President Trump said he wants to pick up the pace on “dramatic tax cuts and tax reform” in the wake of the storms that have battered to the U.S. in recent weeks. “I think now with what’s happened with the hurricane, I’m going to ask for a speedup. I wanted a speedup anyway, but now we need it even more so,” he declared at a cabinet meeting on Saturday.
But there are a few serious hurdles standing in the way of passing tax reform right now, whatever the pace. The biggest obstacle may be time: The House and Senate are scheduled to be in joint session for less than 50 days for the rest of the year. Here are five of the major problems facing Congress in the near term that will make it hard to satisfy Trump’s call for a speedy execution of tax reform this year:
1. A tax reform plan requires a 2018 budget resolution. Back in July, House Ways and Means Chairman Kevin Brady said, “Clearly, no budget, no tax reform.” Republicans have still not passed a budget for fiscal year 2018, and they need that budget in order to pass tax reform through the reconciliation process. (Reconciliation allows the Senate to pass a tax bill by 50 votes, but only if the bill doesn’t increase deficits after 10 years.) Without a budget baseline, there’s no way to evaluate the fiscal effects of changes in the tax code.
2. A 2018 budget requires a tax reform plan. Some House Republicans are complaining that they don’t have enough details about the GOP’s tax reform plan to properly shape a budget for 2018. Rep. Dave Brat of Virginia, one of the leaders of the conservative Freedom Caucus, recently said: “It’s very hard to hard to vote on a budget resolution, which has as its sole objective to move tax reform, when you don’t know what tax reform looks like. … There’s problems across the whole conference, from moderates to fiscal conservatives.” At this point, it’s not even clear where a detailed tax plan will come from — the tax-writing committees in Congress or the “Big Six” negotiators — or when.
3. Hurricane relief will take time — and money. Congress will almost certainly have to deal with the economic effects of Hurricanes Harvey and Irma, and possibly Hurricane Jose. Sen. Bill Nelson of Florida said Monday that the $15 billion in FEMA funding passed last week will last just a few weeks, and that more funds will needed soon.
4. Congress still has some must-pass items on its plate. Lawmakers must reauthorize the Federal Aviation Administration and the Children’s Health Insurance Program by the end of the month. Neither one of these is particularly controversial, but either or both could get bogged down if Congress attaches unrelated items to the reauthorization bills — possibly including Obamacare stabilization measures.
5. December 8 gets closer every day. Trump struck a deal with Democrats last week to fund the government and raise the debt ceiling, but only for three months.With hurricane relief out of the way and Congress eager to head home for the holidays, fiscal hawks may feel empowered to take a stand against deficit spending, sparking a new round of budget battles with potentially serious economic repercussions.
Some skeptics don’t expect to see any serious tax reform this year, due to the limits imposed by both the calendar and the turmoil roiling the Republican Party. The headline on Albert Hunt’s opinion piece at Bloomberg Monday expresses those doubts bluntly: “Don’t Expect Trump and Congress to Do Anything.”
But Judd Gregg, the Republican former governor and senator from New Hampshire, points to one big reason Congress may still find a way to overcome the many obstacles complicating tax reform:
“It is called political survival. The passage of a true, significant tax reform bill is the last, best hope for this Republican Congress and this unusual President to claim they should continue to be entrusted with our nation’s wellbeing. Political survival trumps (no pun intended) all other hurdles, procedural and substantive. A way will be found to get to tax reform. You can bet your re-election on it — if you are a Republican.”