The House joined the Senate in passing the 2018 fiscal year budget in a 216-212 vote on Thursday in an effort to move tax reform forward.
The Building a Better America 2018 budget balances within a decade, achieves a $9 billion surplus, and is projected to increase GDP growth by 2.6 percent.
Under the Obama administration, GDP grew at a rate that averaged just 2 percent. According to the committee, this is below the historical average of 3 percent and a rate lower than one that occurred in previous economic recoveries. The House budget aims to boost economic growth even further by reducing red tape on businesses and reforming various government agencies that burden entrepreneurs.
"Overall, our budget achieves $6.5 trillion in deficit reduction, resulting in a $9 billion surplus in 2027," the Budget Committee said in July. "We do not do this simply by cutting spending and reducing the size of government. Rather, our budget also enables states to find solutions that work for them, and it empowers individuals and small businesses to increase economic output and unleash the power of the American free market."
The House budget also includes a path for tax reform including an effort to simplify the tax code to make it fairer, lower tax rates for businesses and individuals, and lower the corporate tax rate. It also repeals the Alternative Minimum Tax. The budget also plans to repeal Obamacare and replace it with the House's American Health Care Act, which they say will lower the deficit by $204.1 billion over the next decade.
"We estimate that the pro-growth policies of health care reform, tax reform, welfare reform, and deficit reduction assumed in our budget will yield economic growth of 2.6 percent on average over the 10-year budget window, resulting in $1.5 trillion in deficit reduction," the committee said.
Last week, the Senate passed the budget resolution in a 51-49 vote, also in an effort to move tax reform forward.
The Senate Finance Committee, along with the House Ways and Means Committee and the Trump administration, released its tax reform framework in September, which attempts to cut taxes for all Americans, streamline the code to be more simple and fair, bring back jobs for more American workers, and bring back trillions in wealth from overseas.
Some have suggested the plan could lead to an increase in GDP growth by 4 percent and wages could increase by as much as $4,000 due to the measure.
"One way this budget can help our economy is by providing legislative tools to advance tax reform," said Senate Majority Leader Mitch McConnell (R., Ky.). "Tax reform is all about getting America going again and growing again. It aims to take more money out of Washington's pockets and put more in middle-class pockets."