clock menu more-arrow no yes mobile

Filed under:

Republicans are following the same strategy on taxes that doomed Obamacare repeal

Remember Schrödinger’s health bill? This is the tax version.

House Speaker Paul Ryan Holds Weekly Press Conference At U.S. Capitol Photo by Chip Somodevilla/Getty Images

Top House Republicans were planning to unveil their much-anticipated tax bill Wednesday. Then late Tuesday night, they postponed it to Thursday.

Whatever they release will be the first time the majority of the Republican Party will learn exactly what’s in the GOP tax plan — and, they say, it will not be final.

But as Wall Street Journal tax reporter Richard Rubin explained on Sunday, that is all part of the Republican strategy on tax reform:

The plan is to keep the tough trade-offs in the bill secret until after Halloween, then reach Thanksgiving with bills passed by the House and Senate and hit New Year's Day with a bill on President Donald Trump's desk. That's close to financial-crisis speed, pushing Congress into a kind of emergency lawmaking mode it typically uses only when inaction means cataclysm.

Through Tuesday night, the tax-focused House Ways and Means Committee and President Donald Trump were still litigating fundamental aspects of the tax bill — the exact nature of the corporate tax rate cut, and which tax deductions they will reduce or repeal to pay for the cuts.

"We don't have the details — that's why I'm frustrated," Rep. Chris Collins (R-NY) said last week.

Overhauling the nation’s tax code will have a lot of winners and losers, and as Obamacare repeal already showed, the Republican Party is still reckoning with deep divides within its ranks. But so far, it appears like top GOP leaders are following the same playbook as before: creating a sense of urgency to get something done by year’s end, even if the party disagrees on fundamental aspects of the policy, and hiding that something from their own members until absolutely necessary.

“The reality is some form of tax reform is going to pass — what it looks like, we don’t know,” Rep. Mark Sanford (R-SC) said. “Whether it’s ultimately a meaningful jolt to the economy and capital formation remains to be seen.”

One major problem: This is the same strategy that tanked the Obamacare repeal effort.

Remember Schrödinger’s health bill? This is the tax version.

So far the strategy has been to keep the Republican tax reform bill locked in a box, the contents of it unknown to everyone on the outside. But each Republican lawmaker has his or her own ideas of what could be inside it.

“I get a sense that different members believe that the pay-fors are going to be more in line with their thinking than perhaps reality will suggest,” Rep. Mark Meadows (R-NC) told Vox.

The goal is to keep the box moving without opening it — not until the very last minute — for fear that whatever is inside would be picked apart by various factions of the Republican Party, killing the tax reform effort altogether. GOP leaders plan to send the box quickly through the House, and to the Senate, all before the end of the year, motivating their ranks by the need to deliver Trump a major legislative win.

Republicans are trying to pass Schrödinger's tax bill, where GOP lawmakers have been just enough in the dark about what was in the actual bill that they keep the process moving. Paramount to this strategy is that no one can say with certainty what will be in this box at the end.

If any of this sounds familiar, it’s because I wrote this same story about the health care debate in July. It’s the same strategy that led to the demise of the Obamacare repeal attempts in the Senate over the summer; it’s the reason Sen. John McCain (R-AZ) cast his vote to kill the Obamacare repeal effort.

Even so, Republicans are determined to get this done by the end of the year — an arbitrary deadline they have set so the party doesn’t find itself entering the 2018 midterm election year without a single piece of major legislation to its name.

And there’s some early indication that this heightened pressure might get some Republicans in line — at least in the House. The usual conservative rebels known for bucking leadership, members of the House Freedom Caucus, seem more willing to loosen their group’s orthodoxy in the name of legislative victories.

“I think it would be intellectually dishonest to suggest that if we had had a bunch of wins on a whole bunch of items at this point, we perhaps would have been a little bit more deliberate in our negotiations,” Meadows, who chairs the Freedom Caucus, said.

But there’s still a long way to go.

This isn’t going to be easy

Ever since the GOP failed to repeal Obamacare, Congress’s first priority has been to push through a tax bill. But unlike with health care, Republicans can’t rely on punting the tough policy decisions down to the states, as they tried — and failed — to do with health care in August.

And as Vox’s Matt Yglesias explained, there is a lot of room for disagreement:

Any industry that wants to save any provision only needs to find three GOP senators — or two dozen House members — to kill it. This is presumably why Republican leaders keep not naming names as they go through different iterations of their plan. But unless they find some way to actually reach agreement on the crucial topic of which loopholes, exactly, are going away, there’s just no way for their tax plan to move ahead.

It’s true they’ve already encountered some pretty serious areas of disagreement.

By Tuesday night, it became clear top tax bill writers still hadn’t hashed out the fundamentals — delaying the rollout until Thursday.

The problem is that much of the tax reform debate has been conceptual. Republicans have avoided making any of the tough decisions. Earlier this month, they were floating a possible cap on 401(k) contributions, which Trump shot down over Twitter. On Monday afternoon, the White House poured cold water on another idea from the Ways and Means Committee, which was reportedly considering phasing in the 20 percent corporate tax rate — a mainstay of the Republicans’ tax proposal.

Over the weekend, Ways and Means Chair Rep. Kevin Brady (R-TX) said their bill would reinstate the itemized deduction for state and local property taxes to appease Republican lawmakers from high-tax states — an issue area that was threatening to kill tax reform altogether. Still, some lawmakers, like Rep. Leonard Lance (R-NJ), said he’s skeptical. “This is a step in the right direction but I will need to see legislative text to determine if this proposal is in the best interest of New Jersey," he told Politico.

Because of these challenges, Rep. Joe Barton (R-TX), who participated in the 1986 tax reform debates, said he’s “skeptical” tax reform can get done by the end of the year.

“I am one of the few people that was here in 1986 and we had the president of the United States strongly committed — Reagan — and the speaker of the House strongly committed, Tip O’Neill, and the Senate leadership strongly committed, and it barely passed and it took a year and a half, and it took several meltdowns,” Barton said.

How can something come together and get his vote this year?

“Well, you do a lot of praying,” Barton said.