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Understanding the Tricks Republicans Could Use to Try to Make Trump’s Tax Cuts Permanent
In the past week, the Senate Parliamentarian was allowed to — and did — get rid of quite a number of noisome provisions in the big budget bill. But as we anticipate the bill’s movement toward the floor shortly, Republicans may not allow the Parliamentarian to get rid of one of the biggest, most procedurally invalid, and substantively worst provisions of the bill: the provision making the Trump tax cuts permanent.
Merely extending the cuts to 2030 — a move priced at $2.4 trillion — would be bad enough, especially given that Republicans hope to pay for it with steep cuts to Medicaid and food benefits. Yet the temporary extension of cuts is regular order in a budget reconciliation bill, as we’ve seen under presidents Reagan, Bush junior and Trump.
This time, however, Trump has made it clear that he not only wants his expiring tax cuts extended a decade to the 2030s, but he wants them made permanent. In other words, tax rates for the well-off will be lowered not just into the 2030s but for the foreseeable future.
A permanent extension puts us on a far more disastrous fiscal course. It means the national debt will soar. It makes the United States Treasury a perpetual sinking ship. Yet Thune and Senate Republicans want Trump to get his way.
Watch what is happening to this provision, which should not, but likely will, threaten to drench the bill in trillions of long-term red ink paid from the national debt to those in the top income brackets for many years to come.
What has the Parliamentarian determined so far?
Trump’s so-called “big beautiful” bill has unique procedural privilege. Ordinary Senate bills can be filibustered, so Senate Republicans can’t pass them without 60 votes for cloture, which would not be available for partisan measures. For example, Senate Republicans might want to take off the books what is left of the Voting Rights Act, but lack the needed 60 and cannot even try. But the Budget Act of 1974, as amended, has green-lighted reconciliation bills in the interests of getting past stalemate with a relatively narrowly defined group of tax and spending measures. So this “reconciliation” bill needs only a simple majority, 51 votes, to pass.
The catch is that the 50 vote privilege only applies to provisions which stay within Budget Act rules applied by the neutral Senate Parliamentarian, Elizabeth MacDonough.
Not unexpectedly, Senate Republican committees assembling the pieces of the “beautiful” reconciliation bill tried to fold their favorite partisan measures into it — to slide them through with the rest of the bill so they could be passed by a simple majority vote. A notable example: the Senate Budget Committee tried to get through a provision eliminating the Consumer Financial Protection Board (CFPB), a Republican bête noire. Another provision was slipped in that would make it prohibitively expensive for people to sue the federal government for breaking laws.
But, as is always supposed to occur, the Senate Parliamentarian reviewed the big bill for violations of, principally, the “Byrd Rule,” named for historic Sen. Robert P. Byrd, which is supposed to ensure that all elements of a reconciliation package directly impact federal spending or revenues. As part of the quaintly named“Byrd-bath” review, MacDonough nixed both the CFPB-killing provision and the provision related to emergency court orders.
This was obviously not to the liking of the Senate Banking Republicans and their Chair, Rick Scott (R-FL). But Senate Majority Leader John Thune (R-SD.) did nothing to interfere with the Byrd Bath, and Scott took his licks. Thune made clear since taking over as Senate Majority Leader at the start of this Congress that, by and large, he would follow what is known in the Senate as “regular order.” His position was that he would not just crudely do rule-breaking, Parliamentarian-flouting favors.
There is good reason to believe that if Senate Republicans let the Parliamentarian rule on their permanent tax cut, it would go down under the Byrd Rule. The rule forbids provisions that produce red ink beyond the budget’s period. The Byrd Rule was adopted on a bipartisan basis in 1985 in a Senate reaction against the chaos of the Reagan budget bills, which were stuffed with all kinds of miscellaneous items . This permanent tax cut is simply not the kind of provision that is appropriate for a reconciliation bill intended as a near-term fiscal package. The reconciliation bill is supposed to deal with matters that cost money — tax cuts or spending — during, and only during, the 10-year budget window. The budget window is inviolate. After 10 years, more tax cuts, like Cinderella’s carriage after midnight, turn into pumpkins.
