Paul Ryan is confident he can sweeten tax reform to win over GOP holdouts

Key Points
  • Paul Ryan thinks Republican leaders can win over the 20 Republican lawmakers who voted against a budget resolution Thursday.
  • Those lawmakers could complicate the GOP's push to overhaul the U.S. tax system.
  • Of those 20, 11 hail from New York and New Jersey, which benefit from the state and local deductions the GOP plan could scrap.
Speaker Ryan: Tax reform will help reignite the American dream

House Speaker Paul Ryan on Thursday said he believes House Republican leaders can strike a deal with tax reform holdouts to win their vote on a final bill.

The House on Thursday narrowly voted 216 to 212 to approve a budget resolution, a key step to tax reform. A full 20 Republicans, most of whom represent high-tax blue states New York and New Jersey, opposed the measure.

Some voted against the budget over concerns about its spending levels. The vote showed that both factions have leverage over leadership heading into the tax reform debate.

Opposition could come when House Republicans release an expected draft bill next week, and leadership could need support from some of the holdouts to approve what would be the singular legislative achievement of President Donald Trump's first year in office.

House narrowly passes budget, moving one step closer to tax reform

"The Ways and Means Committee will be putting out a specific plan very shortly, and they're going to work with all of our members to look at and consider and address these concerns," Ryan told reporters Thursday. "I believe that the Ways and Means Committee will be working with these members in particular to find a solution."

Nearly all Republicans will get behind a bill to chop tax rates in an effort to spur economic growth. However, lawmakers have expressed concerns about other specific provisions in a tax framework released last month, most of which are intended to raise money.

GOP leaders have called for scrapping state and local tax deductions, a popular provision that largely benefits high-tax blue states. Some lawmakers in the Northeast opposed the budget resolution, but they never truly imperiled its passage.

Later Thursday, Ways and Means Committee Chairman Rep. Kevin Brady, R-Texas, told reporters that a meeting with the Republicans in favor of state and local deductions did not yield a compromise.

"They made it clear. They need this problem solved before they vote 'yes' on tax reform," he said.

Before the vote, the House Liberty Caucus, led by Rep. Justin Amash, R-Mich., also announced it would oppose what it called "wasteful" spending in the budget measure. The group raised concerns about deficits generated by it.

The budget also allows for tax cuts to add up to $1.5 trillion to the federal deficit over a decade.

Ryan on Thursday described the budget as "really important" to passing tax reform. It unlocks budget reconciliation, which allows the Senate to pass a plan with only a simple majority, or at least 50 of 52 GOP votes with Vice President Mike Pence breaking a tie.

Ryan did not answer questions about whether the House would make other controversial tweaks to the tax code, like changing the popular 401(k) contribution benefit. He deferred specific policy questions to the House Ways and Means Committee, the chamber's chief tax-writing panel.

Brady said the House will introduce a bill on Wednesday and start committee deliberations on Nov. 6.

— CNBC's Christina Wilkie contributed to this report.

WATCH: Ryan says budget important for getting tax reform done

Speaker Ryan: Budget is really important for getting tax reform done