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‘Be careful about this’: Warnings abound as GOP considers writing off tax cuts

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It’s the accounting maneuver that could break the Senate, upend the federal budget process and explode the national debt.

That’s according to critics of a fiscal tactic that congressional Republicans are now seriously considering as they struggle to figure out how to deliver on all of President Donald Trump’s policy demands.

Adopting the “current policy baseline,” as it’s called, could be the only way for the GOP to make Trump’s 2017 tax cuts permanent and avoid painful cuts to federal programs, as well as pile on new income tax exemptions for tips, overtime and Social Security. Trump is expected to discuss the move with members of the tax-writing Senate Finance Committee at a White House meeting Thursday.

If lawmakers adopt the change, it would essentially make it appear as though extending current tax rates, set to expire at the end of the year, would cost nothing rather than the roughly $4 trillion over 10 years that nonpartisan scorekeepers estimate.

But while some Republicans argue that continuing current tax rates shouldn’t be counted toward the deficit, critics of the maneuver — including prominent GOP budget experts — say that it would be a recipe for disaster, a fiscal Pandora’s box that once opened could be used to forever excuse huge ongoing deficits.

“I would caution my friends, my Republican friends and senators up there, be careful about this,” said Bill Hoagland, the former GOP staff director for the Senate Budget Committee. “Someday you may be in the minority.”

The tactic is so tempting because it would solve a very difficult political problem for Republicans. Budget hawks in the House who do not want the party-line domestic policy bill adding to federal deficits want to ensure that planned tax cuts are closely tied to the amount of spending cuts Republicans can achieve.

Even then, the $4.5 trillion upper limit the House put on tax cuts does not leave enough room for a permanent extension of expiring tax cuts, in addition to all the other tax-related asks Trump has made.

For instance, adding on Trump’s other tax-related asks, such as income tax exemptions for overtime, tips and Social Security benefits, could add up to another $5 trillion, according to the nonpartisan Committee for a Responsible Federal Budget.

Critics say members of either party could use the maneuver to disguise trillions of spending through tax policies. Democrats argue that if Republicans move forward, they would be doing away with decades of precedent — and reneging on decades of anti-deficit rhetoric — to enact tax cuts for the wealthy.

Massachusetts Sen. Elizabeth Warren called it “magic math” in an interview and said going in that direction would end the congressional budget process as it has existed for more than 50 years.

“They can’t repeal the underlying reality, a $4.7 trillion giveaway to billionaires and giant corporations will cost $4.7 trillion,” she said, referring to how much the tax cut extensions are estimated to cost with interest.

Said Sen. Mark Warner (D-Va.), who signed onto a recent letter with Warren questioning the GOP’s strategy, “If this was done in the accounting world, you wouldn’t be an accountant for very long.”

Meanwhile, the leading advocate of moving to a current policy baseline, Senate Finance Chair Mike Crapo (R-Idaho), argued that it would rectify budget scoring rules that favor higher spending over keeping taxes low.

“If you’re not changing the tax code, you’re simply extending current policy, you are not increasing the deficit,” Crapo said on Fox Business in January. “We’ve got to get some kind of sensibility into the way that we score.”

Sen. John Kennedy (R-La.), a Budget Committee member, brushed off the idea that Republicans were undermining the budget procedures in place since 1974 — but also acknowledged that turnabout could be fair play when Democrats get their next governing trifecta.

“They will probably use current policy themselves in the future when they’re back in the majority,” he said.

Besides being controversial from an accounting perspective, the current policy baseline represents a major political gamble for Republicans, with the fate of potentially all of Trump’s tax agenda hanging in the balance.

That’s because the GOP might not know for weeks, if not months, if the maneuver will pass muster with the Senate’s parliamentarian. With a permanent extension of the expiring tax cuts moving toward the center of the Republican must-do list, an adverse ruling could create a huge hole in the GOP’s math.

“It would complicate making the tax cuts permanent,” said Sen. Lindsey Graham (R-S.C.), who chairs the Budget Committee.

That could create pressure for Republicans to overrule or even fire the parliamentarian — a move that would upend the delicate balance senators of both parties have adhered to for decades: Only bills that comply with strict fiscal rules aimed at reducing deficits can be exempted from the chamber’s 60-vote requirement for ending debate and moving to a final vote.

“As far as I’m concerned, that might as well give away the filibuster in the Senate,” Hoagland said.

Republicans, for their part, say they aren’t doing anything out of compliance with the longstanding budget rules. And there’s widespread skepticism inside the Senate GOP that they would ever vote to overrule the longtime parliamentarian, Elizabeth MacDonough.

We can say “it’s a $4 trillion deficit that we’re going to add into this, or we can say it’s current policy, but everyone knows it’s the exact same the next day,” said Sen. James Lankford (R-Okla.) in an interview. “So it’s nomenclature.”

