WASHINGTON – The House on Thursday narrowly passed a budget blueprint that paves the way for a massive tax cut and the possible elimination of the state and local tax deduction that has given many New York homeowners a big break on their taxes.
The budget never would have passed if not for Reps. Tom Reed and Chris Collins.
The two Republicans who represent parts of Western New York were the only members of the state's congressional delegation to vote for the budget resolution, which passed by a 216-212 vote. If both Collins and Reed had voted against the budget, the vote would have been deadlocked at 214-214 and the spending plan would not have passed.
Both Western New York lawmakers defended their votes.
Reed – who is trying to craft a compromise in which the state and local tax deduction would be trimmed back, but not eliminated – insisted the budget and the ensuing tax plan will not hurt most New York taxpayers.
"I would not have moved forward on this if I were not extremely confident that we will come up with a solution for 99 percent of the people we represent," Reed said in an interview after the vote.
"I think there's clear recognition that the outright repeal of the SALT deduction is not going to happen," added Reed, a Republican from Corning represents much of the Southern Tier.
Collins said the budget had to be passed so that Republicans can approve a tax reform package later this year.
“Passing the budget was essential to getting tax reform completed without the threat of a Democratic filibuster in the Senate," said Collins, a Clarence Republican who represents a district that links many Buffalo suburbs with Rochester's western suburbs via the countryside in between. "We have set the stage to pass a tax reform bill that will drop corporate tax rates, put the United States on an equal playing field with the rest of the world, and lower the tax burden on small businesses."
The seven other House Republicans from New York voted no on the spending plan, and many cited the possible elimination of the state and local tax deduction – popularly known as "SALT" – as the reason why.
"We must provide middle class tax relief and lower the burdens on job-creating small businesses," said Rep. John Faso of Kinderhook, in the Hudson Valley. "I could not, however, vote in support of a budget resolution that singled out for elimination the ability of New York families to deduct state and local taxes."
Rep. Pete King of Seaford, on Long Island, agreed.
"GOP failure to preserve #SALT will devastate NY and LI. Must vote NO on budget to stop this!" King tweeted.
Every Democrat in the House, including every one from New York, opposed the budget resolution, saying it paves the way for reckless budget cuts to Medicaid and other social programs as well as elimination of a tax deduction that Gov. Andrew M. Cuomo and the state's two U.S. senators have said is essential to the state's well-being.
"Congressmen Reed and Collins have been derelict in their duty to represent the New Yorkers who sent them to Washington," Cuomo said in a statement after the vote. "Instead, they put party allegiance over economic security and fairness.”
Cuomo and other supporters of the SALT deduction said its elimination will lead to massive tax increases for homeowners in New York and other high-tax states. They also say the deduction's elimination will depress home values and make it harder for the state to persuade businesses to locate in New York.
With those arguments to gird them, Democrats plan to use Thursday's budget vote as an issue against both Reed and Collins in their 2018 bids for re-election.
"Representatives Reed and Collins held the future of the SALT deduction in their hands, and decided to turn their backs on their constituents," said Evan Lukaske, spokesman for the Democratic Congressional Campaign Committee. "Reed and Collins are now officially on the record supporting a middle-class tax increase -- something they must explain to families and seniors in the Southern Tier and Western New York."
While the Senate already has approved the same $4 trillion spending plan, the budget resolution is merely one step in the much longer process of approving the $1.5 trillion in tax cuts that the Republicans want.
Through the simple procedural move of passing a budget blueprint, Republicans will be able to draw up a tax reform bill that can pass the Senate with a mere majority, not the supermajority of 60 votes that would have been required if the budget had not passed.
"The budget resolution is nothing more than a vehicle to allow for a straight up or down majority vote on tax reform in the Senate," Collins said. "I am confident that there will be an accommodation to make sure that working families in New York see a reduction in their taxes."
Reed, a member of the tax-writing Ways and Means Committee, said he is working on a compromise that would preserve the SALT deduction but limit it so that middle-income taxpayers could still take it while upper-income filers could not. That compromise would likely be included in the draft of the tax reform bill that House Republicans are planning to unveil next week.
The Trump administration hailed passage of the spending plan.
"This resolution sets the stage for Congress to put America first by providing economic relief for the American people in the form of tax cuts and tax reform," said White House press secretary Sarah Huckabee Sanders.
House Speaker Paul Ryan, a Republican from Wisconsin, agreed that the budget would allow Congress to devise a simpler, fairer tax code.
“For too long, the American people have been living under a broken system where they see too little of their own hard-earned dollars," Ryan said. "So much time and money is wasted just complying with this incredibly complicated tax code, only to be rewarded by having a big chunk of their income taken and claimed by the government."
But Senate Minority Leader Charles E. Schumer, a New York Democrat, said the spending plan would lead to cuts to Medicare and Medicaid while also boosting the federal deficit. In addition, Schumer said the budget gives Republicans the ability to devise tax cuts that would boost the fortunes of wealthy people and giant corporations at the expense of middle-class families.
“The struggle Republicans had in passing the budget shows how uncomfortable many of them are with eliminating the state and local deduction," Schumer said. "In the weeks ahead, Democrats will do everything we can to preserve it and work to defeat any tax proposal that favors the wealthy few over the middle class many.”