Opinion Why tax reform might break the Republican Party

19:50  12 september  2017
19:50  12 september  2017 Source:   The Week

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Should that happen, it would utterly undo the Republicans ' identity as a party , the coherence of their message, and any claim they may have left to their voters' loyalty. So the use of reconciliation to pass tax reform looks less like a power play by a dominant and confident party

Tensions within the Republican Party will undoubtedly complicate the path to tax reform , as well, and for Most are expected to be eliminated in a simplified system. But each of those tax breaks has a House Republicans have set a goal of approving tax reform by August, but the Senate may not

President Trump acknowledges House Freedom Caucus leader Rep. Mark Meadows after the May health-care vote in the House.© REUTERS/Carlos Barria President Trump acknowledges House Freedom Caucus leader Rep. Mark Meadows after the May health-care vote in the House. Editor’s note: The opinions in this article are the author’s, as published by our content partner, and do not necessarily represent the views of MSN or Microsoft.

Can President Trump and the Republican Party accomplish anything? First they bungled the ObamaCare repeal. Then they bungled the debt ceiling, when Trump breezily agreed to a deal last week that will give Democrats maximum leverage in December. And soon they will bungle the party's most fundamental reason for existing: cutting taxes for rich people.

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Related: Why Trump Needs the Border Tax to Secure Across-the-Board Tax Reform . After Republicans met yesterday, there was speculation that the House might try again to bridge differences between moderates and the Freedom Caucus.

However, the party ’s leadership appears to be making the same mistakes they did in the effort to repeal the ACA. There is a reason why Congress hasn’t passed a major tax reform package in more than three Democrats may be dancing on the grave of the Republican effort to repeal and replace the

The reasons are twofold: Reconciliation and the fact that the various Republican factions are irreconcilable.

First, reconciliation. As Stan Collander, a federal budget expert who served on the staffs of both the House and Senate budget committees during his career, pointed out in Forbes, the Republicans did something funny on the way to designing their legislative agenda: They decided to use reconciliation to pass everything. That's the procedural gambit that allows bills to be passed through the Senate with simple majorities, avoiding the 60-vote requirement of the filibuster.

This strategy comes with a few catches: Anything passed by reconciliation must restrict itself to fiscal issues of taxing and spending, and it must not increase the deficit beyond the first 10 years. These hurdles have already caused the Republicans plenty of headaches.

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Republicans are not so much a political party as a loose affiliation of people interested in giving tax breaks t. Without Obamacare repeal resetting the revenue base, tax reform is really in peril. Republicans may go from two huge legislative victories to none.

There's also this: To use reconciliation, Congress must pass a budget resolution detailing how it will be used for that year. The fiscal year 2017 resolution, for example, contained the instructions for repealing and replacing ObamaCare. The plan was to use the 2018 budget resolution for tax reform, but Congress hasn't actually passed it yet. And Collander makes a convincing case they never will.

Even in the best of times, budget resolutions are hard to pass, because they commit Congress to an overall vision. And this is not the best of times. The last few months have revealed vast gaps between the more centrist Republicans and their hardcore right-wing colleagues in the House Freedom Caucus and the Republican Study Committee. The latter groups have enough votes to scuttle any bill passed purely by GOP majorities. And the only reason the 2017 budget resolution passed is because "there was no pretense that it was a real budget," as Collander put it. It only existed to make ObamaCare repeal possible, and everyone in the GOP knew it.

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Why didn’t we just reform slavery instead of repealing it? But somehow we can’t repeal it. You know, the Republican Party , I must tell you, I guess I am a little “So, how can the GOP start winning larger shares of non-white voters? Reforming the immigration system might not be the answer.

But the failure to kill ObamaCare soured hardline conservatives against using the resolution purely for procedural purposes: "The House Freedom Caucus let it be known last January that its members wouldn't vote for another nondescript budget resolution just to put reconciliation instructions in place," Collander explained. As a result, any budget resolution that can pass the House likely can't pass the more moderate Senate, and vice versa — the TrumpCare dilemma reborn in another form.

Add on the avalanche of other chores the Republicans face — passing the appropriations that do keep the government running, dealing with the debt ceiling, passing aid for Hurricanes Harvey and Irma — and you can see how a budget resolution could be an impossible lift. No budget resolution means no reconciliation, and no reconciliation means no tax reform.

As Collander relates, the last big successful tax code overhaul occurred in 1986, and reconciliation never even came up as a possibility. Partially that was due to necessity: President Reagan was a Republican, but the legislature was controlled by Democratic majorities. But partially it was also due to different norms: Everyone understood that for tax reform to stick, it needed to have bipartisan credibility. Since then, America politics have become much more tribal, with the Republicans leading the charge. So fast forward to 2001, and GOP congressional majorities did use reconciliation to pass major tax goals under President Bush.

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× Why The Sweeping Tax Reform Proposal Is Already Doomed. Publicly, many Republicans have been distancing themselves from the legislation, because they see it as a potential problem for the party 's efforts to slow walk its legislative agenda until the midterm elections.

Fractures within the Republican Party have grown more glaring. And while pivoting to tax reform suggests that In May , he told Bloomberg News that tax reform has to be revenue neutral. As many tax policy experts like to say, every tax break and every deduction has a constituency, and the

But calling that bill tax "reform" would be silly: It was a giant tax cut for the wealthy, designed to sunset after 10 years so as not to fall afoul of reconciliation's budget-neutrality requirement. It was a power play by the dominant party. And the GOP has reason to try the same thing again. Even when the 2001 tax cuts sunsetted, allowing them to go away proved too politically painful: Most were made permanent in a 2013 deal between Republicans and President Obama.

But is the GOP the same party they were even in 2001? Can they still hold together to pull off such a move?

Consider the fact of President Trump himself, who claimed the GOP nomination despite the horror and opposition of nearly every major power center in the Republican Party. Is he really capable of marshalling the entire party to a legislative victory? Then there's the internal rift among GOP legislators, with the right wing nihilistically scuttling any bill that doesn't meet their ideological litmus test. The Republican Party has spent years feeding its members fear and paranoia, plus promises of massive tax cuts and rollbacks of the welfare state if they can just take back power.

Now large portions of the party are prepared to demand all those things or bust.

All these pressures put the GOP at profound risk of fracturing completely. In which case, both Republican moderates and President Trump might negotiate with Democrats. Should that happen, it would utterly undo the Republicans' identity as a party, the coherence of their message, and any claim they may have left to their voters' loyalty.

So the use of reconciliation to pass tax reform looks less like a power play by a dominant and confident party, and more like a desperate attempt by the Republican leadership to fence in its own members: to force them to work with one another, lest they tear themselves apart. But the most remarkable and pathetic aspect of this whole drama is that the fence likely won't hold.

So say goodbye to the Republican Party as we know it. And say goodbye to tax reform.

The bumpy road to tax reform is still driveable .
A word of caution to anyone preparing to throw dirt on the prospect of tax reform this year: Don't break out your shovels just yet. Tax reform is still alive because of a strategic decision by the White House and Republican congressional leaders.The path to passing comprehensive tax reform is becoming clearer. Step one was for the "Big Six" - the White House, Treasury secretary, House speaker, Senate majority leader and the chairmen of the congressional tax writing committees - to get Republicans on one page. This was achieved in their joint statement released in July with more detailed consensus principles expected the week of September 25.

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