The Senate passed the 2018 fiscal year budget resolution Thursday in a 51-49 vote, paving the way for tax reform.
The budget cuts government spending by $5.1 trillion and will create an on-budget surplus of $197 billion over the next decade due to economic growth and fiscal constraint. While the budget cuts nondefense discretionary spending by $632 billion, it offers the maximum level of spending towards defense.
"The Senate is taking the next critical step in passing the comprehensive, fiscally responsible budget before us," said Senate Majority Leader Mitch McConnell (R., Ky.). "It's a fiscally responsible budget that will help put the federal government on a path to balance. On the economic side, this budget can help our country realize better and more sustained economic growth—which is critical, given the last decade of missed opportunities for the middle class."
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 that 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," McConnell said. "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."
"It represent a once-in-a-generation opportunity to replace a failing tax code that holds Americans back with one that works for them," said the majority leader. "Passing this budget is critical to getting tax reform done, so we can strengthen our economy after years of stagnation under the previous administration."
According to David Primo, a budget expert at the Mercatus Center, the budget resolution is a plan, not a policy.
"All the Senate is doing this week is laying out the parameters for the real budget debate and votes over spending and taxes," Primo said. "The reconciliation instructions in the budget resolution are what will allow tax reform to avoid a filibuster, and that’s why it is so important. But the real work begins after the budget resolution passes, and that will be working out the details of tax reform."