House narrowly passes budget, moving one step closer to tax reform

The House on Thursday narrowly approved a Senate version of the 2018 federal budget, clearing the way for the GOP-controlled Senate to pass a massive set of tax cuts later this year.

By passing the Senate version of the budget, House Republicans kick-started the reconciliation process, a window during which the Senate can pass legislation with only a simple majority, instead of the 60 vote supermajority typically needed to end debate and move a bill to a vote.

Yet signs of the fight looming on Capitol Hill over how to pay for the $ 1.5 trillion in tax cuts were already visible Thursday, when a number of Republicans from states with high state taxes voted against the budget bill.

These members hoped that by stalling the tax-reform process, they might gain enough leverage to protect a popular deduction for state and local taxes, known as the SALT write-off. The current GOP tax framework calls for eliminating the SALT deduction to help pay for the tax cuts.

But this would likely have a disproportionate impact on middle-income taxpayers in places like New York, New Jersey and California, and as of late Wednesday, it was still unclear how many of the 30 Republicans who represent high-tax states would vote against the budget.

“Why should I vote for something that would end up decimating my district?” Rep. Peter King, R-N.Y., told Reuters on Wednesday.

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