The House passed the Senate version of the FY18 budget resolution by a close vote of 216-212 on October 26, allowing Republicans to move their tax plan. A group of Republican representatives from high tax states like New York and New Jersey voted against the measure based on the current tax plan’s proposal to eliminate the state and local tax break. Plans to negotiate these differences were postponed once Republican leadership was assured they had enough votes to pass the resolution. While a budget resolution is nonbinding and is not signed by the president, it is a necessary step that Republicans must take if they hope to enact tax reform legislation with a simple majority.
While the original House budget resolution had called for deficit-neutral tax reform legislation, the Senate version allows for tax cuts that would increase the deficit by $1.5 trillion. The resolution also proposes unspecified cuts to safety net programs, but it does not provide reconciliation instructions to require these cuts. Democrats warn that increasing the deficit in this way will lead to deep spending cuts to important domestic programs, including affordable housing and community development programs.
The budget resolution also sets spending limits for FY18, but these figures carry little political weight since the budget resolution is non-binding and any final appropriations bill needs 60 votes to be enacted. Congress must pass another Continuing Resolution (CR) or enact its final spending bills when the current CR expires on December 8. NLIHC and other national leaders have called on Congress to lift the spending caps for defense and domestic programs equally and to fully fund affordable housing programs at HUD and USDA.