Editor’s note: This op-ed is by John Fairbanks, a Vermonter currently living and working in Washington, D.C.
UPDATE: This commentary has been edited to reflect a vote in the Senate Budget Committee on Tuesday.
[W]e are passengers on a speeding train headed over a fiscal cliff.
The majority in Congress is racing furiously to finish its tax bill. The House passed its version on Nov. 16. The Senate is expected to begin debate this week and pass it on a party-line vote soon after. The bill will then go to conference committee to iron out differences between the two versions. If all goes as planned, the bill will be, ironically, signed into law just before Christmas.
I say “ironically,” because, to my recollection, few pieces of legislation could be further from the spirit of this holiday.
Thousands of words of analysis are available to explain the bill’s particulars, from the massive corporate tax cut to the tax increases — that’s right; your taxes will go up — on average Americans that are coming in a few years to the special deal for private jet owners and even to the provision that would knock down the wall between church and state and the anti-choice language. So, probably no need to go back through all that.
It should also be clear that states and localities face fiscal calamities of their own down the road as a result of this bill.
It likewise should be common knowledge that the budget resolution that made this bill possible is assuming approximately $1.5 trillion in cuts to Medicare and Medicaid in the future to make room for the added burden of the debt. Beyond that, this bill lays the foundation for future cuts, deep ones, in social programs.
And it’s clear that millions are about to lose health insurance coverage — heck, 9 million children will lose it sooner, as the Children’s Health Insurance Program runs out of money in January — because the Obamacare individual mandate will be effectively eliminated by this bill.
Finally, it should be painfully clear the grandiose promises of economic growth, higher wages and tax cuts paying for themselves are nothing more than snake oil. Investment Higher wages? Corporate CEOs interviewed about this say, “Uhhhh, no.” If you want a micro-look at the more likely result, spend some time in Kansas.
One thing that might not be clear is that the way the bill is written, the corporate tax cuts are permanent, while the individual tax cuts — at least those for average Americans — will expire in about eight years. The bill’s supporters are probably counting on a future Congress to extend them.
But the bill is also set up so that a future Congress won’t be able to use the end-around, known as reconciliation, which is at work here, so attempts down the road to repair the damage will require 60 votes in the Senate.
The bill’s supporters have publicly acknowledged they’re pushing this through because they are under pressure from very wealthy donors to pass a tax cut. So they have slapped together a piece of legislation that washes away any patina of fiscal responsibility without so much as a single hearing, no public testimony from expert witnesses, nada. By comparison, the 1986 tax bill took two years of bipartisan work to get passed.
There are still some political and procedural hurdles to be overcome. In both cases, I think the majority will figure out a way.
The political hurdles are getting everyone on board. It already appears the former deficit hawks are about to turn into chickens. Majority Leader Mitch McConnell can lose two votes and still get the bill passed, since there’d be a 50-50 tie, and Vice President Mike Pence would come in and break that. But McConnell can’t lose three votes. Sen. Ron Johnson of Wisconsin had announced he’d vote “no,” and Sen. Bob Corker of Tennessee had suggested he might, as well. However, both senators voted “aye” to move the bill out of the Senate Budget Committee. The focus is now on a small group of Republican senators, including Susan Collins of Maine, James Lankford of Oklahoma, Steve Daines of Montana, and John McCain and Jeff Flake of Arizona. For my money, they will all stay in the fold.
I mentioned reconciliation earlier. That’s how this bill gets passed in the Senate with only a simple majority; under normal rules, you’d need 60 votes to overcome a filibuster, which is what would happen if this bill came to the floor under the usual procedures. To use reconciliation, the bill’s sponsors have to adhere to what’s called the Byrd rule, after the late Sen. Robert Byrd. The Byrd rule has several requirements, but the two to focus on here are (a) the bill cannot reduce revenue (meaning, add to the debt) by more than $1.5 trillion over 10 years (that’s the number in the budget resolution), and (b) it cannot reduce revenue after 10 years. That second one’s a sticking point, since it’s estimated the Senate bill would result in a net revenue reduction of $85 billion between 2028 and 2034.
Of course, the majority could always figure out a way to maneuver around the existing rules; ask Justice Neil Gorsuch.
So, if you’ve ever wished for a train for Christmas, here it comes. As it barrels down the track, it will kick the debt skyward, take health care coverage away from millions and drive up premiums for the rest of us, raise taxes on the middle class and working people, and put college — and the opportunities that go with getting a degree — further out-of-reach for average Americans. Casey Jones could tell you how this will end.
