House passes budget resolution, first step towards tax reformImage Banner

House passes budget resolution, first step towards tax reform

You are here

House passes budget resolution, first step towards tax reform

October 6, 2017

On Thursday October 5, the U.S. House of Representatives passed its 2018 budget resolution, which Democratic Congressional leadership opposed because of projected cuts it contained to Medicaid. This is the first step in the FY18 budget process (usually it occurs earlier in the preceding year). The budget resolution process is expected to become a vehicle for tax reform and has a possibility of directly or indirectly affecting Medicaid.

Budget resolutions can pass by simple majority – they are not legally enforceable instruments, they set the tone and theme for legislative and budget goals for FY18 and in this case, with the GOP in control of Congress, they are largely reflective of GOP principles. The instructions set out in the resolutions can move forward reconciliation bills that are fast tracked in Congress (think healthcare (ACA repeal/replace and Medicaid reform )proposals of 2017 and in 2018 this is likely tax reform).

The steps for the budget resolution and reconciliation process are:

1. The House passes it budget resolution.

2. The Senate passes its own budget resolution – that vote is expected to occur the week of October 16th.

3. Because the Senate proposal has a $1.5 trillion deficit (over 10 years) that conflicts with the House budget, bothchambers will negotiate a final agreement and vote on it.

4. Tax reform legislation text will be shared publicly reflective of the GOP proposal (agreed upon by the White House, Senate, and House)

5. A reconciliation bill with a focus on tax reform will be introduced with a goal of passing it sometime within FY18

A budget reconciliation bill can be introduced to meet the goals and instructions set out by the agreed upon Congressional budget resolution. As a reminder, bills passed under this process MUST be budget-focused (not policy-focused) and only require 51 votes for passage in the Senate instead of the usual 60. Republicans hold the majority of the Senate with 52 votes.

The reconciliation process should look the same for tax reform as it was for unsuccessful attempts to cut and cap Medicaid and repeal the Affordable Care Act this past summer, except that it will be for Fiscal Year 2018 instead of Fiscal Year 2017. That is because the process for 2017 expired on September 30. Click here for our primer on the 2017 reconciliation process.

ANCOR is closely monitoring the tax reform process, because it could it could lead to Medicaid cuts, indirectly or directly. For example, cuts to Medicaid and/or per capita caps could be directly written into the tax legislation to generate savings for proposed tax cuts. Alternatively, cuts to Medicaid could be implemented in future years as a way of indirectly off-setting tax cuts, which are expected to put pressure on federal funds. Both the Tax Policy Center and the Committee for a Responsible Federal Budget say the tax reform proposal as outlined will lead to losses in federal revenue.

We encourage ANCOR members to use this time to educate their legislators on the importance of Medicaid for people with disabilities and remind them what optional programs under Medicaid mean for states making difficult budget decisions.