Key GOP staff are already quietly meeting with the parliamentarian to try to get informal vibe checks on what she is thinking. Though senators won’t get a formal ruling until they go through what’s called a “Byrd bath” — when the reconciliation bill is vetted to make sure it complies with the rules that allow them to pass it by a simple majority — they can and frequently do have conversations with the parliamentarian’s office before that as they try to game out their procedural strategy.

“We think the law is pretty clear … but these things are all subject to discussion and arguments made in front of the parliamentarian,” Senate Majority Leader John Thune said in a brief interview, while cautioning that they were a long way away from that point.

But there’s skepticism from former longtime congressional staff and budget experts that the Senate GOP plan will fall within the rules of reconciliation. Sen. Jeff Merkley (D-Ore.), the top Democrat on the Budget Committee, predicted the parliamentarian won’t green-light the GOP strategy because it “seems like a pretty big stretch” of the rules.

George Callas of Arnold Ventures, who served as former Speaker Paul Ryan’s top tax aide during the drafting of the 2017 law, said adopting the current policy baseline would amount to a “huge gimmick.”

“My understanding is that the Senate parliamentarian gives a great deal of weight to the existing rules and the precedents and takes a skeptical look at just expedient reinterpretations of those rules for political reasons,” he said.

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Congress

Hill Republicans want Trump to solve their internal problems

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House infighting is threatening to sink the GOP agenda on Capitol Hill. Now Republicans are hoping their most effective whip — President Donald Trump — is ready to come off the sidelines.

The push for the White House to take a more active role comes as the GOP finds itself stalemated on several fronts with no sign that they will be able to navigate a way forward without Trump’s direct intervention.

The House floor was effectively closed for business Tuesday as days of internal negotiations failed to produce a deal among competing GOP factions, allowing Speaker Mike Johnson to extend a soon-to-expire surveillance law or pass the much-anticipated farm bill.

Meanwhile, there’s growing frustration among Senate Republicans and Trump allies that the House hasn’t yet taken up their bill funding most of the Department of Homeland Security after Saturday’s shooting at the White House Correspondents’ Dinner. Instead, in a bid to satisfy his own members, Johnson wants to make small changes to the bill, which would further drag out the partial shutdown that is already on day 74.

Senate Majority Leader John Thune, who is careful to avoid telling the House what to do, was uncharacteristically direct Tuesday with his frustration over the other chamber’s refusal to pass a DHS bill senators have already twice passed unanimously. He suggested Trump needed to intervene.

“We’re trying as best we can to coordinate strategy with the House, but … it’s going to take, obviously, I think the involvement of the White House to bust some of these things loose,” Thune said.

He said to House Republicans who are still criticizing the Senate’s plan, “I guess my question is, what was the alternative? That’s what I said to them at the time. I mean, tell me, give me a better option.”

Republicans on the House Rules Committee agreed Tuesday night to tee up the votes on the spy-powers extension and the farm bill, among other measures, but there’s no guarantee the rest of the House GOP will fall in line Wednesday on the floor.

Trump hasn’t been completely on the sidelines as the House has floundered. He sent a Truth Social message Monday encouraging the House to support a separate budget plan aimed at providing immigration enforcement funding — part of a two-track plan to end the shutdown. His budget office issued a memo Tuesday evening urging support of the Senate-passed legislation funding the rest of the department, which could run out of money to pass employees as soon as next week.

Separately, White House deputies tried earlier this month to pressure House GOP hard-liners to back down in the fight over extending a spy law targeting foreigners abroad known as Section 702.

What’s missing in the minds of some Republican lawmakers is the type of sustained, one-on-one arm-twisting that Trump deployed on House Republicans last year on several occasions — including to push through the GOP’s tax-cuts-focused megabill and to get Johnson elected speaker.

Trump has instead been focused in recent days on the state visit from King Charles III of the United Kingdom, not to mention the military campaign in Iran he launched two months ago alongside Israel.

“Mike’s clearly having to wrestle with his House members, and it’s not his fault,” said Sen. John Kennedy (R-La.). “He’s good, but he can’t work miracles. And I think the president’s going to have to step in.”

A White House spokesperson did not respond to a request for comment on Thune’s call for more presidential involvement on Capitol Hill.

One House Republican, who has been in touch with Trump officials and was granted anonymity to describe behind-the-scenes conversations, said the White House wants “DHS fixed this week.” But so far Trump’s arm’s-length overtures haven’t worked with House hard-liners who want to expand the scope of the party-line immigration enforcement bill to encompass other conservative priorities.

Johnson has taken steps to assuage the holdouts. He has offered to attach a key hard-right priority — a permanent ban on the creation of a government-sponsored digital currency — to the spy-law extension before sending it to the Senate. The speaker is separately seeking to appease a group of farm-state members by attaching a year-round ethanol fuel measure to the bill authorizing agriculture programs.

Thune, in an interview, shot down the idea that a Section 702 renewal with a digital currency ban attached could pass the Senate, calling it a “bad idea” that is “not happening.”

