Last Updated Oct 18, 2017 9:39 AM EDT
The Senate is expected to take one step closer this week to craftingwith the passage of a budget resolution.
After a series of votes throughout the week on amendments, the bill is likely to pass the upper chamber. But before lawmakers can roll up their sleeves and begin writing language to fill out the tax framework, House and Senate Republicans must first work out the differences between their two budgets, potentially in a conference committee, congressional aides told CBS News.
Where are Republicans in the process?
The Budget Committees in both the House and Senate have passed GOP-sponsored budget resolutions. The House passed its proposal on Oct. 5 in a 219-206 vote. The Senate voted this week to open debate on the House-passed bill and will amend it so that it looks like the version that the Senate panel passed. A final Senate vote on the budget is expected later this week.
If and when the Senate passes its budget blueprint, Republicans in both chambers will have to hash out the differences between their resolutions. After that, the House and Senate would each vote on the agreement. After that, the specified authorizing committees would then start writing up tax reform bills in each chamber.
How do the Senate and House budget resolutions differ?
There are significant differences between the two GOP budget plans. The Senate budget would direct the Senate Finance Committee to find $1.5 trillion in tax cuts over the next decade and relies on a single committee, the Senate Energy and Natural Resources Committee, to reduce the deficit by $1 billion over that period.
The House budget, by contrast, contains reconciliation instructions to 11 different committees and directs them to find at least $203 billion in savings and reforms to mandatory programs.
The Senate budget calls for $5.1 trillion in spending cuts over the next 10 years, reducing non-defense discretionary spending by $632 billion during that time.
The House blueprint, which aims to cut improper payments across the government by $700 billion, incorporates the House-passed Obamacare repeal bill and all of its savings. It would also make changes to entitlement programs, calling for a partial privatization of Medicare and cuts to Medicaid. The Senate doesn't touch those entitlement programs.
What do Republicans want in their tax reform legislation?
Senate Majority Leader Mitch McConnell, R-Kentucky, said Tuesday that the Senate GOP's plan calls for doubling the standard deduction, significantly increasing the child tax credit, eliminating loopholes used by the wealthy and providing relief to small businesses.
"Our current tax code is archaic, it's arduous, and it's often bizarre. It holds our economy back and it can hold workers' wages down. It actually incentivizes companies to ship jobs and profits overseas. And it makes it easier for the wealthy and well-connected to game the system, yet is almost impossible for anyone else to understand," McConnell said.
Republicans want to lower the corporate tax rate to increase U.S. competitiveness with other countries, as well as provide tax cuts for individual Americans.
"Above all, our goal is this: we want to take more money out of Washington's pockets and put more into the pockets of the middle class — in Kentucky, and across our country," McConnell said.
Does this tax reform process have a deadline?
Administration officials and members of Congress were looking to the end of the year as the deadline to enact a tax reform package. But time is running out. The House and Senate are only slated to be in session for roughly 30 more legislative days through the end of the year.
In an interview Tuesday, Office of Management and Budget Director Mick Mulvaney emphasized that the Senate must pass its budget by this Friday if Republicans want to check tax reform off of their agenda this year.
"In order to get that done, we really do need to stay on schedule. It means we need to pass this budget on Friday. If you don't pass the budget on Friday, it doesn't mean tax reform is done forever. It means we are off of schedule," Mulvaney said in an interview with Fox News Radio.
What happens if Republicans can't pass their tax plan?
Congress has a long to-do list that includes funding the government past Dec. 8, passing a budget deal to raise spending caps and extending the Obamacare cost-sharing subsidy payments. Lawmakers also still have to come up with a legislative fix for the Deferred Action in Childhood Arrivals (DACA) program, as well.
But the tax plan is critical for Republicans politically. Sen. Lindsey Graham, R-South Carolina,that failing to enact would hurt the GOP's chances in the 2018 midterm elections next November.
"If we don't, we're dead," Graham said when asked if Republicans will get tax reform done.
Similarly, Sen. Ted Cruz, R-Texas, warned last week that Republicans could face a "Watergate-style blowout" if they fail to enact any major part of their agenda.
"If we do nothing, if tax reform crashes and burns, if Obamacare nothing happens, we could face a bloodbath. I think we have the potential of seeing a Watergate-style blowout," the Texas Republican said at a Koch brothers donors meeting at the St. Regis Hotel in New York.