Senate Republicans are preparing to at least partially abandon their quest to repeal the Affordable Care Act and pivot instead to a massive tax overhaul, according to draft budget legislation released Friday.
The budget document is a key precursor for any tax bill, setting out procedures that will allow the legislation to pass with a simple 51-vote majority rather than the usual 60-vote supermajority. According to the draft released Friday, the Senate Finance Committee and House Ways and Means Committee will have until Nov. 13 to draft tax bills that cost no more than $1.5 trillion in lost revenue.
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.”
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.