The House Freedom Caucus, a hardline conservative group, threatened on July 12 that it will block a resolution important to tax reform in the fiscal 2018 budget. Negotiations over the budget have stuck due to efforts made by the group to include approximately $200 billion cuts to the compulsory spending programs spanning a decade within any budget resolution. This move is being opposed by the Republican moderates.
According to Representative Mark Meadows, the chairman of the Freedom Caucus, any budget put forth at this time will not gather enough votes to pass in the House. He said the tax reform must set a corporate tax rate of 16 percent. It should double standard deduction for those individuals who forget or intentionally does not itemize.
This can only be averted, the Freedom Caucus warned, if the GOP releases a particular plan which cuts down the United States corporate taxes. The plan doubles an eligible individual's standard deduction as well. It is anticipated that this demand could result in more infighting from Republicans. Intra-party fighting has stopped the Republicans from consenting on a specific spending blueprint for the fiscal year starting from the first day of October. This is possible as the Freedom Caucus has about 36 members in the GOP controlled House.
Tax reforms pledged
The US President Donald J. Trump and the Congress Republicans have pledged to deliver a package of tax reforms in 2017. Business lobbyists worry that this may not be possible if the House budget squabble continues. Healthcare legislation can face hurdles in the Senate as well.
Members of the Freedom Caucus have again asked the House to be in session during August. They said that lawmakers must also take healthcare into consideration. There will also be a rise in the federal debt ceiling. The Republican lawmakers should not go back to their respective districts.
The Republicans badly need to pass a budget resolution as part of its tax overhaul effort. If this is done, it would permit the bill to cross the 100-seat power Senate. If it is done, then only a simple majority will be needed. If the budget resolution does not get approved, the legislation must need 60 votes in the chamber. Therein lies the problem- the Republicans have 52 seats.
A letter was sent by the US Chamber of Commerce on July 12 to the Senate Republicans. The letter reportedly asked for tax cuts along with a number of other policy changes. The Chamber said that if the before-mentioned is done, American businesses will be much more competitive not only at home but also abroad.