We previously argued that if Senate Republicans “went nuclear” to break a logjam over confirmation of Neil Gorsuch’s appointment to the Supreme Court, they should abolish the legislative filibuster while they were at it. Time to bin the filibuster, 4/3/17. But when the anticipated showdown happened, the GOP opted to solve the immediate problem (by abolishing the filibuster for Supreme Court appointments) without changing the Senate rules for legislation.
Apparently cementing this outcome, 61 senators (29 Republicans & 32 Democrats) signed a letter supporting retention of the legislative filibuster. Filibuster-proof majority of senators want to save the filibuster, Daniel Chaitin, Washington Examiner, 4/7/17.
"We are writing to urge you to support our efforts to preserve existing rules, practices, and traditions as they pertain to the right of members to engage in extended debate on legislation before the United States Senate," said the letter, which was sent to Majority Leader Mitch McConnell and Senate Minority Leader Chuck Schumer. "Senators have expressed a variety of opinions about the appropriateness of limiting debate when we are considering judicial and executive branch nominations. Regardless of our past disagreements on that issue, we are united in our determination to preserve the ability of members to engage in extended debate when bills are on the Senate floor."
Many conservatives seem comfortable with this outcome, perhaps because they feel the filibuster helps to ensure their ideas will be taken seriously. Why preserving the legislative filibuster is critical for conservatives, Rachel Bovard, Heritage Foundation, 4/11/17.
The filibuster remains one of the most powerful tools conservative senators have to make their priorities known. It provides a critical amount of leverage to conservative ideas that might otherwise be ignored. To put it bluntly, the right to filibuster gives conservatives a place at the negotiating table, even when their own party would prefer they be elsewhere.
Some Republicans worry, however, that their disunity will lead to sinking public support. Why did their party work so hard to win control of both houses of Congress and the White House, after all, if this power won’t be used to deliver on their promises to voters? The Republican Congress must get its act together NOW, Roger Simon, pjmedia.com, 4/17/17.
[Republicans] have the House, they have the Senate, they have the presidency -- and nothing's happening. Nothing, that is, that Donald Trump doesn't do by himself (i.e., reversing Obama's executive orders and cutting regulations in general, reviving American global power, etc.). *** They can't get it together to compromise on anything and move forward -- no tax reform, no healthcare, no nothing. They are overwhelmed by a combination of overweening ego and rigid ideology -- a lethal cocktail.
It’s still early days for the new administration, but public confidence does seem to be ebbing and Republicans are anxious to “get some points on the board.” Polls find Trump losing steam on campaign promises, working with Congress, CNN, 4/18/17.
•Gallup: 45% of Americans say the president “keeps his promises” and 46% that he “can bring about the changes this country needs.”
•Pew Research. The partisan gap on Trump's approval ratings -- a 75-point chasm between the approval rating he earns among Democrats (7%) and among Republicans (82%) -- is larger than that of any other president at this stage in their presidency by nearly 20 points.
In contrast, Democrats seem solidly united in their opposition to Republican proposals and under little pressure to produce positive results. The budget battles to come, Michael Tanner, Cato Institute, 4/12/17.
. . . the next big legislative battles of the Trump presidency may be just a few weeks away. Republicans must pass a budget by April 28 to avoid a partial government shutdown. Yet, as was the case during the recent failed effort to repeal and replace Obamacare, Democrats are united in opposition while Republicans are badly split.
Availability of the legislative filibuster will put Republicans at a disadvantage by giving their opponents what amounts to veto power – it’s almost as though they were agreeing to fight with one arm tied behind their back. And while the filibuster may prevent bad ideas from coming to fruition in some cases, it may impede sorely needed policy changes in others (as shown by the following examples).
1. “Repeal and replace” GovCare – Republicans are united in their opposition to current healthcare policies, aside from certain features deemed too popular to tamper with (such as that healthcare insurance can’t be denied based on preexisting conditions), but far less clear as to what changes in the status quo should be made. As for Democratic support of major changes in the biggest legislative accomplishment of the Obama era, forget about it unless the effect of the changes would be to give the government even more control over the healthcare system than it already has.
Accordingly, it was clear from the start that whatever reform proposals Republicans came up couldn’t attract 60 votes in the Senate. And no one was thinking in terms of abolishing the filibuster, so the only chance for legislative success was a resort to the arcane budget reconciliation process that would make the healthcare bill filibuster-proof. The basis for using this process was established in January. An overhaul of GovCare begins, 1/16/17.
