WASHINGTON, June 9 (Reuters) - Members of the House Freedom Caucus called on congressional leaders Friday to introduce a formal tax reform proposal by the end of July, and suggested they could support a 2018 budget deal in exchange for adding welfare reform to any tax overhaul.
The conservative bloc, which has enough members to stymie legislation in the Republican-controlled House of Representatives, will play a key role in efforts to agree on a 2018 fiscal plan that could determine whether President Donald Trump and Congress can deliver the biggest tax reform since the Reagan era.
Members of the Freedom Caucus
Members of the Freedom Caucus
UNITED STATES - MARCH 22: Rep. Mark Meadows, R-N.C., chairman of the House Freedom Caucus, walks through Statuary Hall in the Capitol on Wednesday, March 22, 2017. (Photo By Bill Clark/CQ Roll Call)
UNITED STATES - APRIL 27: Rep. Justin Amash, R-Mich., arrives for the House Republican Conference meeting in the U.S. Capitol on Wednesday, April 27, 2016. (Photo By Bill Clark/CQ Roll Call)
UNITED STATES - JUNE 31: Rep. Brian Babin, R-Texas, leaves the House Republican Conference meeting in the Capitol on Tuesday, June 2, 2015. (Photo By Bill Clark/CQ Roll Call)
UNITED STATES - JANUARY 24: From left, Rep. Jody Hice, R-Ga., and Rep. Rod Blum, R-Iowa, at the House Oversight and Government Reform Committee meeting to organize for the 115th Congress on Tuesday, Jan. 24, 2017. (Photo By Bill Clark/CQ Roll Call)
UNITED STATES - JUNE 8: Rep. Dave Brat, R-Va., talks with the media after a meeting of House Republicans in the Capitol, June 8, 2016. (Photo By Tom Williams/CQ Roll Call)
UNITED STATES - MAY 21: Rep. Jim Bridenstine, R-Okla., attends a news conference in the Capitol where he and others primarily expressed support for victims of the Oklahoma tornado. (Photo By Tom Williams/CQ Roll Call)
UNITED STATES - JANUARY 8: Rep. Mo Brooks, R-Ala., sheds his coat to reveal his University of Alabama shirt as he descends the House steps following final votes of the week on Friday, Jan. 8, 2016. No. 1 Clemson and No. 2 Alabama are set to face off on Monday night for the 2016 College Football Playoff National Championship. (Photo By Bill Clark/CQ Roll Call)
WASHINGTON, USA - JANUARY 6: Congressman Ken Buck waits in the House Chambers for a joint session of Congress to begin where all the Electoral College votes from the States will be delivered and verified at the U.S. Capitol in Washington, USA on January 6, 2017. (Photo by Samuel Corum/Anadolu Agency/Getty Images)
UNITED STATES - FEBRUARY 2: Rep. Warren Davidson, R-Ohio, participates in the House Financial Services Committee meeting to organize for the 115th Congress on Thursday, Feb. 2, 2017. (Photo By Bill Clark/CQ Roll Call)
Representative Jason Chaffetz, a Republican from Utah and chairman of the House Oversight and Government Reform Committee, speaks as Representative Ron DeSantis, a Republican from Florida, looks on during a House Judiciary Committee hearing in Washington, D.C., U.S., on Tuesday, May 24, 2016. The hearing is part of some Republican lawmakers' push to impeach International Revenue Service (IRS) Commissioner John Koskinen for allegedly failing to cooperate with an investigation after the IRS reportedly targeted conservative groups applying for tax-exempt status. Photographer: Andrew Harrer/Bloomberg
UNITED STATES - MAY 17: Rep. Scott Desjarlais, R-Tenn., talks with reporters after a meeting of the House Republican Conference in the Capitol, May 17, 2016. (Photo By Tom Williams/CQ Roll Call)
Representative Jeff Duncan, a Republican from South Carolina, speaks during the South Carolina Freedom Summit hosted by Citizens United and Congressman Jeff Duncan in Greenville, South Carolina, U.S., on Saturday, May 9, 2015. The Freedom Summit brings grassroots activists from across South Carolina and the surrounding area to hear from conservative leaders and presidential hopefuls. Photographer: Andrew Harrer/Bloomberg via Getty Images
