If there’s one thing that Republicans can agree on, it’s tax cuts. On lower taxes, there are no regional disagreements, no ideological dissenters, no schismatics jockeying for control of the party. On taxes, Republicans all sing from the same hymnbook written by the sainted Reagan, in broad harmony.
Why, then, do their stumbling efforts on taxes look so eerily like the shambolic process of repealing and replacing Obamacare? Why does it seem so possible that the whole thing is going to end the same way: with Republicans slinking away in defeat from one of their core campaign promises?
On Tuesday, House Republicans announced that their tax bill, which had been expected Wednesday, would be delayed until later in the week. It did arrive on Thursday … with the caveat that it may be rewritten over the weekend.
(Related: A Recipe for a Spiraling Obamacare Exchange)
These sorts of last-minute announcements are not exactly unheard of during the messy legislative process. But the list of things Republicans dithered over seems remarkably long (read Josh Barro’s summary for a flavor). As of Wednesday, they still hadn’t agreed on what to do about the state and local tax deduction, what to do about 401(k) accounts, or how to keep wealthy individuals from abusing the new special low rate for pass-through entities. Which is to say, they are agreed on the tax cuts; what they can’t seem to do is agree on how to pay for them.
Why such difficulty? One story we can tell is structural: It’s harder to do tax cuts now than it was in 2001, or the 1980s. Reagan got his tax cut through by dint of the famous “magic asterisk” — savings to be named later. Bush was lucky enough to push his tax cuts at a time when we still had a budget surplus. Thus, both of them got to focus on the fun stuff — giving taxpayers back their money — while avoiding the hard questions: Who, exactly, are you going to spend less on to make up for the lost revenue?
Today’s Republicans do not have such luxury. The budget is not in surplus, in part because of the aforementioned Bush tax cuts, but mostly for other, structural reasons. And we all saw how the magic asterisk played out in the early ’80s, so they’ll find it hard to get away with that one again.
Meanwhile, bipartisanship has collapsed, so they have neither hope nor interest in making a deal with the Democrats, who are likely to filibuster any attempt to cut taxes. To avoid the filibuster, they’ll have to push their tax bill through a budget process called reconciliation, which further restricts their options — for example, the bill cannot increase the deficit beyond the 10-year forecast window.