Senate Republicans aren’t seeing eye to eye with their colleagues in the House over places to cut spending in order to pay for their extension of the 2017 Trump tax cuts.
GOP members of the Senate Finance Committee met Thursday with President Trump, seeking to get on the same page about tax and spending issues after the House passed a budget resolution at the end of February outlining $4.5 trillion in tax cuts and between $1.5 and $2 trillion in spending cuts.
The resolution compels the Energy and Commerce Committee in the House to come up with nearly $900 billion in spending cuts, which will likely require them to slash funding for the popular Medicaid healthcare program.
Trump has said he wants his agenda — spanning tax cuts, border security and expanded fossil fuel extraction — passed in “one big, beautiful bill,” even as the Senate Republicans have laid the groundwork for two separate bills.
Following their meeting with Trump, some Senate Republicans criticized the House resolution. House and Senate Republicans will need to pass a joint budget resolution before they can move forward with a specific tax and spending bill through the reconciliation process, which allows a party-line vote and avoids a filibuster in the Senate.
“Their bill is not quite yet beautiful,” Senate Finance Committee member Steve Daines (R-Mont.) said Thursday. “We have to be aligned first and foremost. “The first step is to get our budget resolution passed that aligns more closely to where the House is.”
Daines said Republicans in the Senate, which tends not to be quite as concerned with deficit additions as the lower chamber, will need to match the $1.5 trillion in cuts sought by the House and perhaps go beyond it for their resolution to be viable.
“What number do we put into the budget resolution in terms of, basically, deficit reduction?” he said. “I think we’re going to have to be to that number in the Senate in order for the House to accept what we will do.”
Senate Finance Committee member Ron Johnson (R-Wis.) tread carefully on the topic of spending cuts, repeating a common Republican line about “waste, fraud and abuse” in spending programs.
“For all of us, what’s off the table is reducing benefits for people who need things. But in any program where there’s waste, fraud and abuse, we definitely want to explore that,” he said.
Following the meeting with Trump, Finance Committee Chair Mike Crapo (R-Idaho) and member James Lankford (R-Okla.) stressed the desire to make the 2017 Trump tax cuts permanent. Some of the cuts have already expired and the many more are due to expire at the end of this year.
Permanence would likely add more to the cost of the tax cuts than a temporary extension. The 2017 cuts were made temporary in order to reduce their deficit impact, as Republicans were initially trying to make their bill revenue-neutral before agreeing to a $1.5 trillion in deficit expansion.
The current tax extension bill could add substantially more to the deficit than its forerunner. The cost of simply extending the expiring 2017 cuts will cost $4.7 trillion, according to the Congressional Budget Office (CBO) — more than the $4.5 trillion the House budget resolution has allotted.
Without any offsets, the Republican tax cuts could amount to $6.8 trillion in federal revenue losses if they are written to expire after 2033, according to a recent analysis by budget modelers at the University of Pennsylvania. If they’re made permanent, they would shed revenue by $7.7 trillion.
Republicans are seeking to be able to ignore nearly $5 trillion of those revenue losses by using an accounting method that disregards their legal expirations.
