House Republicans are about to have a huge vote on tax reform, and some concern is mounting that it could end in disaster

Paul ryanChip Somodevilla/Getty ImagesHouse Speaker Paul Ryan
  • The House will vote on the Senate’s budget resolution Thursday.
  • Passing the budget resolution would allow Republicans to start on the fast track to their tax plan.
  • Some GOP members are upset over a key provision in the tax plan and could block the vote in protest.

The House is expected to vote on the Senate’s budget resolution on Thursday, the last procedural step before the GOP can move to fast track their tax reform bill.

A provision of that tax reform plan, however, has some GOP members uncommitted in their votes, threatening a potential failure that could set the tax reform process back by weeks.

The Republican tax reform framework includes the elimination of the state and local tax deduction. The deduction allows people to shave off what they pay in state and local taxes from their federal tax bill.

By eliminating the SALT deduction, Republicans would offset a significant amount of their planned tax cuts — saving $US1.3 trillion over 10 years, according to an analysis by the Tax Policy Center.

However, Republicans from high-tax states like California, New York, and Massachusetts where the deduction is popular are rallying to save the provision for their constituents. For instance, Rep. Frank LoBiondo of New Jersey tweeted that he would vote no on the budget.

Chris Krueger, an analyst at Cowen Washington Research Group, said there are enough members from these high SALT deduction states to block the budget if they so choose.

“There are 52 House Republicans in the 24-seat majority who represent districts that over-index to the deduction (California, Illinois, New York, New Jersey, Minnesota, etc.),” Krueger wrote Thursday. “There is a core group (presumably enough to block the budget) who are threatening to withhold their votes on the budget if there is not a guarantee to protect SALT.”

According to Politico, House leaders canceled a meeting with lawmakers concerned about the SALT deduction that was supposed to find a compromise. That could be a sign that GOP leaders believe they have the votes.

Passing the Senate budget resolution would be key for tax reform because the measure includes instructions for budget reconciliation. The reconciliation process allows a bill to pass the Senate with a majority of votes. Since the GOP only has a 52-seat majority in the Senate, reconciliation is key to avoiding a Democratic filibuster.

If the budget fails in the House, leaders would have to go back to the drawing board on a deal to placate the GOP holdouts. That would also likely delay the roll out of the actual tax reform legislation, which Rep. Kevin Brady, the House Ways and Means committee chair, said is slated for release on November 1.

Only 22 House Republicans could vote against the bill for it to pass. The vote is expected between 10:30 and 11:30 a.m. ET, according to House Majority Leader Kevin McCarthy’s schedule.

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