Majority Leader Mitch McConnell has announced his intention to move forward on tax reform with no Democrat support. To advance the bill without a filibuster by Democrats, Republicans will need to use the Senate’s budget reconciliation process that requires only 51 votes for cloture.
“We will need to use reconciliation,” McConnell told reporters, adding that Democrats are “not interested in addressing” items that Republicans favor. McConnell referenced a letter signed by 45 of the 48 Senate Democrats in which they refused to consider tax plans that cut rates for “the top 1 percent” or that added to the deficit. At the same time, Democrats called for a bipartisan reform bill.
“I don’t think this is going to be 1986, when you had a bipartisan effort to scrub the code,” McConnell said. He added, “Democratic senators who did not sign the letter who may be open to pro-growth tax reform.”
Unlike healthcare reform, where no Democrats broke ranks to vote with Republicans, the failure of three Democrats to sign the letter on tax reform may represent an opening to Republicans. Joe Manchin (D-W.V.), Heidi Heitkamp (D-N.D.) and Joe Donnelly (D-Ind.) are all up for reelection in 2018 in states that Donald Trump won. They are expected to have tough re-election battles, which may inspire them to side with Republicans on the tax bill.
There are difficulties for the Republicans as well. McConnell faced heavy criticism from his own side for his heavy-handed tactics and secret drafting of the healthcare bill. The secrecy and rapid changes in the content of the bill apparently swayed some senators to vote against the Obamacare reform.
Grover Norquist, president of Americans for Tax Reform, recently told Politico that there was less disagreement among Republicans on tax reform than there had been on healthcare. Norquist claimed that the GOP was at “97 percent” agreement after the decision to drop the border adjustment tax on imports, adding, “It’s now a question of making it fit” within the rules for reconciliation bills.
Under Senate rules, reconciliations can be used to pass bills that increase the deficit, but, per the Center on Budget and Policy Priorities, senators can still block bills that are projected to raise deficits beyond the period that the budget resolution covers. Because scoring by the Congressional Budget Office often predicts that tax cuts will add to the deficit, these changes may be required to be temporary, probably less than 10 years, in order to be enacted as a budget reconciliation.
If McConnell and congressional Republicans can avoid the mistakes and division that they experienced in the run-up to the healthcare vote, they stand a slightly better chance of enacting tax reform. If Republicans can split off some Democrat votes to pass a bipartisan bill it would be a major victory for the Trump Administration and one that is sorely needed.