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WRAPUP 1-U.S. Senate panel unveils budget plan paving way for Trump tax cuts

WASHINGTON, Sept 29 (Reuters) - A U.S. Senate panel took President Donald Trump's proposed tax overhaul a step forward on Friday by unveiling a budget plan for the coming fiscal year that acknowledges lost revenues from tax cuts, while Trump pressed ahead with selling the proposal to the public.

The budget resolution released by the Republican-controlled Senate Budget Committee would pave the way for Republicans to avoid potential Democratic procedural moves to block it.

Republicans, who control the White House and both chambers of Congress, announced Trump's tax proposal on Wednesday, offering trillions of dollars in tax cuts to businesses and individuals. Democrats have said it mostly benefits corporations and the wealthy and would balloon the already huge federal deficit.

The Senate budget resolution formally recognizes that the tax cuts would shrink federal revenues in the coming years.

It builds in $1.5 trillion in reduced revenue from tax cuts over the next decade. Independent analysts have said the Trump plan would reduce revenues by nearly $6 trillion over a decade, not accounting for the planned elimination of certain deductions and tax loopholes.

The resolution is vital to plans by the Republicans to move tax legislation through the Senate, which they control by a slim 52-48 majority, using a parliamentary process that lets them pass legislation without a customary 60-vote threshold that would necessitate some Democratic support.

The proposal calls for slashing the corporate tax rate to 20 percent from 35 percent, the small business rate to 25 percent from 39.6 percent and the top individual rate to 35 percent from 39.6 percent.

The budget resolution is "a critical step to advance President Trump's agenda to provide tax relief for the middle class and unleash economic prosperity for all Americans," said White House budget director Mick Mulvaney said.

"The Senate Republican budget is the clearest sign yet that Republicans are intent on pursuing a tax plan that would blow a huge hole in the deficit and stack up debt, leading to cuts in programs that middle-class Americans rely on," Senate Democratic leader Chuck Schumer said in a statement.

The resolution could be approved by the committee next week ahead of a full Senate vote. The House of Representatives is due to vote on its own budget blueprint next week.

The White House and Republicans in Congress aim to have the tax proposal passed by the end of the year.

'STAY IN AMERICA'

Trump talked up the tax proposal during a speech on Friday to the National Association of Manufacturers business lobbying group in Washington.

"Our current tax code punishes companies for doing business in the United States and encourages them to leave. And that's what's happened for so many years. And that's one of the reasons, probably the prime reason, that companies are leaving our country and firing all those people," Trump said.

"We need a tax system that encourages companies to stay in America," he added.

The U.S. national debt stands at about $20 trillion and the proposal provided few details on how to offset the federal revenues that would be lost with the tax cuts.

Trump has failed to secure passage of any major legislation since taking office in January, with a healthcare overhaul collapsing in the Senate, money to build his promised wall along the border with Mexico failing to materialize and infrastructure spending legislation never getting off the ground.

Trump's fellow Republicans in Congress have struggled with internal divisions often pitting hard-line conservatives against more moderate elements of the party.

(Reporting by David Morgan; Additional reporting by Steve Holland and Makini Brice; Writing by Will Dunham; Editing by Alistair Bell)