It was envisioned that the proposed legislation (American Health Care Act, or “AHCA”) would pass by a convincing margin in the House and then squeak through the narrowly-divided Senate (with unanimous Democratic opposition, three GOP defectors could kill the bill). Threading the needle between the ideas of conservative and moderate Republicans never figured to be easy, and matters were complicated by classifying some of the Republican reform ideas as not “budget-related” and holding them back for a second healthcare bill that would be subject to filibuster. GovCare replacement proposal falls short, 3/13/17.
Sorry, but it seems that the Senate rules are being used as an excuse to water down the initially proposed changes to GovCare, and could therefore have a big effect on the provisions that are ultimately enacted. [The objective, as we saw it, should be] to package all the currently contemplated GovCare changes into a single bill, which could be debated, amended and voted on by the two houses of Congress without the distraction of worrying about a filibuster.
The AHCA didn’t attract enough Republican support in the House, and the bill had to be tabled. Discussions of the interested parties have continued, however, with the objective of coming up with a revised bill that would attract more support from the House Freedom Caucus without alienating mainstream Republicans. A new concept that seems promising is to provide states with more flexibility to obtain waivers from the GovCare requirements, e.g., community rating (bars hiking healthcare insurance premiums for high cost patients), if they establish subsidized high risk pools for these individuals. New deal to repeal Obamacare emerges, Robert King, Washington Examiner, 4/20/17.
Assuming this or some other proposal eventually prevails in the House, its reception in the Senate remains uncertain – and the bifurcation of the reform proposals between “budget-related” provisions (to be included in bill one) and other provisions (to be included in bill two, which could be filibustered) won’t improve the prospects for a successful outcome.
Like it or not, this country may wind up with a “single payer” system, which will control healthcare costs by rationing (a point seldom mentioned by advocates of more government control). Is that what Americans want?
2. Spending bill – The continuing resolution enacted last December will expire on Friday. Unless Congress passes ongoing spending authority or a deadline extension in the meantime, the government will be obliged to “shut down.” Neither side wants a shutdown, lest they be blamed for it, but there may be quite a tussle over the terms for a reprieve. As the necessary legislation can be filibustered, the Senate minority’s influence will be augmented considerably versus that of Republican majorities in the House and Senate.
The administration has requested some $3 billion dollars to cover preliminary costs for a “wall” along the southern border. This is a pittance in the context of the government’s overall budget, and the president repeatedly promised that such a wall would be built before he was elected – to the obvious delight of his audiences. Video (2:25), 5/25/16.
One might think approval of the initial funding would be a given under the circumstances, but the House Republican leadership has indicated a disposition to leave the wall out of the spending bill – basically to avoid fight about the project. Build that wall, Mr. Speaker, Natalia, Castro, netrightdaily.com, 4/21/17.
In late March Ryan spoke about delaying the wall, noting on CBS News that “The big chunk of money for the wall really is next year’s – next fiscal year’s appropriations because they literally can’t start construction even this quickly.” *** But Ryan cannot pretend that in September [when spending authority for fiscal year 2018 will be under consideration], Democrats will not try the same thing. Backing down now would not bode well for getting the wall built.
The administration has identified wall funding as a high priority and indicated its readiness to compromise on other issues, e.g., the funding of payments to healthcare insurance companies for unfavorable coverage costs.
Democrats are still complaining about the wall request, however, and implying that a government shutdown may result if Republicans don’t drop it. [Budget Director Mick] Mulvaney: Democrats entitled to get some priorities funded in must-pass funding bill, Joseph Lawler, Washington Examiner, 4/20/17.
A spokesman for Senate Democratic leader Charles Schumer responded Thursday evening by blaming the administration for slowing down talks and for seeking funding for a wall along the Mexican border. "Everything had been moving smoothly until the administration moved in with a heavy hand," Schumer communications director Matt House said in a statement. "Not only are Democrats opposed to the wall, there is significant Republican opposition as well." At last report, this and several other spending issues remained in play – and no one is ruling out a government shutdown to resolve them. Congress faces immediate funding deadline next week, Susan Ferrechio, Washington Examiner, 4/22/17.
In a phone call with reporters during the recess, Senate Minority Leader Chuck Schumer, D-N.Y., who is a key negotiator, said "talks are going pretty well right now," but he warned the negotiations could fall apart if White House officials get involved and force the inclusion of Trump's requests. "The White House," Schumer warned, "doesn't have to throw a monkey wrench into it."
Reasonable minds often differ about priorities, and there will always be give and take in the budgeting process. Giving the minority an effective veto on spending bills, however, may do more to encourage “logrolling” than to discourage wasteful spending. 3. Tax reform – There was much talk about rebooting the economy before the election, which was to be achieved by rolling back regulations, renegotiating trade agreements, and overhauling the tax system. For present purposes, let’s focus on the third element in this equation, which is almost exclusively dependent on legislation passed by Congress.
