I’ve been mulling over how to approach this topic for quite a while now. Since I’m no closer to clarity, I figured I’d just share my thoughts and let everyone else have a go…
Check out excerpts from this article from a month or so ago in the Wall Street Journal (gift link to the article HERE and at the end of the excerpts):
GOP Declares Tax-Cut Extensions ‘Free’ to Obscure Megabill’s Cost
Senate Republicans deploy unprecedented maneuver to continue 2017 tax cuts as budget experts and Democrats cry foul
WASHINGTON—Republicans waved a $3.8 trillion magic wand over their tax-and-spending megabill, declaring that their extensions of expiring tax cuts have no effect on the federal budget…
…To dodge the Senate filibuster rule, which typically requires 60 votes to advance legislation, Republicans are using the fast-track reconciliation process, which forbids bills from increasing deficits beyond the 10-year budget window and needs only a simple majority.
Rather than use standard congressional accounting, Republicans are saying that extensions of tax cuts set to lapse Dec. 31 don’t count toward budget deficits the same way that new tax cuts do, because they are just continuing current policies. According to the Congressional Budget Office, that assumption turns the Senate’s bill from a $3.3 trillion deficit increase that can’t pass through reconciliation into a $508 billion deficit decrease that can.
…Republicans are relying on a section of budget law that gives the Budget Committee chairman—currently Sen. Lindsey Graham (R., S.C.)—the ability to set numbers that Congress uses for budgetary purposes. They say it isn’t necessary to get advice from the Senate parliamentarian on this question and thus won’t be overruling her…
…Democrats and budget watchdogs have been warning for months that the Republicans’ maneuver erases a crucial limit in reconciliation’s Byrd Rule and opens the door to other future accounting games. Congress could create huge new programs, schedule them to expire and then declare any extensions to be free….
…Democrats and budget watchdogs have been warning for months that the Republicans’ maneuver erases a crucial limit in reconciliation’s Byrd Rule and opens the door to other future accounting games. Congress could create huge new programs, schedule them to expire and then declare any extensions to be free…
…The tax cuts are expiring because of the way Republicans wrote their 2017 tax cuts to comply with the rules of reconciliation. That year, they set themselves a $1.5 trillion tax-cut limit within the 10-year budget window. They made some tax provisions permanent, including the corporate tax rate cut.
Rather than find ways to pay for all their tax cuts indefinitely, they scheduled the bulk of the individual tax cuts to expire after 2025. It takes a law to change that expiration, and that is why standard budget rules require counting that extension as a cost.
This can get confusing, so let me see if I can distill it down for you:
In certain circumstances, the Senate can pass bills with only a simple majority of 51 votes without having to clear the filibuster hurdle of 60 votes through a process called “reconciliation”;
A bill that increases the federal deficit for more than 10 years cannot be passed through budget reconciliation in the Senate;
In order to pass the Trump tax cuts in 2017/2018 via reconciliation (b/c they didn’t have 60 votes), Republicans passed some permanent tax cuts (for corporations) and made the vast majority of individual tax cuts temporary, expiring 9 years later in 2026;
Therefore, in order to keep the expiring (by law) individual tax cuts they admitted would increase the deficit/debt when they passed the original law in 2018 – mostly for the wealthy – Congress had to pass a new law allowing the tax cuts to remain in place;
But, again, since they didn’t have the 60 votes in the Senate needed to break a filibuster, they had to pass the new law through the reconciliation process;
The Senate Parliamentarian (who is the nonpartisan referee of Senate rules and procedures) would usually decide if a new proposed law meets reconciliation requirements;
Since Republicans knew the Parliamentarian would rule against them, they simply bypassed her in favor of the Senate Budget Committee Chair – Lindsay Graham (yeah - THAT guy);
Graham ruled that extending tax cuts that were already in place (but, remember, due to expire by law written by the same Republican majority 9 years earlier) somehow didn’t increase the deficit, and therefore could be made permanent under “reconciliation” process.
In summary, the Republicans in the Senate wrote a law 9 years ago that they knew blew up the deficit/debt, so they made most of the tax cuts temporary and scheduled them to “sunset” (expire) in 9 years. They now just voted to make those same tax cuts permanent by now claiming the opposite of what they said 9 years ago - that they somehow, magically, don’t increase the deficit/debt this time around.
(FYI, the respected, non-partisan Congressional Budget Office has “scored the recent BBB bill and – you guessed it – CBO says it will increase the deficit by $3.4 trillion over the fiscal years 2025–2034 (excluding interest) and by $4.1 trillion including interest).
Phew – my brain hurt just writing that. Deep breath. In and out. In and out.
I debated one of the Republican Senators during the 2018 campaign and pointedly asked him why they were sunsetting the original proposed tax cuts in 9 years if, as he claimed, they would not increase the deficit. His answers were misdirection and evasions. This sitting Senator also claimed the 2018 tax act would increase tax revenue, increase worker pay by up to $4,000/year and increase business investment. None of these things happened.
Back to inside baseball. For those of you not familiar with this term, it refers to knowledge about a topic that only insiders or experts would understand or care about.
Having run several federal races and knocked on thousands of doors, I can tell you that the vast majority of voters – and I mean 80, 85, 90 percent or even more – have no idea that things like this happen.
Yet most of us here on this site, and most political insiders and politically active people, don’t realize the true extent of the voting electorate’s ignorance. Ignorance not just on issues, but also on the simple basics of how our government and system functions.
If we can’t find a way to educate voters, to fight back with easily understandable messaging that speaks to voters’ fear and anger (addressing, not exacerbating them), in my view, we are screwed.
I wish I had the answer. But I know the problem…
PS – another big part of the problem is the media regurgitating and using Republican framing when reporting (see this article today form Politico as an example: A $715 billion tax cut turns into a $4.5 trillion sales job - POLITICO). One thing we can do is find ways to put pressure on – and refute in our responses - media orgs that act as scribes instead of holding power to account (the main reason they have 1st Amendment protection).
