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- The House passed the Senate’s budget resolution by a vote of 216-212. Passing the budget resolution allows Republicans to start on the fast track to their tax plan. Some GOP members were upset over a key provision.
The House passed the Senate’s budget resolution on Thursday by a vote of 216 to 212, in the last procedural step before the GOP can move to fast-track tax-reform legislation that’s expected to be unveiled next week.
Every Democrat voted against the bill, along with 20 Republicans.
Republican leaders succeeded with the vote despite some last-minute hand-wringing, since the Republican tax-reform framework proposes the elimination of the state and local tax deduction. The deduction allows people to shave off what they pay in state and local taxes from their federal tax bill.
By eliminating the SALT deduction, Republicans would offset a significant number of their planned tax cuts – saving $1.3 trillion over 10 years, according to an analysis by the Tax Policy Center.
But Republicans from high-tax states like California, New York, and Massachusetts, where many people take the deduction, expressed last-minute concerns about the elimination of the deduction. For instance, Rep. Frank LoBiondo of New Jersey tweeted that he would vote “no” on the budget.
Chris Krueger, an analyst at Cowen Washington Research Group, said there were enough members from these high SALT deduction states to block the budget.
“There are 52 House Republicans in the 24-seat majority who represent districts that over-index to the deduction (California, Illinois, New York, New Jersey, Minnesota, etc.),” Krueger wrote Thursday. “There is a core group (presumably enough to block the budget) who are threatening to withhold their votes on the budget if there is not a guarantee to protect SALT.”
Passing the Senate budget resolution was key for tax reform because the measure includes instructions for budget reconciliation. The reconciliation process allows a bill to pass the Senate with a majority of votes. Since the GOP only has a 52-seat majority in the Senate, reconciliation is key to avoiding a Democratic filibuster.
In the end, all California Republicans, and a handful of New York Republicans, voted yes.
Republicans celebrated the passage of the budget, including the president, who applauded the win on Twitter.
“Big news – Budget just passed!” Trump said.
In a statement following the vote, Rep. Kevin Brady, the House Ways and Means Committee chair, said the vote paves the way for the release on the full tax bill on November 1.
“Today is a historic day – and we are ready to deliver tax relief that improves the lives of middle-income Americans and struggling families who have been left behind in our slow-growing economy,” said the statement.