Underscoring Johnson’s dilemma, the comments sparked a public rebuke from one of the conservative hard-liners, Missouri Rep. Eric Burlison, who said, “I don’t care what Thune thinks.”

Plenty of Republicans — both centrists and conservatives — are growing frustrated that Johnson isn’t just putting the Senate-approved DHS funding bill, the other part of the party’s two-part plan, on the floor. The bill includes funding for Secret Service paychecks, among other key security-related matters.“This is batshit,” another House Republican said about Johnson’s plan to push through several other bills this week but not yet the DHS fix.

House GOP leaders want to put a reworked DHS funding bill on the House floor Thursday — but only after they clear the separate budget resolution Wednesday.

Scores of conservatives have threatened to tank the Senate-passed bill unless the speaker strips out language that explicitly zeroes out funding for agencies including Immigration and Customs Enforcement. But many Republicans believe those holdouts would quickly cave — and end the record-long DHS shutdown — if Trump would simply apply some pressure.

Rep. Don Bacon (R-Neb.) said in an interview Trump should get more personally involved in pushing House Republicans on both the DHS legislation and the surveillance bill. Rep. Rob Bresnahan (R-Pa.), meanwhile, said in a statement it was “absurd” DHS was still shut down and that it is “beyond time to open the government.”

Thune said Tuesday he also believed House Republicans should “just pass the bill” as GOP leaders discussed whether they could “massage” the contentious ICE funding language to the hard-liners’ liking without threatening its rapid passage in the Senate.

According to two administration officials and a person close to the White House who were granted anonymity to candidly describe the situation, there is little optimism inside DHS that the shutdown will end quickly.

“That is really leading people to question why we even do [our jobs] anymore if Congress can’t do their jobs,” one of the administration officials said.

Within DHS, the feeling is “we all know what the end result is going to be, so just do it — make it happen,” the person close to the White House said. “Instead it continues to drag on and drag on.”

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Congress

House panel moves 3 priority bills toward floor vote

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House GOP leaders managed to finally clear a rule for the farm bill, a three-year FISA extension and a budget resolution for immigration enforcement spending, after a lengthy Rules Committee hearing Tuesday.

But some Republicans are already threatening to tank the rule when it heads to the floor Wednesday around 10:30 a.m. — leaving a huge task for Speaker Mike Johnson and his leadership team as they wrangle votes. Johnson can only lose a couple of GOP votes with full attendance for the party-line rule vote.

Rep. Chip Roy (R-Texas) told Blue Light News Tuesday night the rule’s fate was at risk in part because of GOP leaders’ plan to tack on language to green-light sales of year-round E15 gasoline blend. Rep. Lauren Boebert (R-Colo.) announced Tuesday she would vote against the rule after many of her amendments introduced in the Rules hearing were voted down. Rep. Nancy Mace (R-S.C.) also suggested in an X post she will vote against the rule Wednesday.

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Congress

House GOP poised to vote on pesticide language

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The House is poised to vote this week on whether to keep controversial pesticide language in the farm bill after a revolt from some Republicans and Make America Healthy Again activists.

House GOP leaders drafted a rule Tuesday to move forward with the farm bill and other key legislative priorities this week after overnight negotiations.

Rep. Anna Paulina Luna (R-Fla.) and other MAHA-aligned Republicans have threatened to withhold support for the bill unless the pesticide provision — which bars states from creating pesticide labeling laws that differ from EPA guidance — is stripped.

Luna said Monday she would “BLOW UP the farm bill” if the pesticide language wasn’t removed.

The draft rule, which was obtained by Blue Light News, would still need to clear the committee and be adopted by the House before Luna’s amendment could get a floor vote.

House Agriculture Chair G.T. Thompson (R-Pa.) defended the pesticide language Monday during a Rules Committee hearing, sparring with Democratic lawmakers who slammed the provision as a “liability shield.”

Farm state Republicans have worried the Luna amendment will pass if it’s allowed a floor vote, noting only one Democrat opposed a similar measure in the House Agriculture Committee.

The fight over pesticide manufacturer health risk liability has reached a fever pitch in Washington this week. The Rules Committee’s decision comes the day after the Supreme Court heard oral arguments in a case weighing whether Bayer, which acquired Monsanto in 2018, should be preempted from failure-to-warn claims for cancer risks associated with pesticide use.

Other amendments made in order to the draft rule include adding hot rotisserie chicken as eligible to be purchased using Supplemental Nutrition Assistance Program benefits, banning “painful” dog and cat testing, and repealing the transfer of the Food for Peace international aid program to the Agriculture Department while giving the president authority over the initiative.

The Rules Committee also made in order an amendment from Rep. Victoria Spartz (R-Ind.) to remove emissions mandates on farm equipment after she threatened to vote against the rule.

Meredith Lee Hill contributed to this report.

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