CQ TODAY ONLINE NEWS – TAXES
Nov. 1, 2012 – 2:37 p.m.
GOP Operatives Eye Special Tactics to Pass Tax Overhaul Under a Romney Victory
By Sam Goldfarb, CQ Staff
Mitt Romney hasn’t filled in the details of his proposal for what taxes would look like if the he wins the presidential election, but conservatives in Washington already are formulating ambitious plans for how to get an overhaul of the tax code through Congress.
Despite the Republican nominee’s promise that he intends to work Democrats on a tax package, sources say senior GOP strategists have been discussing ways to enact major tax changes next year with little or no Democratic support if Republicans manage to take control of the White House and win a majority in the Senate.
Although Senate rules make it difficult to pass legislation with fewer than 60 votes, both parties have occasionally sought routes around that obstacle. Republicans, if they do better than projected in next week’s elections, would be keeping a recent tradition by exploring every option for making good on their policy promises.
Current and former congressional aides say that at least some Republican leaders are interested in using the legislative maneuver known as reconciliation to enact a rewrite of the tax system that would lower tax rates and pull back tax benefits for individuals and businesses. But some Republicans are wary of the strategy, fearing that it may open a Pandora’s Box of unwelcome political and policy outcomes.
Republicans have been looking for several months at how reconciliation could be applied to “tax policy issues as well as the mandatory spending side of the equation,” said one former GOP aide familiar with the discussions.
Passing a tax overhaul through reconciliation is possible but far from ideal, Rep.
A Republican Congress used reconciliation to pass President George W. Bush’s sweeping tax cuts in 2001 and 2003 (PL 107-16, PL 108-27) and Democrats used it to pass President Obama’s signature health care overhaul in 2010 (PL 110-148, PL 110-152).
The procedural tactic allows the Senate to pass legislation that changes revenue or spending levels with minimal debate and no threat of a filibuster. Certain restrictions apply however, among them that reconciliation bills are not supposed to add to the deficit beyond the years covered by a joint budget resolution.
As a result of the Byrd rule — named for Robert C. Byrd, the late West Virginia senator who originally proposed the restriction — the Bush tax cuts were written to sunset at the end of 2010, helping to create a temporary tax code that continues to frustrate lawmakers.
Given the headaches created in the wake of the last tax reconciliation measure, there has been little suggestion publicly that Republicans might repeat their efforts of the past decade.
But GOP strategists behind the scenes are not ruling out any scenario. Those who have studied the budget process closely have said it could be possible to overcome the Byrd rule and pass permanent legislation that adds to the deficit relative to the Congressional Budget Office baseline.
Procedural Challenges
That the Byrd rule was codified in law in 1990 makes it particularly difficult to get around the hurdle, but Republicans who say it can be done point to apparent contradictions in the law, as well as the broad principle that 51 senators can simply vote to pass legislation if there is sufficient will.
GOP Operatives Eye Special Tactics to Pass Tax Overhaul Under a Romney Victory
“One should not assume that the parliamentary terrain cannot be changed because we did it dramatically and changed the entire way the Senate approaches legislation 31 years ago,” said Steve Bell, a former Republican staff director of the Senate Budget Committee who helped craft the first major reconciliation bill in 1981 and is now a senior economic adviser at the Bipartisan Policy Center.
According to some experts, Republicans would have a legal basis to turn off the Byrd rule in a joint budget resolution based on the “elastic clause” of the Budget Act of 1974, which gives lawmakers leeway to establish new procedures in a budget resolution. Should the Senate parliamentarian object, Republicans conceivably could proceed anyway because the parliamentarian technically serves only in an advisory role.
Although Republicans previously have worked within the constraints of the Byrd rule, their appetite for pushing the limits of majority rule appears to have grown since Democrats managed to reshape the health care system without a single Republican vote.
Still, not everyone is interested in escalating the procedural arms race. Concern about using reconciliation to pass a tax overhaul appears to be particularly strong among Republicans who sit on congressional tax-writing panels.
These lawmakers fear that Republicans could commit to reconciliation and end up passing another temporary bill that does nothing to alleviate the uncertainty created by the present system. Another concern is that a measure advanced only by Republicans would be less popular and perhaps even less substantive than one that wins significant support from Democrats.
Among Republicans on the House Ways and Means Committee and Democrats on the Senate Finance Committee, “there has been a lot of interest in creating clear lines of communication, mutual understanding of each chamber’s priorities and an appreciation of the general outline of what could look like the best way to proceed,” said Eric Ueland, a former Senate Republican leadership aide who now works as a lobbyist.
“And not all of that can be easily reflected in a reconciliation process, which drives you to starker decision making,” he said.