Politics The Republican tax reform bill will live and die by this obscure Senate rule

17:41  14 november  2017
17:41  14 november  2017 Source:   Vox.com

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The tax reform bill they are pushing through the Senate will live and die by a complicated rule — known as the “Byrd Rule ,” a condition of the “budget reconciliation” process that allows Republicans to pass legislation with only 51 votes in the Senate .

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Republicans have a math problem.

The tax reform bill they are pushing through the Senate will live and die by a complicated rule — known as the “Byrd Rule,” a condition of the “budget reconciliation” process that allows Republicans to pass legislation with only 51 votes in the Senate. Because of how they set it up, Republicans’ tax bill can only increase the deficit by $1.5 trillion in the first 10 years and no increase outside that window.

But as it stands, neither the House tax bill, nor the Senate’s, pass this test.

The Congressional Budget Office estimates the House bill will increase the deficit by $1.7 trillion and the initial analyses of the Senate bill show it is on track to increase the deficit outside the 10-year window — the plan’s largest impact on the deficit is by $216.7 billion in 2027.

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More: Tax Reform Trump Tax Plan House GOP Tax Bill House Republican Tax Reform Bill . Report: The enormous Republican tax plan would die in the Senate because of a key rule .

Phase 4: get this bill through the Senate ’s obscure budget rules — which is the really hard part. This rule basically leaves Republicans with four options: They could pass sweeping tax cuts that will sunset after 10 years.

Maneuvering around Senate rules is not new to congressional Republicans, who recently tried, and failed, to pass Obamacare repeal through budget reconciliation. They said tax reform would be easier. Both the House and the Senate bills have tried to repeal or cap various deductions — some big, some small — striking ire with various factions of the party. But haven’t yet gotten the math to work.

It will all come down to what the Senate parliamentarian will permit. There’s no question that Republicans are desperately in search of budget gimmicks and rosy economic projections to make it all work — the question is if it will.

The Byrd Rule is the price of partisan politics

At the beginning of this year, with a bare 52-vote majority, far short of the 60-vote filibuster threshold, Republican leadership devised a plan to bypass Democrats altogether on major legislation: They would tie their major agenda items to the budget through “budget reconciliation,” a bill that can impact spending, revenue, or the debt ceiling with only a party-line vote in the Senate.

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Despite what some partisans claim, the Tax Cuts and Jobs Act lives up to its name. The House Republican tax reform bill officially abolishes the Death Tax . "It is official. The Death Tax will die ," said Grover Norquist, president of Americans for Tax Reform .

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It’s a process President Bill Clinton used to pass welfare reform in 1996 and President George W. Bush used to pass tax cuts in 2001 and 2003. It’s how President Barack Obama got several budgetary amendments to the Affordable Care Act passed. Republicans also attempted to use budget reconciliation to try to pass an Obamacare repeal bill in the Senate

As Vox’s Dylan Scott explained, any bill being passed under reconciliation has to comply with every section of the six-part Byrd Rule. “If it fails any one of those tests, it must be stripped out”:

1. The provision must change federal spending or revenue.

2. If the bill does not meet the budget resolution’s instructions to reduce the federal deficit, any provision that results in either increased spending or decreased revenue is removed until it does meet those targets.

3. The provision must only affect policies that fall under the jurisdiction of the specific committees that were instructed in the budget resolution.

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Peter King, a New York Republican , said on ABC on Sunday that “as of now, [he] would be a ‘no’ vote” on the tax reform bill . This would alienate deficit hawks on Capitol Hill. But more critically, it would transgress the rules that lets the Senate to pass the bill through the process known as reconciliation

4, The provision’s effect on spending or revenues must be more than incidental to its policy impact.

5. The provision cannot increase the federal deficit at some point in the future, beyond the typical 10-year “budget window” that is used to evaluate legislation.

6. The provision cannot change Social Security.

Republicans have tied their hands: They have passed a budget that allows them to increase the deficit by $1.5 trillion in the first 10 years, but they want to pursue massive tax cuts that appear to increase the deficit outside that 10-year window.

