House GOP Releases $1.132T Budget Plan for Fiscal Year 2018

Party priorities

The plan released on Tuesday as part of the House Budget Committee's 2018 Budget resolution blueprint calls for consolidating tax brackets and cutting rates, repealing the alternative minimum tax and switching the USA from a worldwide tax system to a territorial tax system, which would tax only the domestic income of corporations.

In the wake of the collapse of the GOP's efforts to repeal and replace the Affordable Care Act this week, adopting a new budget resolution is a vital first step by the Republicans in enacting major individual and corporate tax cuts that President Trump and Republican leaders promised voters previous year. Conservatives want a larger package of spending cuts to accompany this fall's tax overhaul bill, while moderates are concerned cuts to programs such as food stamps could go too far. For the past eight years, the budget has only been a vision.

Those cuts would be tied to a Republican tax reform proposal that, in early proposals, eliminates the deduction for state and local taxes - one that's especially beneficial to New Yorkers, given the state's high tax rates. But to push a Republican-only approach through Congress, the GOP first has to get a budget resolution through the Congress.

Many of President Donald Trump's promises to "drain the swamp", including significant tax reform, hang on the budget plan Republicans eventually agree on.

Trump took office determined to transform the U.S.'s silver-plated military to a platinum status, saying that former President Barack Obama had allowed the Army, Navy, Marines, Air Force and Coast Guard to lose their luster and undermine readiness. It would add nearly $30 billion to Trump's $668 billion request for national defense next year and rejects most of Trump's proposed cuts to domestic agencies - only to promise deeper, nonbinding cuts in the future.

"We don't expect the RSC budget to pass; we do expect it to point a path back to solvency for future congresses to consider", he said.

"I feel like it's our only option", Republican Study Committee Chairman Mark Walker said. It allocated $621.5 billion for defense spending, $511 for non-defense discretionary spending and mandated $203 billion in mandatory spending cuts over the course of a decade. That proposed increase would break the caps imposed by the 2011 Budget Control Act. Like the Trump budget, the House budget would slash Medicaid - it says that via Medicaid cuts plus changes to Obamacare, it would save $1.5 trillion. It also proposes cuts to Medicare and Social Security, which Trump promised to preserve.

"The reason we did this comparative index is in large part to challenge policymakers like President Trump to look to other economies and other societies, to give people smarter ways to give everyone an opportunity to lift themselves from poverty", Oxfam America's vice president for policy and campaigns, Paul O'Brien, told The Guardian. The budget also stipulates that such a bill should repeal the alternative minimum tax and reduces the corporate tax rate.

Under the budget, the committees would have until October 6 to send legislative text on its spending cuts to the Budget Committee. That could include cuts to programs like the Social Services Block Grant, Temporary Assistance for Needy Families, Supplemental Security Income or Disability Insurance.

The House budget proposes reducing spending on entitlement programs such as Medicare by $203 billion next year, instructing 11 House committees to find ways to reduce spending.

The budget instructs the committee to pass this reform through a process called reconciliation, which was primarily created to pass budgetary laws. If enacted, it would result in a US$6.5 trillion reduction in the federal deficit over a decade.

The House Budget Committee held lengthy debates over the GOP budget proposal on Wednesday afternoon. That would be well below the $10.112 trillion 10-year deficit the CBO projected in late June.

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