The U.S. Senate passed the 2018 budget resolution, a major step toward advancing President Donald Trump’s proposed overhaul of the tax code.
On Oct. 19 the Republican-controlled Senate approved the budget for the next fiscal year by a 51 to 49 vote, with opposition from Democrats and GOP Sen. Rand Paul.
Trump celebrated the news on Twitter the next morning.
“The Budget passed late last night, 51 to 49. We got ZERO Democrat votes with only Rand Paul (he will vote for Tax Cuts) voting against.....” he tweeted.
“....This now allows for the passage of large scale Tax Cuts (and Reform), which will be the biggest in the history of our country!”
The Senate’s vote on a budget resolution was key to the Republican effort to overhaul the tax code. It allows the Senate to pass a tax reform bill with 51 votes under reconciliation, rather than the usual 60 needed for most legislation.
The next step for the Senate will be to reconcile its budget resolution with a different version passed by the House.
The Senate version allows tax reform to increase the deficit by $1.5 trillion over a decade. In contrast, the House budget resolution calls for a revenue-neutral tax bill.
To solve this difference, the House may simply adopt the Senate version. And this process could be cleared in a week’s time, according to Rep. Kevin Brady (R–Texas), House Ways and Means Committee chairman. Following that, Republicans will release the tax reform bill, he told Fox News on Oct. 20.
“And this keeps us on the timetable to get this to the President’s desk by the end of the year. We know that’s an ambitious timetable,” he said.
The tax reform plan relies on growth and eliminating special interest loopholes and deductions, according to Brady. He thinks the status quo and the existing tax code will continue to increase the deficit.
“We intend to change that dynamic,” he said.
On the news of the budget resolution passing, the Dow Jones Industrial Average gained more than 160 points, reaching a fresh high on Oct. 20. The stock market got a boost from strong corporate results as well.
One of the top market gainers, JPMorgan Chase hit an all-time high after jumping 1.6 percent on Oct 20. Jamie Dimon, CEO of JPMorgan has been among the strong advocates of tax cuts.
Sen. Rand Paul of Kentucky was the sole Republican to vote against the budget resolution. He objected to its spending levels and said the budget would exceed spending caps by $43 billion.
“In light of the fact that we are for tax cuts, we ought to be for reducing spending, so we don’t explode the debt,” he said on the Senate floor.
Despite voting against the budget plan, Paul later responded to the tweet from Trump saying that he backs tax cuts.
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