U.S. House moves forward on tax reform by adopting budget plan

WASHINGTON (Reuters) - The U.S. House of Representatives took a major step toward overhauling the U.S. tax code on Thursday by approving a fiscal 2018 budget resolution intended to aid the future passage of tax legislation, and sending the measure on to the Senate.

The spending blueprint for fiscal year 2018, adopted by a 219-206 vote, would unlock a legislative tool allowing Republicans to pass tax legislation through the Senate while avoiding opposition from Democrats who control 48 of the upper chamber's 100 seats.

But the action also sets the stage for a potential clash with Senate Republicans, who are considering a markedly different spending plan. While the House budget calls for revenue-neutral tax reform, a proposed Senate plan would allow tax legislation to add $1.5 trillion to the deficit.

The Senate, which is on recess next week, could vote on its version as soon as the week of Oct. 16.

But the House and the Senate must both pass the same measure for it to take effect. A unified version would have to be hammered out in bicameral negotiations and approved by the two chambers.

(Reporting by David Morgan; Editing by Nick Zieminski)