A Budget Resolution: The First Step to a Tax Plan That Helps the Wealthy and Corporations, at the Expense of Everyone Else

The White House and congressional Republicans recently began in earnest their efforts to pass tax cuts for the wealthy and corporations, unveiling a joint plan that would give 80 percent of its tax cuts to just the top one percent of households. And already, Congress is moving forward on a budget resolution—a necessary first step towards “fast-track” passage of a plan that could cut taxes deeply for the wealthy and large corporations while putting Social Security, Medicare, and other programs that help working Americans at risk in the future. The House has already passed a budget resolution, and the Senate is expected to vote Thursday.  This phase of the process will be crucial in determining whether damaging tax cuts can pass later this year—and how damaging they will be if they do pass.

What is a budget resolution—and why does it matter?

A budget resolution doesn’t have the force of law, but it does set out the Republican majority’s key budget goals. Both the House and Senate versions of the budget resolution currently under consideration—like the budget put forward by the Trump Administration—are clear about those goals: deep cuts to investments in the future and programs that support working families, alongside big tax cuts for the wealthy and corporations.

The budget resolution can also kick off a procedure called “reconciliation,” which Republicans will try to use in coming months to achieve a big piece of their budget vision. Reconciliation—the same partisan, fast-track process that Republicans used to try to repeal the Affordable Care Act (ACA)—lets Congress enact major tax and spending changes with just a simple 51-vote majority in the Senate, and without the risk of filibuster, which requires 60 Senate votes to overcome. So if a budget resolution (which also requires only a simple majority vote) passes both houses of Congress, it would enable Republicans to pass a huge tax bill with only Republican votes.

For congressional Republicans to use reconciliation to pass their tax plan, they must first adopt a budget resolution. If a budget resolution doesn’t pass, a Republican-only tax plan can’t move forward. And if the budget resolution does pass, the details of its reconciliation “instructions”—the basic rules of the road that a bill will have to follow to remain on the fast track—will heavily influence a final tax bill.

Where are we now?

The Senate is expected to vote Thursday on its own version of a budget resolution. It would provide a fast track for a reconciliation bill that could add $1.5 trillion to the deficit through tax cuts for the wealthy and corporations.  

We know who would eventually pay for these tax cuts: down the line, they would put pressure on programs ranging from Medicare to education to infrastructure. How do we know? Because the broader budgets proposed by President Trump the House, and the Senate all point to current projected deficits—before a new $1.5 trillion tax cut—to justify their call for deep cuts to Medicaid, SNAP (food stamps), education, research, and a raft of other priorities. For example, Senator Lindsey Graham invoked the national debt when attempting to defend the Graham-Cassidy health bill’s trillion-dollar cuts to Medicaid over ten years.

Republicans know that tax cuts for the wealthy are deeply unpopular. The American public would never accept them if their trade-offs were clear, whether in tax increases for everyone else or cuts to key programs and public services. The only way Republicans can pass tax cuts of this size is by hiding the trade-offs and leaving the tax cut initially unpaid-for.  That’s why it’s so important that a budget resolution not allow tax cuts to lose revenue.

We could even see some of those cuts to critical programs enacted at the same time as the tax cuts. The budget resolution before the Senate would enable Congress to repeal large elements of the ACA, or cut programs like Medicaid and Supplementary Security Income for poor seniors and people with disabilities, as part of a tax bill. And each dollar cut from those programs would enable Congress to enact another dollar of tax cuts on top of the $1.5 trillion.

Lawmakers will likely argue that a budget resolution isn’t binding—and that if they are unhappy with the final contours of a tax plan, they can always vote no. But a budget resolution will be key to determining whether a tax bill can pass, and if so, what it would do. That’s why, with the Senate vote expected Thursday, it’s critical to weigh in now and let senators know that they should oppose the budget resolution—both because it sets up big tax cuts that would threaten future cuts to programs like Social Security and Medicare, and because it paves the way for cuts to key programs now with only Republican votes.  And even if the Congress passes a budget resolution, weighing in now tells those members that their constituents are watching and care about this—a key message to send as the tax debate continues to unfold.

What comes after the Senate vote on a budget resolution?

The House has already passed its version of a budget resolution, which also creates a fast-track process for a tax plan overwhelmingly for the wealthy and profitable corporations. Unlike the Senate budget, which permits a deficit-increasing tax cut, the House’s version would not allow a tax bill to add to the deficit.  However, the House budget requires spending cuts that the Senate does not by “instructing” committees to find at least $203 billion in cuts over ten years.  These cuts could affect programs like SNAP (formerly known as food stamps), Pell Grants to help students afford college, and Medicaid.

If the Senate passes a budget resolution, the House and Senate will then need to craft a compromise version that both houses must pass before beginning to write their actual tax bill. Those votes will create another opportunity to challenge House and Senate members to oppose a budget that would set the stage for damaging tax breaks for the wealthy and corporations, alongside potential cuts—whether now or in the future—to key programs for working and middle-class Americans.

So while the process is long and complex, the message is simple: your Members of Congress should oppose any plan that:

  • Cuts taxes for the wealthy and corporations
  • Creates pressure for cuts to programs ranging from Medicare to Social Security to education by driving up the deficit as a result of these tax cuts
  • Cuts key programs like Medicaid now.  

Earlier this year, when congressional Republicans sought to pass a health care bill that cut taxes for the wealthy while cutting health coverage for millions of Americans, loud, sustained public opposition played a crucial role in slowing and ultimately stalling that process. The same will be necessary in the tax debate—and that effort starts now, with the budget resolution.  

Steps to Enacting a Tax Bill
  • House passes budget resolution
Thursday, October 5
  • Senate passes budget resolution (only requires a simple majority)
Thursday, October 19
  • House/Senate craft a compromise budget, which must pass both houses by simple majority vote
  • “Reconciliation” bill—with tax cuts and possibly also spending cuts—is drafted
  • Bill must pass both House and Senate—but only requires 51 votes in the Senate (If House and Senate pass different versions, must reach agreement on a compromise version and pass both houses again)
  • President signs bill


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