There’s probably a chapter by Sun Tzu that addresses the dangers of dealing with an adversary that is so transparently stupid that their actions are impossible to predict. I may need to go hunt that down, because I’m getting dizzy trying to figure out the Republicans’ plans for tax reform. Before I get started here, I have to warn you that this will be complicated and you will be expected to have done some of the required reading from earlier in the semester. In particular, the two lectures on the uses of reconciliation will be referenced.
Those two pieces explain the Republicans’ original legislative roadmap, which I’ve called “The Dual-Reconciliation Plan.” In short, the GOP could not agree among themselves to a budget last year so they took advantage of that failure to set themselves up to pass two budgets this year. Back in March, the first time Obamacare repeal failed, I called it the “tricky tactic” that “destroyed Trump’s agenda.” Two weeks ago, I called it the explanation for why “Trump and the GOP Congress failed in just six months.” The plan called for using the first budget to pass their health care bill and the second budget to pass their tax reform. By splitting things this way, they hoped to accomplish several things at once.
By using last year’s hollowed out and unused budget bill, they could pass reconciliation instructions without having first worked out what would actually be in this year’s budget bill. This had the advantage of giving them speed. They could get started on Obamacare repeal almost immediately. By lowering or eliminating Obamacare’s taxes and thus the revenues in last year’s budget, they could thereby reduce the baseline against which this year’s budget would be measured. This would allow them to make larger tax cuts in the tax reform bill without it running afoul of Senate rules that prevent them from using reconciliation to increase the deficit. Finally, they could pass both reconciliation bills with 51 votes rather than the 60 they would need if they attempted to pass them in “regular order.”
As I’ve explained before, going the reconciliation route created a variety of constraints on what the Republicans could do. For example, it largely precluded them from addressing things that don’t have a pretty direct impact on taxes and revenues, leaving Obamacare’s regulatory structure mostly untouched. Since their plan for tax reform depended on a lower revenue baseline, they needed the first reconciliation bill to pass in order for the math to work on the second one. And, finally, they needed to treat the two bills as happening in two different fiscal years and as addressing two completely different budgets, and that meant that the health care bill, if not passed, would simply cease to exist the moment the Republicans passed a new budget. There was no flexibility in the order in which the two bills needed to pass. Health care had to come before tax reform.
If you want more clarity or detail on these admittedly confusing and hard to explain concepts, please follow the old links.
When the health care reconciliation bill failed in the Senate, Majority Leader Mitch McConnell placed it back on the calendar, which means that he can bring it back up at any time. The constraint on that is that he can’t bring it up again after the Republicans have passed a new budget with new reconciliation instructions. At times, it seems like no one understands this. And I can’t quite decide if the White House gets it or not.
Trump’s seemingly incoherent ravings that the Senate should not move onto other bills and issues until they have addressed health care don’t seem so insane if you realize that passing a new budget will destroy the old one. But there’s another possibility, which is that the administration actually understands this situation better than Congress does.
Let me try to explain.
If you read articles sourced to House Republicans that are only a week or two old, you’ll see that they envision tax reform as working through the reconciliation process that will only require them to get 51 votes when their bill goes to the Senate. That was the original plan, after all, and getting the votes of eight Democratic senators to overcome a filibuster would require compromises that the House GOP does not want to make.
Here’s a sampling of how the House Republicans have been explaining their position:
The House GOP budget includes reconciliation instructions for a deficit-neutral tax overhaul, as well as $203 billion in cuts to mandatory spending. If the House and Senate both pass and reconcile their budgets with a set of reconciliation instructions, they can use the resulting process to fast-track a tax overhaul without the threat of a filibuster in the Senate and rely solely on GOP votes.
“The budget is the gateway to tax reform,” House Budget Committee member Todd Rokita of Indiana said.
Rep. Jim Jordan, R-Ohio, is less optimistic. “You can’t get tax reform if you don’t have reconciliation instructions. You can’t get reconciliation instructions if you don’t pass a budget,” Jordan said at a recent forum at the conservative Heritage Foundation.
But the administration is throwing them a major curveball:
White House legislative director Marc Short said Monday the White House is not wed to using the often partisan reconciliation process to advance a tax overhaul, though senators were hesitant to rule out that procedural tool.
“We’ve learned how difficult it is to thread the needle with 52 [Republican] senators,” Short said at an event hosted by the conservative Americans for Prosperity at the Newseum in Washington, D.C…
…Short’s description of the tax bill moving through committees in early September suggests it would not include reconciliation instructions. The reconciliation process would allow the Senate to pass a tax bill with only a simple majority, instead of the 60-vote threshold that would require the support of eight Democrats under regular order.
“We’re not necessarily locked into that direction,” Short said of using the reconciliation process to avoid the Senate filibuster.
Treasury Secretary Steve Mnunchin is parroting the same line. It appears that the White House does not believe that they can successfully pass tax reform without Democratic votes and they’re saying that they don’t want Congress to even try. If they don’t use the budget reconciliation process for tax reform, then they don’t actually have to pass a budget for this year at all. Remember, they never passed one last year. And as long as they don’t pass a new budget, the old one containing the health care repeal will still exist and can remain on the calendar. Perhaps later this year, Sen. Bob Menendez will be convicted and forced to resign his seat, and New Jersey Gov. Chris Christie can appoint a replacement who will give the Republicans the extra vote they need to pass their “skinny” repeal.
On the other hand, if their tax reform is going to require eight Democratic votes in the Senate, it’s not going to look anything like what the congressional Republicans were hoping to see.
