders believe the changes will make the Senate budget more palatable to their members and eliminate the need for a conference committee, which they estimate could have taken up to two weeks.
The changes will also allow the tax overhaul bill to skip the House Budget Committee, where a markup would normally be needed to comply with reconciliation rules, and instead move straight from a Ways and Means Committee markup to the floor. That would save one week.
The Ways and Means panel is instructed to report out a tax bill by Nov. 13. Although the deadline is nonbinding, Speaker Paul D. Ryan has said he expects the House to send the tax bill to the Senate in early November.
Even as the House voted to adopt its version earlier this month, Republicans in that chamber were already resigned to supporting something much closer to what the Senate produced, dropping the House’s proposal for steep mandatory savings while adding the Senate’s allowance for up to $1.5 trillion in net tax cuts.
Greasing the wheels
Under the Senate resolution, the Finance Committee would be asked to write a tax cut that increases the deficit by up to $1.5 trillion over a decade.
The budget the House adopted earlier this month contains reconciliation instructions directing the Ways and Means Committee to write a tax bill that is deficit-neutral, meaning that tax cuts would have to be offset with other tax increases or with spending cuts. In fact the House version instructs Ways and Means to reduce the deficit on net by $52 billion over a decade. That provision was dropped in the amendment Enzi offered, with House leadership’s blessing.
While the House can take advantage of dynamic scoring to help make its tax bill balance, that form of cost estimation that calculates the effect of a bill on economic growth may not be possible in the Senate because of that chamber’s unique rules.
GOP senators acknowledged they see the sole purpose of the budget as providing a path to a tax cut through the reconciliation process, which would permit a tax bill to pass with a simple majority in the Senate.
Several senators noted that the discretionary toplines in the plan — which would limit fiscal 2018 defense spending to $549 billion and nondefense to $516 billion — have little meaning since most Democrats as well as Republicans see those limits as too low.
Senate Armed Services Committee John McCain railed against the defense limit, saying constraints on military spending are partly responsible for a rash of training accidents have killed dozens of troops.
“We have seen the steady degradation of the military,” the Arizona Republican said. “The strain of constant operational tempo, combined with inadequate and unstable funding has over the past 16 years worn down the greatest military in the world.”
McCain said the only solution is for Congress to negotiate a bipartisan deal to raise the cap on defense spending. GOP and Democratic leaders and the White House have begun to negotiate a deal to raise the defense and nondefense caps, likely for two years, people with knowledge of the talks told CQ.
Meanwhile, Kentucky Republican Rand Paul alone among the caucus threatened to vote against the budget over his opposition to war funds that would are estimated to cost $43 billion in fiscal 2018 outlays.
Paul’s amendment to cut an equal $43 billion in discretionary spending in fiscal 2018 was rejected on a 5-95 vote. Another Paul amendment, which was defeated 4-94, would have added reconciliation instructions to nine authorizing committees directing them to reduce the deficit or cut spending by $97.9 billion in fiscal 2018 alone.
Lindsey McPherson and Niels Lesniewski contributed to this report.Correction Oct. 20, 10:50 a.m. | An earlier version of this story misstated the dollar amount of the deficit reduction included in a reconciliation instruction aimed at the Senate Energy and Natural Resources Committee.