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The other GOP stalemate on Capitol Hill: House budget gridlock imperils tax reform

President Trump is flanked to his left by House Ways and Means Committee Chairman Rep. Kevin Brady (R-Tex.) during a meeting with the House whip team at the White House on March 7. (Jabin Botsford/The Washington Post)

An old problem for congressional Republicans — passing a budget — has resurfaced with potential devastating consequences for President Trump’s legislative agenda.

A standoff between conservative and moderate House Republicans is threatening passage of the yearly budget resolution, as it did a year ago. This time, however, plans for an ambitious tax reform bill Trump has pledged to sign are hanging in the balance.

Conservatives are pushing for the budget to slash nondefense spending, including major entitlement revisions. They want to cut deeply into federal welfare programs they have long eyed. Moderates, meanwhile, want to negotiate spending levels with Democrats, as House Republicans have done since 2011, and keep the budget otherwise focused squarely on a tax overhaul.

The clash so far has put the annual process three months behind schedule, a crucial episode of legislative gridlock that has gotten less attention than the GOP’s stagnant health-care bill in the Senate.

It’s almost July, and House Republicans still can’t pass a budget

“This isn’t the budget; it’s the tax-reform budget,” Rep. Kevin Brady (R-Tex.), the chairman of the House Ways and Means Committee, said Friday. “It gives us the path to do the boldest tax reform in a generation.”

The budget resolution can set out special procedures, known as reconciliation, that allow the majority party to pass bills without fear of a Senate filibuster. But first, the majority party has to agree on a budget.

Twenty members of the Tuesday Group, a caucus of moderate House Republicans, warned House Speaker Paul D. Ryan (R-Wis.) in a letter Friday that the direction of budget negotiations were “extremely problematic” and “could imperil tax reform and once again lead to instability in the appropriations process.” They threatened to oppose any budget resolution that runs afoul of their concerns.

Ryan spokeswoman AshLee Strong said Friday that negotiations are ongoing. “House Republicans have made significant progress on budget decisions, and these family discussions will continue among the conference,” she said.

In recent weeks, the House Budget Committee has struggled to find an accord between hard-line fiscal conservatives who want to slash long-term federal spending, defense hawks who want an immediate boost for the military and appropriators who are wary of cutting too deeply into domestic programs.

Historically, the balance has been hard to strike. House and Senate Republicans passed a 2017 budget in January — nine months late — only after Trump won the presidency and lawmakers agreed to set aside their spending squabbles to start the reconciliation process to undo the Affordable Care Act.

Now the spending squabbles are front and center. Defense and deficit hawks reached an agreement to spend $621 billion on defense and $511 billion on nondefense programs in 2018, but negotiations have hung up on how much to cut from “mandatory spending.”

Conservatives want more than $200 billion in cuts, aimed largely at Medicaid; the Supplemental Nutrition Assistance Program, or food stamps; and Temporary Assistance for Needy Families, the main federal welfare program. They are also looking to influence the course of a tax overhaul by seeking language to ensure that a border-adjustment tax proposal favored by Ryan is not included and to allow for legislation that could bring in less revenue than current law. Brady and other key GOP leaders have indicated they want the tax bill to be revenue-neutral.

“What we need to do is make as many tax cuts as we possibly can to let people spend their money instead of Washington bureaucrats spending it,” said Rep. Mark Meadows (R-N.C.), chairman of the hard-right House Freedom Caucus.

The moderates, meanwhile, argue that the level of entitlement cuts are “not practical” and the conservatives’ demands would complicate the tax bill. Rep. Charlie Dent (R-Pa.), a co-chairman of the Tuesday Group, said tax revision is “difficult and complex enough without adding other issues.”

Moreover, the moderates argue the GOP spending numbers simply aren’t based in reality. The defense spending level floated by Republicans exceeds statutory caps established in the 2011 Budget Control Act, and busting them would require negotiations with Senate Democrats who have historically pushed for parity with nondefense spending.

“Far too much time and energy is being expended on this first launch that will go absolutely nowhere in the Senate,” Dent said. “Our members want to vote on the real budget agreement, not the fake one.”

The implications for a tax overhaul are definitely not fake, Brady said. In an interview taped for an episode of C-SPAN’s “Newsmakers,” airing Sunday, he insisted that Republicans remain on track to pass a budget and then to pass a major tax-reform bill by year’s end.

“Every issue we tackle is in the context of, does this move us toward tax reform?” he said. “Will this get us to that debate that happens once every 30 years? Does it clear the field to do that?”

Brady also suggested that, sooner or later, Trump would have to come off the sidelines to turn his tax agenda into reality.

“No one has more at stake in delivering tax reform for the American people than President Trump,” he said. “Without presidential leadership, tax reform just doesn’t happen. We know that from history.”

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