Congress approves financial plan essential for Trump's tax reform initiative

In a closely contested 51-to-49 vote, the Senate, on November 8, 2017, approved a budget blueprint for the 2018 fiscal year. This move paves the way for Republicans to pursue a tax-cut package without Democratic support.

The Senate version of the budget resolution instructs the Energy and Natural Resources Committee to save at least $1 billion over the next decade, a measure aimed at reducing the federal deficit. However, the approved budget blueprint could add up to $1.5 trillion to the federal deficit over the next decade to pay for proposed tax cuts.

Senator Ron Wyden, the top Democrat on the tax-writing Finance Committee, stated that Democrats believe the plan would benefit the wealthy, raise taxes on some middle-class Americans, and increase the federal deficit. Despite this opposition, President Donald Trump sought the support of six Senate Democrats for his tax plan at a Wednesday meeting with Finance Committee members from both parties.

The Republicans' plan is to reduce the corporate income tax rate to 20 percent from 35 percent. To facilitate this, the Senate measure utilizes a legislative tool called reconciliation, enabling Republicans to move tax legislation through the Senate with a simple majority vote.

The House budget resolution, on the other hand, calls for a revenue-neutral tax bill. This means that any tax cuts would have to be offset by other tax increases or spending cuts. However, the Senate version does not adhere to this requirement, potentially leading to a larger deficit.

The resolution now has to be reconciled with a markedly different version passed by the House of Representatives. Negotiations on a unified measure could take up to two weeks.

Notably, Kentucky Republican Sen. Rand Paul was the only GOP senator to vote against the budget measure. Senate Majority Leader Mitch McConnell stated that the budget measure will deliver much-needed relief to American individuals and families, while Democrats are likely to oppose the Trump administration's tax plan.

The White House claims that the tax plan would create jobs and boost wages for blue-collar workers. However, the exact impact on middle-class Americans remains uncertain. The Senate Republicans are under pressure to pass tax reform, starting with the budget measure that allows for tax legislation to add up to $1.5 trillion to the federal deficit over the next decade.

In a surprising twist, five of the six Democrats who attended the meeting are up for reelection next year in states that Trump carried in the 2016 election. The outcome of these negotiations could significantly impact the political landscape in the coming year.