Republicans’ partisan push to overhaul the health care system failed in the Senate, but House GOP lawmakers say they plan to stick to that approach in rewriting the tax code…
…Rep. James B. Renacci, a member of the Ways and Means and Budget committees, said it would be nice for Republicans and Democrats to come together to rewrite the tax code but that reconciliation remains the more pragmatic approach because it allows for a 51-vote threshold in the Senate.
“Otherwise, you’re going to be held hostage to 7 or 8 votes out of 535, which isn’t fair either,” the Ohio Republican said. Eight is the minimum number of Democrats that would be needed to pass a tax bill in the Senate if it didn’t move through reconciliation.
Another factor impacting the White House’s decision-making is that the House Republicans are way behind on passing a budget and seem to be at an impasse. The Senate hasn’t really even begun their work. If they want to get the tax reform ball moving, using regular order may be their best option.
This would be a wise decision on the administration’s part because it’s not likely they’d succeed in doing a tax reform with no Democratic input or support. And doing things this way would preserve their option to return to the “skinny” bill later if the votes materialize.
But I can’t be certain that Trump understands any of this. Does he realize that his tax reform is going to need the support of people like Sens. Jon Tester and Claire McCaskill? Does he understand that he can’t get those votes unless he gives them co-authoriship of the bill? Is he ready to explain this to his caucus, his base, and the Koch Brothers?
A tax reform bill does not have to be bad legislation. But all the Republicans’ hopes are pinned on creating a very bad bill, and certainly a much worse one than will be endorsed by eight Democratic senators.
I don’t know how to game this out. Will Mnuchin and Short be undercut by the president when he realizes what they’re advocating is a kind of unilateral surrender? Or is he more cunning than he looks and the one that gave them their marching orders?
I’m going to go to the library and check out The Art of War. Maybe I’ll find my answers in there.
I am assuming the question about “cunning” is rhetorical, and you don’t really think that is a possibility, right? We’re talking about the guy who thinks the health care vote failed because they didn’t have a 51 vote threshold available to them in order to pass it.
while I agree, I want to make sure you understand that Trump’s complaint about the filibuster is not necessarily as dumb as it sounds.
All those things the parliamentarian ruled out of order would be permissible under regular order, and without a filibuster this could be done under regular order.
The failure to pass a bill was impacted by the constraints put on the Republicans which badly limited their ability to wheel and deal.
So, Trump isn’t necessarily wrong that the bill would have passed without a filibuster blocking them.
Oh, I agree 100% that it is not a dumb argument he is making. I’m just not certain he is making it because it is somehow a part of his strategy. It just confirms that for all the pumping of McConnell’s and Ryan’s tactical Congressional bonafides, that they let their hubris get the best of them, and made the possibly fatal mistake of believing their own bullshit. And Trump, in the first example of his ignorance and apathy about policy, simply didn’t bother to even inquire if this was what stood the best chance for success.
I was told there wold be no math.
“would” dag nab it.
My son, who was a varsity fencer in college, said that if you went up against an inexperienced fencer in competition sometimes they could score an early touch or two because they were unpredictable. But once you realized that they didn’t understand the moves, you could get really aggressive because you stopped having to worry about serious defense, and then you could clean up.
if you have a tablet, download Art of War free here.
There’s also a link there to read online, though the format isn’t pretty.
I don’t see any obvious advice to Democrats about dealing with Trump. What I see are lots of observations about things successful leaders do to be successful, and anyone can see that in all cases Trump is doing the opposite.
examples from chapter X “Terrain”
And this is just picking 3 items that clearly apply.
Your posts on this stuff are indispensable. Seriously – you should write a book about this.
I used to like writing about this stuff, but now I hate it. Now it’s just a job.
Sun Tzu probably had an appropriate quote for sure. The only one I know similar is attributed to Napoleon Bonaparte who is said to have remarked: “Never interfere with an enemy while he’s in the process of destroying himself.”
Sun Tzu;
“Is sure to be captured by them”.
Hmmm.
Hear that Robby Mook? And just about every Democratic Pundit over the last 2 years?
“Perhaps later this year, Sen. Bob Menendez will be convicted and forced to resign his seat, and New Jersey Gov. Chris Christie can appoint a replacement who will give the Republicans the extra vote they need to pass their “skinny” repeal.”
I’d forgotten about that. The only good news is that seat is up in 2018, when it would be a target.
I was also thinking, what if Menendez resigns, or if McCain dies? There is the extra vote they need.
However, let’s say they pick up this seat next summer, say late August. Would the same yes votes still be there? Dean Heller voting for the skinny bill now, over a year out from the mid terms is very different than being asked to vote on it, for a second time, just months from his actual re-election. I don’t know if he would do it again.
The other problem is, couldn’t the Repubs, if they pick up the extra seat, just vote for it in the lame duck session after the mid terms. They would have the votes (if McCain dies or Menendez resigns) and have no election to worry about.
The only scenario I can see where the skinny bill doesn’t eventually get done is if McCain lives until January of 2019, Menedez doesn’t need to resign, and, at the least the Dems pick up a lot of seats in the house, since even if the Dems don’t control the House, with 20 plus more votes, I don’t see the Repubs passing a new health care bill out of the House, which is what they would have to do in the next congress.
The problem with a bipartisan tax reform bill is that working with Republicans is now poison for Democrats. Any who try will be primaried. The only kind of bill one might get away with supporting is so leftward it would get no Republican votes. Basically, it would have to redistribute wealth downward, which will not get Republican support. The majority of Democrats are not going to believe that any tax bill a majority of Republicans would vote for is going to be better than the status quo, and I think they’re right. This applies to a lot of areas now, both because Trump has no legitimacy is the eyes of the Left and much of the center and because of the general polarization of the last several years. If tax reform can’t be done with 50 votes, it can’t be done.