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Unlocking Reconciliation

Unlocking Reconciliation
AP Photo/Jose Luis Magana

Dear Reader —

House Republicans passed the Senate’s version of the 2018 budget resolution Thursday, as Ways and Means Committee Chairman Kevin Brady predicted they would at a RealClearPolitics event Tuesday morning. This unlocks the process known as reconciliation that Republicans hope to use to pass a tax bill by Christmas without fear of a Democratic filibuster. In addition to the forbidding calendar, the narrow 216–212 vote may be a harbinger of challenges to come. What has to happen now for the GOP to get a tax bill on the president’s desk by 2018?

By adopting the Senate budget, House Republicans have “saved themselves at least a couple of weeks,” said Janice Mays, former chief counsel and staff director for Ways and Means who was a panelist at the RealClearPolitics event. But, she cautioned, “real tax reform begins when the committees of jurisdiction sit down and start debating the hard issues.” One of those hard issues is revenue shortfall. A key difference between the Senate’s budget and an earlier House version is that the former allows for up to $1.5 trillion in tax cuts, whereas the latter demanded revenue neutrality. That points to an underlying philosophical difference among congressional Republicans that could prove fateful in negotiations. To further complicate matters, the GOP tax framework released earlier this fall calls for trillions more in tax cuts.

The politics of tax reform may prove even harder than the policy. Indeed, if genuine reform is the goal, the GOP will have to find trillions of dollars in “pay-fors” to make up the difference, said panelist Jeffrey Birnbaum, president of BGR Relations and author of a widely praised book about 1986 tax reform, Showdown at Gucci Gulch. That means picking winners and losers, something lawmakers may be more than a little reluctant to do. The upshot? Republicans may go for simple tax cuts rather than reform.

That’s what Republicans have signaled by including a $1.5 trillion cushion in their budget, suggested Maya MacGuineas, president of the Committee for a Responsible Federal Budget. She sees this as a “massive shift” in the party platform, which touted fiscal responsibility under President Obama. If Republicans were serious about fiscal restraint, MacGuineas argued, they would not abandon the goal of revenue neutrality.

By contrast, Heritage Foundation’s Stephen Moore sees this as potentially part of a winning, longer-term strategy redolent of Reagan, whereby tax cuts precede a more comprehensive reform package at a later date. He conceded that “you’ve got to use dynamic scoring” — a method of incorporating estimates of future growth into budgetary assessments — to make the arithmetic work. But he remains confident that tax cuts will spur such growth — as much as 3 or even 4 percent — while the other panelists sounded highly skeptical that the proposed cuts could really bridge the gap.

There were at least two issues on which these experts did express a clear consensus, however. First, the Republicans have set themselves a challenging, not to say impossible timeline — especially considering that they do not yet have a tax bill. Second, as Moore put it, “the Republican Party is going to get absolutely destroyed” in 2018 “if they don’t get this thing done.” 

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


Democrats in Denial. The Week’s Damon Linker criticizes Democrats for failing to do “the hard and at times painful work” of building an electable coalition in the Trump era.

Trump’s Deregulation Efforts Are Driving Market Dynamism. In our own pages, Peter J. Wallison contends that by rolling back Obama-era rules, the president is giving the economy a shot in the arm. 

The Party of Lincoln Is Now the Party of Trump. The New York Times’s Thomas B. Edsall documents the rise of tribalism in both parties.

Government Grows Despite Constitutional Limits. Also in our pages, Robert J. Hanrahan Jr. argues that the federal government's reliance on private-sector contractors is both inefficient and unlawful. 

The Doom Loop of Modern Liberalism. The Atlantic’s Derek Thompson suggests why diversity and equality appear “tragically incompatible” in today’s political climate.

The Data Don’t Support Racist Policing Narrative. In RealClearPolicy, Robert Cherry spotlights statistics that undercut a widespread belief.

There Is No First Amendment Right on College Campuses. In Vox, Robert C. Post counters a popular narrative about free speech and higher education.

The NDAA Threatens National Security, Intellectual Property. Also in RealClearPolicy, Thomas A. Schatz urges Congress to eliminate provisions in the Senate’s version of the defense authorization bill. 

Made in America. In Washington Monthly, Dan Mauer contends that American workers are not the inevitable victims of globalization. 

Don’t Cut Taxes; Reform Them. In The Weekly Standard, Irwin M. Stelzer urges the GOP to resist the temptation simply to cut taxes, rather than fixing the tax system itself.

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