UNITED STATES - SEPTEMBER 13: Rep. Trent Franks, R-Ariz., arrives for the House Republican Conference meeting with GOP nominee for Vice President Mike Pence at the Capitol Hill Club on Tuesday, Sept. 13, 2016. (Photo By Bill Clark/CQ Roll Call)
WASHINGTON, DC - JANUARY 07: Representative Paul Gosar (R-AZ) speaks at a news conference to discuss legislation to revoke comedian Bill CosbyÃs Presidental Medal Of Freedom at the Cannon House Office Building on January 7, 2016 in Washington DC. Cosby, who has been accused of sexual assault by more than 50 women, was awarded his Medal of Freedom in 2002 by President George W. Bush. (Photo by Paul Morigi/WireImage)
UNITED STATES - MARCH 9: Rep. Morgan Griffith, R-Va., attends a House Energy and Commerce Committee markup in Rayburn Building regarding the bill to repeal and replace the the Affordable Care Act, March 9, 2017. (Photo By Tom Williams/CQ Roll Call)
WASHINGTON, DC - JULY 10: Doctor and Congressman Andy Harris (D-MD) works with staff on an amendment to overturn the city's marijuana decriminalization law, on Capitol Hill in Washington, DC Thursday, July 10, 2014. Rep. Harris represents Maryland's 1st Congressional District of Maryland. (Photo by Melina Mara/The Washington Post via Getty Images)
Representative Jim Jordan, a Republican from Ohio, questions Loretta Lynch, U.S. attorney general, not pictured, during a House Judiciary Committee in Washington. D.C., U.S., on Tuesday, July 12, 2016. Lynch rejected Republican demands to discuss her decision against prosecuting Hillary Clinton before a House panel whose chairman said the former secretary of state's careless handling of official communications may have jeopardized U.S. national security. Photographer: Pete Marovich/Bloomberg via Getty Images
UNITED STATES - SEPTEMBER 13: Rep. Raul Labrador, R-Idaho, arrives for the House Republican Conference meeting with GOP nominee for Vice President Mike Pence at the Capitol Hill Club on Tuesday, Sept. 13, 2016. (Photo By Bill Clark/CQ Roll Call)
UNITED STATES - DECEMBER 9: Rep. Thomas Massie, R-Ky., and Rep. Walter Jones, R-N.C., (not pictured) hold a news conference on Wednesday, Dec. 9, 2015, outside of the Capitol to de-authorize use of Capitol office space and staff provided to the recent ex-Speaker of the House. (Photo By Bill Clark/CQ Roll Call)
UNITED STATES - DECEMBER 11: Alex Mooney, Republican congressional candidate from West Virginia, is interviewed by Roll Call. (Photo By Tom Williams/CQ Roll Call)
Representative Gary Palmer, a Republican from Alabama, listens during a House Budget Committee markup hearing in Washington, D.C., U.S., on Thursday, March 16, 2017. While the GOP bill, called the American Health Care Act, was approved by a third committee in the House of Representatives on Thursday, the 19-17 vote was the first time Republicans crossed party lines to join Democrats against the bill. Photographer: Andrew Harrer/Bloomberg via Getty Images
Rep. Steve Pearce (R-NM) speaks during an event at the Smithsonian National Museum of the American Indian to challenge the sale of American Indian artifacts and remains in France May 24, 2016 in Washington, DC.
In an international battle stretching from Native American lands in the American West to the auction houses of Paris, two tribes on May 24, renewed a years-long campaign to prevent the sale of sacred objects. The Acoma Pueblo Nation located in New Mexico and The Hoopa Valley Tribal Nation of California have announced their opposition to a scheduled sale next week of close to 500 artifacts at Paris' EVE auction house.
