House and Senate Pass Budget Plans

The House and Senate passed dueling versions of a budget resolution thus setting up the next step in the reconciliation process. The two versions are very different in structure and concept, and those differences must be resolved and then approved by both chambers before the reconciliation process can take place.

The Senate acted first on its budget resolution, passing S. Con. Res. 7 by a vote of 52-48. The Senate version allows a “two bill” strategy to address all of President Trump’s priorities. The priorities in the first bill include spending $345 billion over four years on border security and military spending with offsetting cuts. Later this year, the second bill would focus on tax priorities.

For the committees of interest to NAICU, the Senate version includes reconciliation instructions for the education committees and tax committees to each write legislation that generates at least $1 billion in deficit reduction over 10 years. The $1 billion instruction is considered a floor from which committees can build their legislative approach. It is unclear which of the bills education cuts might be part of if the two-bill approach is adopted.

House passage of H. Con. Res. 14 was uncertain until the last minute earlier this week when all Republicans but one voted for the measure and all Democrats voted against it for a vote of 217-215. The House budget resolution lays out a plan for $2 trillion in cuts and $4.5 trillion in tax cuts over 10 years with reconciliation instructions that reflect the full target of what committees must generate in savings to pay for the tax bill. The education committees are instructed to save $330 billion over 10 years, which could result in dramatic changes to student loans, the elimination of loan forgiveness programs, and the inclusion of cost-sharing payments from institutions. The tax committees are instructed to spend $4.5 trillion over 10 years, which would extend the 2017 tax cuts, but also allow the committees to revise other sections of the tax code such as student and family higher education tax benefits, the endowment tax, or tax advantages for nonprofits.

Leadership will now negotiate to resolve the overall differences between the two bills so both chambers can approve the same budget resolution. To trigger the budget reconciliation process, the House and Senate must agree to the same parameters for revenues, spending, and deficit reduction. Once that happens, Congress will go to work to decide exactly what the final bill will look like.

For more information, please contact:
Stephanie Giesecke