President Donald Trump dealt Senate Republicans a blow Wednesday in the seemingly never-ending struggle over how to move his agenda on Capitol Hill. Trump sided with the House GOP’s reconciliation roadmap right as the Senate began floor consideration of its own plan.
However Congress decides to package top GOP priorities — one bill, two bills — Senate Republicans are gearing up for an arguably more consequential fight on the substance of the legislation.
Senate GOP leaders have drawn a red line on the need to make the expiring 2017 Trump tax cuts permanent. That’s not feasible under the House’s budget resolution, which would give the tax committees $4.5 trillion of room for tax cuts.
It doesn’t include a “current policy baseline,” which Republicans view as the only realistic way to make the Trump tax cuts permanent. This scoring method would consider extensions of existing tax policy cost-free and get around Senate reconciliation rules that otherwise end up requiring big offsets down the line.
So can Senate Republicans secure that victory?
Their big challenge is that with a razor-thin House margin, Republicans and the Trump administration have to consider what can get through the House — or risk getting nothing.
The Senate view: Senate Budget Committee Chair Lindsey Graham (R-S.C.) addressed concerns about the House budget resolution’s tax instructions Wednesday.
“The bill they proposed doesn’t meet President Trump’s tax agenda, making the tax cuts permanent. And that would be a problem here,” Graham said.
Here’s what is working in the Senate GOP’s favor.
1) Senate Finance Committee Chair Mike Crapo (R-Idaho) debuted his big push for the current policy baseline very early — back in November. If Senate Republicans can secure the baseline, that’s a major win for Crapo.
2) The Trump administration also wants to make the 2017 tax law permanent.
3) The House is open to Crapo’s gambit but wants more certainty that the current policy baseline would pass muster with the Senate parliamentarian and be workable, given that it’s never been used in reconciliation before, according to sources familiar with the discussions.
Here’s baseline news: Sen. Elizabeth Warren (Mass.), the Banking Committee’s top Democrat, is launching a new inquiry into Republicans’ effort to use the current policy baseline with Sens. Catherine Cortez Masto (D-Nev.), Michael Bennet (D-Colo.), Mark Warner (D-Va.) and Peter Welch (D-Vt.).
In a letter to the nonpartisan Joint Committee on Taxation, the senators seek answers from the office about whether there is any precedent for using a current policy baseline. The Democrats also pose a series of questions aimed at how unusual the GOP’s baseline maneuvering would be and argue it amounts to “magic math” and a “sleight-of-hand.”
They ask whether extending policies popular with Democrats would be deficit neutral under a current policy baseline too.
Also, in House news: Ways and Means held a meeting for GOP committee members’ chiefs of staff and warned about what a $4.5 trillion cap in reconciliation means for the tax bill.
The message was that under the reconciliation instruction, tax writers will have to dig further into revenue raisers, repeal more clean energy tax credits than some members may like, or cut down how long the bill extends the Trump tax cuts in order to make that number work, according to multiple sources at the meeting. There are tough trade-offs ahead.
