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What Does "Winning" Look Like?

What Does "Winning" Look Like?
AP Photo/Ira Schwarz, File

Dear Reader —

Tax reform or tax cuts? The question turns on the recondite particulars of tax policy and legislative procedure, but the answer will impact what happens on the Hill over the next few months, to say nothing of citizens’ wallets. 

It’s now common wisdom that Republicans need a “win” on taxes. And it’s no doubt true, politically speaking. But what is a “win”? Some Republicans, including Speaker Ryan, want to take advantage of their party’s historic majorities to pass tax reform — a comprehensive restructuring of the tax system — according to conservative economic principles. Beyond the usual difficulties of passing a bill of such import, a key issue is whether the plan would be “revenue neutral” — a budgetary requirement without which significant tax cuts will only be temporary.

Other Republicans prefer simple tax cuts, relieving pressure to find the “pay-fors” needed for comprehensive reform. Some conservative members dismiss worries about blowing up the deficit altogether, arguing that the resultant boost to the economy would more than make up the difference. One thing is certain: tax cuts would be easier and also give Republicans something to point to, even while sacrificing the opportunity for broad-based and long-term reform.

The last comprehensive tax reform bill, signed into law by President Reagan in 1986, provides an illustrative contrast. One of Reagan’s two signature “tax cuts,” the Tax Reform Act of 1986 did include sweeping cuts, in addition to simplifying the tax code overall. But it was revenue neutral, offsetting these cuts by closing loopholes and raising rates elsewhere, including on corporations. The bill passed with bipartisan support.

By contrast, congressional Republicans today plan to use a parliamentary procedure known as budget reconciliation, allowing them to pass legislation along party lines and without a filibuster-proof majority. In theory, this enables them to formulate a genuinely conservative plan without having to make concessions to Democrats. But it also puts stringent budgetary conditions on what kind of bill they can pass and leaves them with a thin margin when it comes to Republican votes.

Thus, as with health care, the fate of tax reform will come down to the Senate. Given the politics in the upper chamber, to say nothing of the ideological divisions within the party as a whole, success won’t come easy. If something does pass, bet on cuts, not reform.

These are some of the many issues taken up at RealClearPolicy over the past week. Below you will find just a few highlights.

— M. Anthony Mills, editor | RealClearPolicy


The GOP Doesn’t Have a Budget Plan. In our own pages, James C. Capretta criticizes budget proposals from the House and Senate. 

The EPA’s Quest to Unravel the Clean Power Plan. Also in our pages, Jay Hakes takes issue with the administration's reasoning in rolling back Obama’s signature program to combat climate change. 

Rebuild Strong, Not Green, in Puerto Rico. In The Wall Street Journal, Mark P. Mills contends that a “greener grid would do nothing to minimize suffering after the next hurricane.” 

White Nationalism vs. Economic Nationalism. The American Prospect’s Robert Kuttner urges Democrats to offer a “compelling alternative” to Steve Bannon’s nationalist program. 

Is North Carolina Really Becoming More Urban? In RealClearPolicy, Mac McCorkle challenges a popular narrative about urban development. 

Should We Fear Robots? Big Questions Online interviews sociologist Paul McClure about his research on how workers are responding to the latest wave of automation.

Health Care Costs Aren’t Just About Economics. In RealClearHealth, Marschall S. Runge spotlights innovations in the health industry that will both improve care and lower costs. 

How One Kansas Community Said “No” to Corporate Welfare. Also in RealClearPolicy, Erica York applauds a local effort to prevent the state from offering generous corporate tax breaks. 

Identity Politics Isn’t the Problem for Dems. It’s the Solution. In The New Republic, Lee Drutman counters a popular narrative on the Left.

What College-Bound Seniors Don’t Know Hurts Them. In RealClearEducation, Ryan Streeter writes that information about the return on investment at certain schools and for certain majors is essential when choosing a college. 

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