Senate Passes Budget Proposal Primarily on Party Lines

By Natalie Andrews, Kristina Peterson and Richard Rubin Features Dow Jones Newswires

Senate Republicans adopted a budget for the next fiscal year, clearing a critical hurdle in the GOP push to overhaul the tax code.

Continue Reading Below

The Senate's late Thursday passage of the budget blueprint, in a 51-49 vote primarily along party lines, helps unlock a procedure that Republicans plan to use to rewrite the tax code with just GOP votes.

"Passing this budget is critical to getting tax reform done, so we can strengthen our economy after years of stagnation under the previous administration," Senate Majority Leader Mitch McConnell (R., Ky.) said on the Senate floor Thursday.

Budget resolutions are nonbinding and don't require the president's signature. They generally reflect the parties' priorities and are separate from the spending bills that actually fund the government.

"The only thing about this that matters is preparation for tax reform," Sen. Bob Corker (R., Tenn.), a member of the Senate Budget Committee.

The bill's passage capped a series of amendment votes Democrats used to drive home their argument that the GOP tax rewrite would benefit the country's wealthiest citizens at the expense of the middle class.

Continue Reading Below

"Looking at the GOP tax plan, the American people have to wonder: is now the time to tilt the scales even further in favor of big corporations and the very rich?" Senate Minority Leader Chuck Schumer (D., N.Y.) said on the Senate floor Thursday.

The Republicans released a framework last month that sketched out a range of tax changes -- including lower taxes on corporate profits, incentives for businesses, fewer and lower individual income tax brackets and the end of estate taxes -- with the goal of simplifying the code and boosting the economy.

The House passed its own budget earlier this year. White House aides and some Senate Republicans have been urging the House to simply take up the Senate budget and pass it. An amendment passed late Thursday allows the House to take up the Senate-passed bill version and avoids the need for a conference.

The Republicans have yet to release tax legislation. Sen. Orrin Hatch (R., Utah), chairman of the Finance Committee, said he hoped to release his tax plan by early November.

"Deficits matter, and the taxes that we address ought to be about growing the economy that actually create more revenues toward reducing the deficit," said Sen. Jerry Moran (R., Kan.).

The Democrats criticized the plan as a giveaway to the rich because a number of proposed changes, including lower business tax rates and a repeal of the estate tax, would benefit the top sliver of wealthy households. Before the budget passed, Senate Democrats proposed several amendments, most of which failed.

Sens. Maria Cantwell of Washington and Chris Van Hollen of Maryland forced a vote on whether to bar a tax rewrite from ending or limiting the federal deduction for state and local taxes. House Republicans are considering abolishing the popular deduction but may preserve part of it. The Senate blocked the amendment Thursday on a procedural motion in a party-line vote.

An amendment by New Mexico Sens. Tom Udall and Martin Heinrich to provide resources in rural communities to offset property-tax revenue lost due to the presence of tax-exempt federal lands passed with 58 votes.

The Senate also rejected, by a 7-93 vote, an amendment from Sen. Rand Paul (R., Ky.) that would have replaced the $1.5 trillion tax cut with a $2.5 trillion cut. Sen. Paul later voted against the budget.

The Senate voted down an amendment that would have prevented a future fast-track vote on Arctic drilling. On the 48-52 vote, Sen. Joe Manchin (D., W. Va.) voted with the Republicans; Sen. Susan Collins (R., Maine), voted with the Democrats.

Given the Republicans' 52-48 Senate majority, the absence early this week of Sen. Thad Cochran (R., Miss.) created some questions over whether Senate GOP leaders would have enough support to pass the budget. But Mr. Cochran, who had been recovering from health issues in Mississippi, returned to the Senate on Wednesday.

"We've got the walking wounded all coming back to vote," Sen. Lindsey Graham (R., S.C.) said.

Mr. Graham acknowledged that passing sweeping tax legislation would be more challenging than approving a budget. "We're at the bottom of the mountain and we've got to keep climbing to the top," he said.

Write to Natalie Andrews at Natalie.Andrews@wsj.com, Kristina Peterson at kristina.peterson@wsj.com and Richard Rubin at richard.rubin@wsj.com

(END) Dow Jones Newswires

October 19, 2017 21:55 ET (01:55 GMT)