The House Budget Committee will assume enactment of the House-passed health care bill when it marks up a budget resolution after the Memorial Day break, a stance that may make tax-writers’ jobs easier as they look to revamp the tax code.
According to a GOP aide familiar with the situation, the committee faces something of a dilemma in deciding how to treat the issue. Politically, if it doesn’t assume enactment of the Affordable Care Act repeal bill (H.R. 1628), it will be criticized. But assuming enactment helps drive down the amount of revenue loss—and thus deficit increase unless offset by economic growth—linked to a tax overhaul, which may be seen as a gimmick.
“It goes both ways,” the aide told Bloomberg BNA May 5. “The House does a budget based on what the House has done.”
The narrow House vote to send the repeal bill to the Senate pushes back the House committee’s schedule. A new budget resolution can’t be agreed to by both the House and Senate without the health care bill losing its privileged filibuster-proof status in the Senate. With the bill in the Senate’s hands, hopes on both sides of the Capitol to write and adopt budget blueprints in May are likely to slip to allow time for the Senate to dispose of the health care bill.
The aide said the timeline for the House resolution’s introduction is “at some point after Memorial Day.”
Both House Speaker Paul D. Ryan (R-Wis.) and President Donald Trump have said enacting the health care bill would help with tax reform efforts, though the size of that benefit has been disputed. The Committee for a Responsible Federal Budget has said passing the House ACA repeal would drive revenue lower by about $622 billion over 10 years, less than the $1 trillion Ryan and Trump have touted, but still a substantial sum that the tax-writing committees wouldn’t have to deal with.
“They don’t have to do as much to get to balance as far as their starting point” in the budget, Bill Hoagland, senior vice president at the Bipartisan Policy Center, said about splitting the tax cuts between the health care bill and the later tax reform bill.
The nature of the health care bill, which uses sharp cuts in health care spending—much of it for the poor—to more than offset the revenue lost by repealing taxes that hit the wealthy, has another potential impact: making the later argument over who benefits from a tax overhaul easier.
“This is robbing from the poor to pay for the rich,” Hoagland said. Distributional tables for a tax overhaul—which show how each one-fifth of the tax-paying population benefits or is burdened by a tax change—would reflect less movement for high-income taxpayers if their taxes are cut first in the health care bill.
“You may be able to show less of an impact,” he said.
Embedding the assumption of the health care bill’s enactment in the budget resolution won’t, however, affect the scoring baseline the Congressional Budget Office and Joint Committee on Taxation use to measure the fiscal impact of a tax bill. Those only change in response to the enactment of new laws or significant administrative actions.
“They can assume whatever they want” in the budget, Hoagland said.
The GOP aide said the resolution is likely to include directions for various committees to find savings in their jurisdictions, though it wasn’t clear whether it would be the $500 billion over 10 years target that has been reported. It will be “a fairly significant number,” the aide said.
The savings are unlikely to come out of Social Security, which can’t be included in reconciliation bills or Medicare. That still leaves a wide swath of non-Social Security, non-Medicare programs, including farm price supports and food aid programs for the poor. Similar savings were sought in 2012 as a potential offset for the automatic spending cuts known as sequestration.
The aide said budget writers don’t see the savings as an offset for the tax overhaul, which House leaders have said should be revenue-neutral, aside from effects of economic growth and tax policy already in place.
“That is not our agenda,” the aide said about using the cuts as offsets. “The goal is not to pay for tax reform.”
To contact the reporter on this story: Jonathan Nicholson in Washington at firstname.lastname@example.org
To contact the editor responsible for this story: Paul Hendrie at pHendrie@bna.com
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