Opinion Why tax reform might break the Republican Party

19:50  12 september  2017
19:50  12 september  2017 Source:   theweek.com

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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

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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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In theory, the Republican Party ’s proposed legislation for tax reform is easier than health care On Wednesday, House Speaker Paul Ryan signaled that he’d heard their tax complaints, acknowledging for the first time publicly that the so-called SALT deduction might remain on the books after all.

He also indicated that he couldn’t win a primary battle in the current upheaval many call the Republican Party . “That’s true, why should he get back when I only got ? The wealthy gets all the breaks . Tax Reform could be make-or- break GOP legislation.

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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If the majority party ’s lawmakers can quickly agree on a compromise—a big “if”—it may happen by the end of the year. Why do Republicans think the US needs tax reform in the first place? At its core, the proposals are mostly about cutting corporate taxes .

That stance puts pressure on the party to put together a plan that is pro-growth and isn't too big a net tax cut in the traditional scoring models. So far, he has positioned himself as though he wants to play a similar role in the Republicans ' tax reform effort.

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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You have successfully subscribed to the Breaking News email. After six months, Republican leaders have released the broad outline of their tax reform plan, a policy area that unites a party stricken with divisions and "If we don’t do tax reform , we might not be in the majority,” he said.

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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But other Republican leaders are pumping the breaks . Of course, tax reform passed both the House and the Senate on a party -line vote, despite being hugely unpopular. They wanted to know why Pruitt delayed an Obama-era rule banning that chemical, which has killed dozens of people who

That's the behavior of a broken party . This doesn't mean "The Tax Cut and Jobs Act" won't pass Congress in some form . In a functional party system, this would serve as the basis for a broad-based tax - reform bill that modestly raised taxes on corporations and well-to-do households.

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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