Republicans who control Congress moved one step closer Friday to overhauling the tax code — one of their top legislative goals — in an effort that also puts a repeal of the Affordable Care Act on the back burner for at least the near future.
The Senate budget committee announced provisions that will help the GOP expedite passage of the still-unwritten tax bill as well as legislation to open part of the Arctic National Wildlife Refuge to drilling.
Republicans want to pass tax reform using budget reconciliation, a procedural tool that would allow them to advance their bill with a simple 51-vote majority, rather than the typical 60. Since Republicans have a 52 to 48 majority in the Senate, the lower voting threshold would make it possible for them to pass tax reform without help from Democrats.
Senate Republicans used budget reconciliation — which can only be used once per fiscal year — in their attempt to repeal and replace Obamacare this year. But despite many attempts, they failed to pass a health care bill in their allotted time to do so under reconciliation, which expires Saturday.
Now that it’s time for a new budget season, Republicans want to use reconciliation again, but this time they want to use it on tax reform. While some GOP senators called for attaching health care onto this budget reconciliation, the draft bill released Friday did not include it.
That decision essentially punts health care down the road until the next budget season, around April, when they can again try to pass it under the special reconciliation rules.
But for that to work, the Senate must first pass a budget resolution, which includes instructions on how much the tax-writing committees can essentially spend in tax cuts. In this case, the Senate finance committee was told it could approve tax cuts that would add $1.5 trillion to the deficit over the next ten years when they would expire unless Congress voted to extend them.
Many Republicans say they want “permanence” with this tax reform package, meaning they want a plan that won’t expire in 10 years. To make that happen, they have to come up with a plan to show that the tax cuts will be paid for beyond the first decade.
So far Republicans are arguing that economic growth generated by the tax policy changes will ultimately pay for the tax cuts, but it’s unclear what those models will look like. One budget committee aide said they assume economic growth estimates will show the budget will generate a surplus of $79 billion in 2026 and $197 billion in 2027, making up for any lost revenue from the tax cuts.
Democrats and the non-partisan Congressional Budget Office have rejected this assessment, known as “dynamic scoring” on Capitol Hill and that issue will be a source of contention throughout the debate.
Unrelated, the GOP push to lift the oil and gas drilling ban in part of the Arctic National Wildlife Refuge in Alaska got new life because the budget resolution includes a provision that would allow that to be approved with just 51 votes.
The budget instructs the energy and natural resources committee to find $1 billion in deficit savings using the same reconciliation rules as the attempted tax overhaul. And while those instructions don’t mention ANWR specifically, easing the ban is a longtime goal of committee Chair, Lisa Murkowski, an Alaska Republican, and it is expected that she will pursue that policy.