WASHINGTON — With the latest stalled effort to repeal and replace Obamacare, congressional Republicans are beginning to look to the budget, tax reform and other big ticket legislative items to bolster their credibility ahead of August’s traditional recess.
But the same infighting that has sunk health care reform could also hinder progress on the $4 trillion budget, which not only lays out the government’s spending plan but is also a crucial first step as part of House Speaker Paul Ryan’s plan to overhaul the nation’s tax code.
The House Budget Committee approved the budget Wednesday, just days after they formally unveiled it. The document includes slashing $203 billion in funding next year from mandatory programs such as food assistance for the poor and unemployment benefits. Those cuts were engineered to win the support of more conservative members.
“The goal of the budget committee is to return to the traditional budget process and the true purpose of reconciliation — deficit reduction through mandatory spending reforms,” budget committee chair Diane Black, R-Tenn., said Wednesday at a hearing on the budget bill. “This is a first step, but it is an important one.”
Those cuts could cause more moderate members to waiver, however, with some members fearful of running for reelection in 2018 in Democratic-leaning districts.
“I have serious concerns about the budget in its current form,” Rep. Charlie Dent, R-Pa., said.
Dent is a co-leader of the House Tuesday Group, a coalition of more moderate Republicans, and his group has called for increasing the amount of discretionary spending — including education and transportation programs — in an effort to pass a budget in a bipartisan manner.
“Absent such a bipartisan, bicameral agreement, we are reticent to support any budget resolution on the House floor,” the group wrote in a letter to Black shortly after the budget was unveiled Monday.
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The most conservative House members have signaled that they feel the $203 billion cut is not enough and would like to see spending pared down even further.
“It’s still short of what it needs,” Freedom Caucus chair Rep. Mark Meadows, R-N.C., told reporters Tuesday, adding that he doesn’t think the budget has the votes to pass.
If the roughly 30-member Freedom Caucus opts to oppose the bill, it is likely that Ryan would need to win over at least some Democratic support. If Democrats are unified against his budget, Ryan could afford to lose only 23 GOP votes.
In the Senate, a similar divide between moderate and conservative members led to the Obamacare negotiations repeatedly faltering, though a health care bill squeaked by in the House.
But the House budget has cleared its first hurdle with even the most conservative members voting to move the bill out of committee Wednesday night. This paves the way for a vote as soon as next week, before House members head back to their districts for the month of August.
One reason Ryan is hoping conservatives will eventually rally around the document is that approving a budget is a key step in paving the way for tax reform, a top priority for Republican leaders.
In the past, the speaker has advocated a “border adjustment tax” that would subject imports to the corporate tax rate, while exempting exports. Ryan and his allies have called this an important step to encourage domestic manufacturing. President Trump has sent mixed signals about the proposal.
But many conservative legislators and interest groups have come out sharply opposed to the border adjustment tax, arguing that it would result in higher prices for consumers. This means that, unless Ryan backs down on one of his key provisions, tax reform could be as messy as health care.
“I remain concerned about what tax reform will look like,” Rep. Mark Sanford, R-S.C., said Wednesday during the budget hearing. “And I hate to sign off on this [budget] as a vehicle for tax reform and we get a form of tax reform I don’t believe in. And for me that would include the border adjustment tax.”
This division was on full display Wednesday night, when Sanford attempted to insert an amendment into the budget that would block consideration of the border adjustment tax going forward. Black quickly nixed the proposal, saying it violated committee rules, but the showdown shows that Ryan still has not appeased some of his members on the issue.
In the meantime, the potential stalemate would boost criticism from Democrats that congressional leaders are unable to pass meaningful legislation.
“Their inability to get anything of major substance passed here on their own is startling to me,” Rep. Joe Crowley, D-N.Y., told reporters Wednesday.
But Ways and Means chair Rep. Kevin Brady, R-Texas, said discussions were ongoing about what tax reform would look like. He added that the impetus to move that initiative forward will push more conservative members to approve a budget.
“I’m confident there are 218 Republicans in the House who came here to do bold, pro-growth tax reform and they know we can’t do it together until we have a budget and reconciliation,” Brady told reporters Thursday.
Additional reporting by Liz Goodwin.
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