There have been conflicting signals as to whether tax reform will be taken up before or after healthcare legislation, and at this point it almost seems as though the administration plans to pursue the two subjects simultaneously. Trump to make “big” tax reform announcement Wednesday, yahoo.com, 4/22/17.
It appears unlikely, however, that a comprehensive tax proposal will be unveiled any time soon – maybe some bullet points, but not a solid plan. Mulvaney: Trump’s full tax reform plan not likely before June, Sandy Fitzgerald, newsmax.com, 4/22/17.
What’s going on? The president’s first 100 days will end on April 29, the media will predictably sneer at his lack of legislative accomplishments during this period, and he is preparing to fire back. Lots got done – more great things on the way – one-hundred-days standard is “ridiculous” anyway. Weekly Trump report card [pollster John Zogby gave him a “D”]. Paul Bedard, Washington Examiner, 4/22/17.
OK, such political spinning is par for the course, but we would hope that the urge to get things done won’t override the need to do things that are worthwhile. Tax reform could be a good case in point, because there is a big opportunity in this area that could be blown very easily.
The tax plan developed by House Republicans was a bust in our opinion, notably because of the proposal to “border adjust” corporate income by subtracting export revenue and adding import costs. Proposed replacement for the corporate income tax, 2/13/17.
The chief selling point for border adjustment was that it would increase projected government tax revenues by about $1 trillion over the next decade (given the US trade deficit), a seemingly painless way to “pay for” envisioned tax rate cuts. A far better approach, in our opinion, would to ruthlessly eliminate scores of tax preferences (exemptions, deductions and credits) that have been built into the tax law for individuals and businesses.
The border adjustment idea does not seem to be catching on, and with good reason. Politically, it splits the usually supportive business community into two opposing camps. Economically, it is not needed – as some proponents have claimed – to level the playing field for US versus foreign firms. The border-adjustment sleight of hand, Veronique de Rugy & Daniel Mitchell, Wall Street Journal, 4/16i/17.
•When the German company sells to customers in the U.S., it is subject to the German corporate income tax. The competing American firm selling domestically pays the U.S. corporate income tax. Neither is hit with a VAT.
•What if an American company sells to a customer in Germany? The U.S. government imposes the corporate income tax and the German government imposes a VAT. But guess what? The German competitor selling domestically is hit by the German corporate income tax and the German VAT. That’s another level playing field.
Perhaps pressure to achieve quick results was a factor in attempting to sell the border adjustment gimmick. And there may well be proposals for other new sources of revenue, e.g., a carbon tax or taxes on the legalized sale of marijuana, which would offer a “feel good” way of offsetting reductions in existing taxes or funding new spending programs. The urge to raise taxes is alive and well, 6/22/15.
Many obstacles would have to be overcome to achieve real tax reforms, and it would take months if not years to get the job done. All too likely, therefore, that the undertaking will be cut short in one way or another, e.g., by lowering business taxes (and presenting the proposal as a tax cut versus revenue neutral tax reform) while deferring action on individual taxes. Why are Republicans making tax reform so hard? Steve Forbes et al., New York Times, 4/19/17.
The approach outlined in this column has several drawbacks. (1) It would pass up the opportunity to rethink the double taxation of much business income, first at the corporate and then the shareholder level. (2) It would exacerbate an already dire fiscal problem, at least in the short run (faster economic growth might boost tax revenues over time). (3) Senate Democrats could kill the resulting tax bill with a filibuster, and it seems to us that they would probably do so.
This is not the 1960s, when a Democratic president (JFK) advocated lower tax rates. Looking at the tax system through a liberal lens, the problem with the status quo is not perceived as sky high tax rates and tax preferences that distort economic activity – but rather a need to make the tax system more “progressive.”
So long as the filibuster is in effect, therefore, Republicans can’t realistically hope to push through a real tax reform plan. And a watered-down tax bill with added sweeteners for Democrats, such as infrastructure spending or a reduction in payroll tax rates (a trial balloon was recently floated), would probably compound current problems instead of alleviating them. 6 reasons to be skeptical of RINO tax “reform,” Daniel Horowitz, Conservative Review, 4/20/17.
The administration has already hinted that it intends to work to garner Democrat votes rather than push reforms to the existing practice of the filibuster in the Senate. Some prominent supply-siders are already advocating for a trade of tax cuts for more infrastructure spending. As we’ve noted before, transportation spending should be devolved to the states instead of purveying the wasteful federal transportation sinkhole. It’s not worth the trade.