GOP budget deadlock imperils hopes for tax overhaul

If Republicans can't pass a budget, forget about a major overhaul of the nation's tax code—at least if they want a GOP-only approach with President Donald Trump that would avoid Democratic delaying tactics.

Congressional Republicans are struggling to first figure out a budget, but despite weeks of behind-the-scenes negotiations, they remain stuck.

Tea party conservatives are demanding spending cuts, while supporters of the military want even more money for the Pentagon than Trump sought. GOP pragmatists are balking at Trump's cuts to popular domestic programs. Committee chairmen are guarding their turf.

Washington, D.C., has a famously arcane budget process that rarely works as designed more than 40 years ago. But in times of unified government—when the same party controls both Congress and the White House—navigating the budget process is often the difference between success and failure.

That's because neither the budget, which is a nonbinding outline, nor follow-up legislation called a budget reconciliation bill can be filibustered in the Senate. The ongoing health care bill is such a reconciliation measure, and GOP leaders want to use the same approach to advance Trump's tax agenda, which is next on the priority list.

House Speaker Paul Ryan, R-Wis., vows that Republicans will complete tax reform this year despite myriad obstacles. "We cannot let this once-in-a-generation moment slip," Ryan wrote in prepared remarks for a speech he will deliver Tuesday to the National Association of Manufacturers.

Rep. Jim Jordan, R-Ohio, is less optimistic. "You can't get tax reform if you don't have reconciliation instructions. You can't get reconciliation instructions if you don't pass a budget," Jordan said at a recent forum at the conservative Heritage Foundation.

A key conflict among Republicans involves setting a spending "cap" for the 12 appropriations bills passed by Congress each year. Trump wants to increase spending on defense by $54 billion, or 10 percent, above the existing cap, but defense hawks on the House Armed Services Committee are demanding $37 billion more that would bring the defense budget to $640 billion next year.

House Budget Committee Chairman Diane Black, R-Tenn., has countered with a defense figure in the $620 billion range, but the Armed Services panel is drafting legislation this week that sticks with its higher demand. At the same time, GOP defenders of nondefense spending are opposing Black's proposed cuts to domestic programs and foreign aid, even though they are far smaller than the cuts proposed by Trump.

Black is focused on what she can get through her committee, which is populated with conservatives demanding cuts to so-called mandatory spending. That's the roughly two-thirds of the federal budget that's spent automatically, including Social Security, food stamps and Medicare. Those cuts, however, would have to advance along with the tax overhaul bill, and GOP leaders fear they could complicate that effort or spark a backlash.

For instance, Agriculture Committee Chairman Mike Conaway, R-Texas, is unenthusiastic about roiling his committee with a partisan proposal to cut food stamp spending by tens of billions of dollars over the coming decade. The panel is traditionally bipartisan and is just beginning work on major farm legislation that will need Democratic support to become law.

"They're afraid either the committees couldn't come up with the amount of savings that they're required or people wouldn't be willing to vote for them," said Ed Lorenzen of the Committee for a Responsible Federal Budget, which advocated for lower deficits. "And if either of those things happened it would jeopardize the entire reconciliation bill, including tax reform."

Black had hoped to vote on the budget in her committee this week; instead, House GOP leaders have scheduled a meeting of all Republicans to discuss the issue.

"We're actually really close on both the top line (appropriations) number for the upcoming fiscal year, the breakdown between defense and nondefense on that, and the minimum (mandatory spending cut) target in reconciliation," said House Budget Committee GOP spokesman William Allison.

All of this budget work was supposed to have transpired more than two months ago. Instead, Republicans remain divided, though delays have been made worse by the lengthy health care debate and the Trump administration's late submission of its budget.

"The House GOP is now months behind," top House Democrat Nancy Pelosi of California said Monday. "Deeply divided but unwilling to abandon their budget giveaways to the richest few."

The budget process is much maligned, but it helped President George W. Bush pass his signature tax cuts 16 years ago. Before that, it helped President Bill Clinton pass two budget deals—a 1993 package forged with Democrats and a 1997 effort negotiated with GOP Speaker Newt Gingrich.