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House and Senate budgets clear path for devastating tax and spending cuts

House and Senate budgets clear path for devastating tax and spending cuts


Thursday, October 5 marked two major steps in the budget process: the full House passed a budget resolution, and the Senate Budget Committee approved a budget resolution to go to the full Senate. The two versions would both pave the way for fast-tracking tax and spending cuts. These new moves maintain and deepen our concern about the budget proposals' potential for decimating social programs.  

Both budget proposals include direct attacks on social programs by requiring devastating cuts. The Senate budget proposal includes a broad requirement of $4 trillion in cuts to domestic programs, offering minimal detail as to where those cuts would be made. However, the House budget, which aligns with previous Republican proposals, offers insight: it outlines $3 trillion in cuts to programs for low-income Americans, coming from mandatory basic assistance programs, like SNAP and Medicaid, and discretionary domestic programs, like education, job training, and housing assistance. The proposal requires another $1 trillion in cuts to non-defense discretionary programs that affect every American, including education, job training, infrastructure, law enforcement, and more. 

But just as important, both budget proposals include provisions allowing for the fast-tracking of the deeply troubling tax cut plan released by the Trump Administration, along with Republicans on the House Committee on Ways and Means and Senate Committee on Finance. Both budgets contain the tool required to speed up passage: reconciliation.  

Reconciliation is a tool that expedites the consideration process for legislation related to debt, taxes, and spending. The effects of reconciliation are felt most acutely in the Senate. Under reconciliation instructions, senators are able to bypass typical rules that slow down the legislative process, like the filibuster and amendment process. These directives severely limit the length of debate, and allow legislation to pass by only a simple majority, rather than the 60 votes usually required. These measures effectively allow the controlling party to act without any support from the minority, eliminating the need for compromise. When used to ram through controversial and deeply partisan legislation, reconciliation seriously infringes on the cherished American principle of minority rights 

Senate Republicans used the reconciliation process when attempting to repeal the Affordable Care Act over the last year. Under the upcoming budget resolution, Congress is most likely to focus reconciliation on passing tax cuts. 

The administration’s new tax proposal would give massive tax cuts to the wealthy at the expense of the middle and working classes. Much of the potential for danger within the tax proposal stems from its price tag: $1.5 trillion. This huge cost might be more palatable if the proposal were revenue neutral, or, in other words, would pay for itself. However, the reconciliation instructions for tax reform in the Senate budget resolution, which will likely form the basis of the instructions that are eventually passed into law, state that the bill is allowed to increase the deficit by up to $1.5 trillion over 10 years. This huge deficit increase would likely serve as an impetus in the near future for the type of major spending cuts seen in the House budget.  

Given this array of concerns, we will continue to track the budget process as it unfolds over the next few weeks. The Senate is currently on recess, but will turn to the budget resolution when it returns, potentially passing its budget resolution as early as next week. The two chambers will likely go to conference on the two versions in late October, paving the way for Congress to dive into tax reform. Because the released tax plan is only a framework, many of the details are yet to be decided, and there is potential for significant changes. The Senate version of the reconciliation instructions set November 13 as the deadline by which each chamber must draft its tax bill. Throughout this entire legislative process, the RAC will ensure lawmakers know that we vehemently oppose any budget or other fiscal measure that attacks the most vulnerable Americans. 

Published: 10/09/2017