Look at some of the other provisions the Parliamentarian ruled against in the past week. MacDonough opposed requiring states to pay more for Supplemental Nutrition Assistance Program (SNAP, better known as food stamps), a barrier to immigrants getting SNAP, rebuilding a Texas coast guard station, a transfer of the space shuttle from the Smithsonian to Texas, an extension of farm price support authority, penalties for new civil servants if they don’t agree to become at-will employees, and a section to allow reorganizing or eliminating whole agencies without congressional oversight. She is keeping the bill relatively clean. But it does raise the question: if the Senate Majority Leader is letting her lower the boom on so many favorites of his committee chairs, how will he suppress the Parliamentarian as to the permanent tax cut provision? Because you know he wants to. The Republican Party defines itself as the party of cutting taxes for the rich far more than it cares about all the other provisions kicked off the bill, put together.
Republicans may try these maneuvers to skirt the rules
Likely, there are two aspects that will enable Senate Republicans to protect the provision from the Parliamentarian. First, Senate Republicans rigged the budget resolution with a novelty: it sets the baseline — the line from which the costs of things like tax cuts are measured — as a “current policy baseline.” Trump’s temporary tax cuts are currently in effect, so extending them is deemed “free” because it just extends current policy.
Sen. Jeff Merkley (D-OR), the ranking Democrat on the Senate Budget Committee, said that “‘Current policy baseline’ is a budget gimmick that is nothing more than smoke and mirrors instead of honest accounting. This bill will add trillions upon trillions of dollars to the national debt to fund tax breaks for billionaires — while Republicans want everyone to think it adds zero.” But the current policy baseline is being implemented by the Joint Committee on Taxation, which scores tax bill costs. So the score is a ridiculously undercounted $441.5 billion added to the deficit over the next decade, instead of the true $4 trillion — ten times as much — counted honestly under the regular “current law baseline.”
It is to be expected that Senate Democrats will protest fiercely on the Senate floor when the permanent provision is pushed. They will demand a ruling of the Chair — which means a pronouncement of the Parliamentarian. If they do not get what they ask, they will proclaim that this is a use of the “nuclear option” with lasting undermining of the filibuster rule. That means we should no longer regard the filibuster rule as inviolate when, someday, Democrats are in the majority and Republicans beg for their 60 vote requirements.
Although it is conceivable the Parliamentarian would sanction the Republicans’ permanent tax cut via the “current policy baseline” nonsense, the Senate Republicans likely have a second aspect in mind to prevent the Parliamentarian from ruling at all, and, at the same time, to blunt the protests of the Senate Democrats.
Thune can resort to the obscure practice of having the Senate Chair say that a certain procedural question is a “new one” and therefore will be put to the Senate for a vote, rather than being something the Chair itself (speaking for the Parliamentarian) will pronounce. The beauty of this practice is that such a “new one” needs only 50 votes, and generally gets 50 majority votes. Of course, if the doctrine were overused and the Senate Parliamentarian often sidelined, and were used for questions for which the precedents are quite clear, it would be an abuse. But Thune tries not to fit the profile of an abusive majority leader. He did not try to salvage in this way any of the other provisions the Parliamentarian knocked off via the Byrd Bath. That gave him cover to now say, as a fresh pronouncement for a special occasion, that the permanent tax cut is something new.
This is where the “current policy baseline” may come in. Republicans are true believers in it; they find it rooted in Budget Act language about baselines; they got it passed by the Senate and House in this year’s budget resolution; they put it in the scoring by the Joint Committee on Taxation, which operates under the Budget Act. Senate Republicans would say that unlike the attempted cute drafting of all those provisions that went down in Parliamentarian rulings, this matter is soaked in budget act legitimacy. But for Thune’s purposes, it does not matter whether all those budget trimmings are so convincing they would sway MacDonough. He only needs that there are enough such aspects to let him take the stance that this is a new question, that can go to the senators for a majority vote expected to follow party lines.
As daunting as this all may seem for Senate Democrats, this is a vote they could win if they could peel off four Republicans. It’s not impossible. It would take Senator Lisa Murkowski (R-AK), Susan Collins (R-ME), Rand Paul (R-TX.) and one other. After all, the bill will already extend the tax cuts for a decade, at enormous cost. Senators would just have to stand against trillions more in debt down the road.