/ AFP / Brendan Smialowski (Photo credit should read BRENDAN SMIALOWSKI/AFP/Getty Images)
UNITED STATES - AUGUST 07: Rep. Scott Perry, R-Pa., of PA-04 district, delivers an address to constituents during a town hall meeting at the Hamilton Health Center in Harrisburg, Pa. (Photo By Tom Williams/CQ Roll Call)
UNITED STATES - MAY 29: Rep. Ted Poe, R-Texas, arrives for the House Judiciary Committee hearing on 'Oversight of the United States Department of Homeland Security' on Thursday, May 29, 2014. (Photo By Bill Clark/CQ Roll Call)
UNITED STATES - MAY 24: Rep. Bill Posey, R-Fla., leaves the Capitol Hill Club after a meeting of the House Republican Conference, May 24, 2016. (Photo By Tom Williams/CQ Roll Call)
Representative Mark Sanford, a Republican from South Carolina, listens during a House Budget Committee markup hearing in Washington, D.C., U.S., on Thursday, March 16, 2017. While the GOP bill, called the American Health Care Act, was approved by a third committee in the House of Representatives on Thursday, the 19-17 vote was the first time Republicans crossed party lines to join Democrats against the bill. Photographer: Andrew Harrer/Bloomberg via Getty Images
UNITED STATES - APRIL 20: Rep. David Schweikert, R-Ariz., attends a news conference to announce 'The Visa Transparency Anti-Trafficking Act,' at the Senate Swamp on the East Front of the Capitol, April 20, 2016. The event featured testimony from Shandra Woworuntu, a survivor of sex-trafficking. (Photo By Tom Williams/CQ Roll Call)
UNITED STATES - JULY 15: Rep. Randy Weber, R-Texas, participates in a discussion with reporters in Rayburn, titled 'Conversations with Conservatives, ' at which he and others fielded questions on illegal immigrants attempting to cross the border and other issues, July 15, 2014. (Photo By Tom Williams/CQ Roll Call)
UNITED STATES - NOVEMBER 30: Rep. Ted Yoho, R-Fla., leaves the House Republican Conference meeting in the Capitol on Wednesday, Nov. 30, 2016. (Photo By Bill Clark/CQ Roll Call)
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The caucus has already called on Republican leaders to secure a tax reform deal by keeping Congress in session through August, when lawmakers are due to take a lengthy summer break.
"We need to get tax reform done sooner than later, and by that we should have a real proposal that we start debating before we leave at the end of July," Representative Chairman Mark Meadows, chairman of the Freedom Caucus, told a Heritage Foundation forum.
Meadows recommended that Republican leaders acknowledge that there is no consensus on the controversial border adjustment tax proposal favored by House Speaker Paul Ryan to move the tax debate forward.
A border adjustment tax on imports has been promoted as a way both to attack the U.S. trade deficit and generate revenues that would help avoid paying for tax cuts by expanding the national deficit. Trump, however, did not include a border adjustment tax in his proposed budget.
Representative Jim Jordan, Freedom Caucus co-founder, said tax reform could have trouble moving forward because House Republicans are having trouble agreeing on a budget with reconciliation instructions needed to allow Republicans to bypass Democrats in passing a tax overhaul.
"If you don't get a budget agreement, you can't get reconciliation. If you don't have reconciliation, you can't get tax reform," Jordan told the forum.
He suggested that Freedom Caucus members could agree to higher budget spending levels if reconciliation instructions included welfare reforms intended to save $400 billion in spending over a decade.
"We think that is the key to unlocking this road block that we're in. I don't see any other way out of it to get a budget agreement," Jordan said.
Meanwhile, Meadows voiced support for allowing U.S. corporations to repatriate an estimated $2.6 trillion in cash held overseas at a reduced 8 percent tax rate.
Meadows said the caucus does not plan to support a proposal that would allow full expensing for corporations, a policy backed by House Republican leaders. The policy, which would allow companies to write off capital investments immediately, would be too expensive without the border adjustment tax and revenue-raising proposals that caucus members oppose. (Reporting by David Morgan; Writing by Eric Walsh; Editing by Tim Ahmann and Leslie Adler)