The GOP Could Enact Another Tax Cut This Year

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When House Republicans passed their tax 2.0 last week and then recessed until the lame duck session that begins this November, the presumption was that this latest GOP descent into bigger budget deficits was nothing more than a pre-election ploy that would never go any further.

And with Majority Leader Mitch McConnell (R-KY) saying that the Senate had no plans to take up whatever the House passed before the election, that seemed like a safe bet.

But contrary to what’s currently being assumed, 2.0 could definitely become law this year.

It all has to do with the filibuster.

The House-passed tax bill may be filibustered in the Senate and there’s no way that enough Democrats will join Republicans to provide the needed 60-vote margin to stop the debate and get to a vote. This will be especially true in a lame duck when it’s two years before the next election and fear of voter retribution is at its absolute lowest point.

This can’t-stop-a-filibuster problem is the GOP’s own doing. While the reconciliation procedures of the congressional budget process would have prevented a filibuster, reconciliation only happens pursuant to instructions included in a budget resolution and McConnell and Speaker Paul Ryan (R-WI) decided early this year that there wouldn’t be one. That decision prevented reconciliation from being used and has stopped 2.0 from being enacted.

McConnell and Ryan were making a purely political calculation. They wanted to protect the GOP representatives and senators running for reelection from having to vote in favor of a budget resolution that projected trillion-dollar deficits.

But the need to protect these House and Senate members won’t exist after Election Day. That will make a budget resolution and reconciliation acceptable and, therefore, tax 2.0 doable.

It won’t be easy, but it’s certainly not impossible.

First, the House and Senate would quickly have to adopt a fiscal 2019 budget resolution with reconciliation instructions that require the 2.0 tax changes.

Second, the House-passed 2.0 would have to be designated as the legislation required by the just-adopted budget resolution’s reconciliation instructions or the House would need to re-pass 2.0.

Third, with a simple majority, the Senate could either pass its own 2.0 or…and much more likely…pass the House-adopted bill.

Fourth, the 2.0 bill now adopted by the House and Senate would then go to the president for his signature and enactment.

Don’t dismiss this out-of-hand.

The GOP has already shown its willingness to use the budget process very creatively when it passed two budget resolutions in 2017 so reconciliation could be used twice — once to try to repeal the Affordable Care Act and once for tax 1.0. This would just be a variation on that theme.

In addition, the Republican political considerations will all change significantly after the election, especially if they lose control of one or both houses. In particular, the GOP may want to increase the budget deficit as much as possible to limit what the Democrats are able to do legislatively when they’re in charge in the next Congress.

Finally, if it’s not enacted during this lame duck, the GOP’s ability to reward its supporters and donors with the tax changes provided in 2.0 may be gone for two years or longer. Republicans may want to go for it while they are still able to do so.

Follow Stan Collender on Twitter @thebudgetguy

 

 

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