Republicans believe they will offset that lost revenue with increased economic growth prompted by the tax plan. The Senate GOP budget is set to balance in 10 years, assuming average economic growth of 2.6 percent — the same assumption made in the pending House budget, according to the draft.
That growth estimate is lower than the 3 percent figure assumed in President Trump’s budget proposal but still considerably higher than the 1.9 percent estimated by the nonpartisan Congressional Budget Office.
The Senate Energy and Natural Resources Committee will also receive instructions to submit legislation under the special “reconciliation” process, allowing it to be wrapped into the tax bill. The draft resolution will ask that committee to identify at least $1 billion in deficit savings. That is widely seen as a pathway to open the Arctic National Wildlife Refuge to oil and gas drilling — a key priority for the panel’s chairman, Sen. Lisa Murkowski (R-Alaska).
The budget does not direct the Senate Health, Education, Labor and Pensions Committee or the House Energy and Commerce Committee to draft legislation — a signal that Republicans are stepping aide, for now, from their abortive health-care efforts. The Senate Finance and House Ways and Means committees have jurisdiction over some health-care matters, mainly tax-related, but they do not oversee insurance regulations or the Medicaid program — which are both major parts of the GOP health bills drafted thus far.
The draft budget resolution is set to be passed through the Senate Budget Committee next week, setting up floor action early next month.
Sen. Mike Enzi (R-Wyo.), the budget panel’s chairman, said in a statement that the draft budget is “the first important step in providing Congress with the tools it needs to enact tax reform that will grow America’s economy and strengthen hardworking families and small businesses.”
“A pro-growth tax plan will move the U.S. economy forward, and help to produce better jobs and bigger paychecks for every American,” Enzi added. “It will also bring down tax rates across the board and enhance America’s competitiveness around the globe.”
White House Budget Director Mick Mulvaney also called the draft budget “a critical step to advance President Trump’s agenda to provide tax relief for the middle class and unleash economic prosperity for all Americans.”
“I urge the Senate to pass this resolution and come to a swift agreement with the House so President Trump can sign America-first tax relief into law this year,” Mulvaney said.
Senate Minority Leader Charles E. Schumer (D-N.Y.), meanwhile, called it “the clearest sign yet that Republicans are intent on pursuing a tax plan that would blow a huge hole in the deficit and stack up debt, leading to cuts in programs that middle-class Americans rely on.”
“This budget would green light a tax scheme that could very well put Social Security, Medicare and Medicaid on the chopping block,” Schumer said.
The Senate budget resolution ultimately must be reconciled with the House version, which passed though that chamber’s Budget Committee in July with reconciliation instructions mandating $200 billion in spending cuts. The House is expected to pass that budget legislation next week, setting up a conference between the chambers.
The Nov. 13 deadline to draft a tax bill is guideline, not a firm deadline. The fiscal 2017 budget resolution asked the relevant committees to draft a health bill by Jan. 27, but legislation was not passed through those panels until early March.