Editorial: Republican budget gimmicks: Just say no
Published in Op Eds
Even before taking office, the Republican Party’s new majority has become deeply split over the legislative path ahead. Some lawmakers want to prioritize defense, energy and immigration; others want to focus on taxes first; still others want everything, all at once, preferably while humiliating their opponents. A more modest agenda would better suit their goals.
Soon-to-be Senate Majority Leader John Thune envisions at least two major bills, starting with defense-energy-immigration, then moving on to extending the expiring elements of the Tax Cuts and Jobs Act. He plans to pass both using a process called reconciliation, which (to simplify a bit) allows budget-related bills, under certain conditions, to pass the Senate with only a simple majority. Therein lies the trouble.
Reconciliation, established by the Congressional Budget Act of 1974, was intended to discourage deficit spending by expediting measures focused on fiscal control. In recent years, though, both parties have wielded the process to pass highly consequential — and often budget-busting — legislation while eluding the 60-vote threshold normally imposed by the Senate’s filibuster. Among other partisan splurges, reconciliation eased the passage of the Tax Cuts and Jobs Act in 2017, the American Rescue Plan in 2021 and the Inflation Reduction Act in 2022.
Although politically convenient, the procedure exacts a price. Senate rules prohibit enacting policy changes through reconciliation unless they directly involve revenue or spending. They also bar deficit increases outside a stated budget window (usually 10 years). These restrictions sound like common sense, but in practice they’ve led to disfiguring evasions and sleights of hand.
Anything Republicans want to accomplish, aside from spending money, will be harder under this procedure. On immigration, for instance, they may get more cash for wall-building, but they will likely fail to secure policy changes — such as tougher asylum standards — that would curtail the perverse incentives of the current system. Likewise, energy funding could go much further if paired with reforms to federal permitting rules. As for taxes, negotiators will be tempted again to resort to budget gimmickry that technically satisfies the rules but that in fact yields higher deficits — and less growth — down the road.
As an example, some Republicans want to toy with the “scoring” of the tax bill in ways that could do lasting damage. Fully extending the act’s provisions without offsets might cost $5 trillion, an embarrassment to those who purport to care about fiscal discipline. One solution, mooted by a Republican on the finance committee, would be to simply change the baselines used to calculate these costs — from “current law,” as in the original bill, to “current policy” in the extension — thereby meeting the formal reconciliation requirements while actually ballooning future deficits. Watch as the red ink magically disappears.
Such artifice is hardly novel in Washington. But it’s worth emphasizing that, on every one of these issues, a bipartisan bargain is already there for the taking. Deals on immigration and permitting reform nearly passed last year. Both parties have an interest in tax reform. Most of the major bills in recent years — the Chips Act, gun control, a postal-service overhaul, the $1.2 trillion infrastructure bill — were bipartisan deals enacted through the normal process, making for stronger and more durable legislation.
Republicans aren’t being forced to use reconciliation because of Democratic intransigence; they just want to avoid the concessions, compromises and hard choices that normal politics demands — and to free themselves from budget constraints while doing so. They doubtless see it as boldness. It’s just bad government.
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