House Republicans are expected to vote on their tax bill this week, as the Senate is marking up its version — both would have to see substantial changes to pass the Byrd test.

The ways Republicans are trying to get around the “Byrd” question

Already Republicans are using gimmicks to get around this, the major one being passing what appears to a sweeping tax cut that will sunset after 10 years. This is what former President George W. Bush did with his tax cuts under budget reconciliation in 2001, essentially getting around the deficit restriction by making the tax cuts temporary. This House included some of this, sunsetting the $300 family credit after five years. The Senate could do the same.

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Senate Republicans are also preparing a budget resolution. Senate Majority Whip John Cornyn, R-Texas, told the Washington Examiner the Kevin Brady won't include repeal of Obamacare's individual mandate in tax reform bill . WATCH LIVE : Sarah Sanders holds White House press briefing.

Yet all but three Senate Democrats in August effectively ruled out supporting tax legislation along the lines Republicans Getting those results might be worth pushing the tax reform effort into 2018, even though GOP tax bill would raise taxes on 7 percent of people, corrected think tank analysis finds.

There’s already rumors of a temporary and permanent split in tax reform proposals among Republican members. The question is whose tax cuts are permanent and whose are temporary. Sen. Orrin Hatch (R-UT), who chairs the Senate Finance Committee, said his committee has "every intention of making the business reforms permanent" at the start of the bill’s markup — meaning it might be the individual tax cuts that will sunset, instead of the corporate rate.

One way this happens, floated by Zach Moller, senior policy analyst for the Committee for a Responsible Federal Budget, is what he calls the “Title Gambit.” Republicans could split up their tax bill into three separate titles: One would be a temporary Republican-led effort that would pursue aggressive tax cuts; a second would be permanent and comply with Senate rules; and the third would be a permanent bipartisan proposal needing 60 votes and likely find consensus around issues like the child tax credit or doubling the standard deduction. By going this route, Republicans would be able to split the impact of the deficit between budget reconciliation bills and regular order.

But again, it comes down to whether the parliamentarian will go for these separate titles, which are usually separated by committee involvement.

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Republicans may have a majority in the Senate , but if more than two Senate Republicans vote no, then the McCain has said that he sees the current path the tax bills are taking as “encouraging,” but his record on Republican tax reform efforts sheds doubt on how the Senator will vote.

Living . And the State and Local Tax Deduction isn’t the only vulnerable part of the Republican ’s tax reform proposal, which aims to sweep away most deductions other than the ones for interest on your home mortgage and charitable giving.

Some analysts have also floated the nuclear option, in which the presiding officer of the Senate — Vice President Mike Pence — just overrules the Senate parliamentarian. McConnell did not allow for this in the health care debate, but some have theorized there is more pressure for him to go to extreme lengths this time.

Either way, Republicans are relying on projections of increased economic growth from tax cuts to offset the revenue losses from those cuts, known as “dynamic scoring,” to sell their tax bill.

The Senate Budget Committee could also use a different, more ideologically conservative score of their tax plan instead of the CBO’s evaluation, like the Tax Foundation’s score, or the Treasury Department’s.

But currently, even under the rosiest of projections, economic growth alone doesn’t seem be enough to offset the full losses from the deepest cuts Republicans have proposed. The conservative Tax Foundation found the House tax bill would still increase the deficit by $500 billion, and projections from University of Pennsylvania Wharton school showed by 2040, the debt would increase by $6.4 to $6.9 trillion.

The tax cuts aren’t paying for themselves. And there’s still skepticism whether the Senate Parliamentarian will accept those growth numbers.

Conservative Group Aims to Sell GOP Tax Plan .
House Republicans passed their version of tax reform last week in a relatively drama-free vote. But as they wait for the Senate to follow their lead, a key conservative group is continuing its aggressive effort to sell the plan to an unconvinced public.American Action Network, a nonprofit organization focused on issue advocacy and allied with Speaker Paul Ryan, spent $20 million boosting tax reform efforts in the run-up to last week's critical vote.

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