July 18, 2017 House Budget Committee releases FY2018 resolution The House Budget Committee on July 18, 2017, released its fiscal year 2018 budget resolution that includes reconciliation instructions for deficit-neutral tax reform and for at least $203 billion in mandatory savings and reforms over 10 years. The budget sets overall discretionary spending for FY 2018 at $1.132 trillion: $621.5 billion in defense discretionary spending; and $511 billion in non-defense discretionary spending. The Committee plans to mark up the budget resolution, which calls for $6.5 trillion in deficit reduction, tomorrow, July 19, with a full House vote expected as soon as next week. The release is significant from a tax reform perspective because, if the House and Senate agree to the same budget resolution, reconciliation instructions will allow tax reform legislation to pass the Senate with 51 votes rather than the 60 necessary to overcome a filibuster. During a news conference, Budget Committee Chairman Diane Black (R-TN) said the resolution is a "vital step to trigger reconciliation" and, while she expressed confidence about getting it out of Committee, said "we will be working all of the members and making sure that they understand the significance and importance about what we have put in this document" as it moves to the floor. Budget resolutions are non-binding, and a "blueprint" document released along with the legislative text — which alludes to the 2016 series of House Republican policy papers in calling for a "better way" than the status quo — makes clear that the budget cannot dictate to the Ways and Means Committee how tax reform should be done, nor can it dictate to authorizing committees what policies to include to achieve the $203 billion in savings. The document also said the Committee estimates "that the pro-growth policies of health care reform, tax reform, welfare reform, and deficit reduction assumed in our budget will yield economic growth of 2.6% on average over the 10-year budget window, resulting in $1.5 trillion in deficit reduction." Budget reconciliation instructions call for the Ways & Means Committee to produce deficit-neutral tax reform legislation that will reduce tax rates and simplify the tax code to boost economic growth. The resolution calls for "comprehensive tax reform legislation that promotes economic growth, creates American jobs, increases wages, and benefits American consumers, investors, and workers by — (1) simplifying the tax code to make it fairer to American families and businesses and reducing the amount of time and resources necessary to comply with tax laws; (2) substantially lowering tax rates for individuals and consolidating the current seven individual income tax brackets into fewer brackets; (3) repealing the Alternative Minimum Tax; (4) reducing the corporate tax rate; and (5) transitioning the tax code to a more competitive system of international taxation." The $203 billion in mandatory savings and reforms under the resolution are to come from 11 House authorizing committees, charged with reducing the deficit by the following amounts: (1) Agriculture, $10 billion On health care, the budget blueprint assumes the reforms included in the House-passed American Health Care Act (AHCA), proposes Medicare reforms to provide a "premium support" option that resembles the private insurance market, and calls for Medicaid reforms beyond what is in the AHCA to apply work requirements and enhance state flexibility. The resolution calls for $487 billion over 10 years in Medicare savings relative to current policy and $1.5 trillion from Medicaid and other health programs. The Budget also calls for welfare reform that includes tougher Temporary Assistance for Needy Families work requirements, changes to the Supplemental Nutrition Assistance Program — formerly known as the Food Stamp Program — and requiring verification of income before the Earned Income Tax Credit and Child Tax Credit are paid. Attached are the resolution, the budget "blueprint," a summary, and summary tables. ———————————————
——————————————— Building a Better America
FY2018_Budget Resolution
Budget Summary
Summary Tables
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