Politics as Policy
As we head in earnest into the holiday season, Congress, eager to dispense with high-profile, must-pass legislation before Christmas so that members can celebrate at home with their families instead of in their cramped Washington offices with their staff, had yet another frantic week.
The week began with the federal government facing a shutdown in the absence of a funding resolution signed by President Trump before midnight tonight. For the entirety of their time as the majority party in the House of Representatives, Republicans have depended on Democratic votes to pass long-term spending bills. (Note that, in Washington parlance, “long-term” very often refers to a period between nine months and one year.) The conservative wing of the GOP – the House Freedom Caucus – has historically opposed these longer-term spending bills because, in their view, the bills fail to adequately reduce spending, particularly with regard to social programs such as Medicaid and Medicare. Because no bipartisan deal had yet been agreed to on a spending bill that would fund the government through the end of the current fiscal year, House Speaker Paul Ryan (R-WI) signaled his intent to bring to the House floor a funding resolution that would simply extend current federal government spending levels for an additional two weeks, to December 22.
Speaker Ryan’s plan almost immediately met resistance. Democrats, intent on tying to any spending bill a fix to the so-called Dreamers program for undocumented immigrants who arrived in the United States when they were very young, announced they would be united in their opposition to even the short-term spending resolution. The House Freedom Caucus, concerned about the potential that no deal on a longer-term resolution would be reached by December 22, which would, in turn, force them to spend Christmas in Washington, nearly toppled a normally routine procedural vote on the House floor to demonstrate their frustration. Their obstinacy was not substantive; they simply wanted a short-term resolution that would last through Christmas. Ultimately, with intervention from President Trump and some strong-arming behind closed doors, Speaker Ryan passed his short-term spending resolution yesterday afternoon. Fourteen Democrats crossed party lines to support the vote and eighteen Republicans opposed the measure. The Senate soon followed suit, averting a federal government shutdown, at least for two weeks.
Government funding, of course, was not the only issue being discussed between the two sides of the Capitol this week. Following the Senate’s passage of its tax reform bill last week, both the House and Senate appointed conferees to a conference committee whose task it will be to hammer out the differences between the two chambers’ bills, with a heavy assist from the leadership of both the House and Senate, as well as the White House. Presuming the conference committee produces a negotiated compromise, a majority of members of both chambers of Congress will ultimately have to vote “aye” in order for tax reform to become a reality.
The task before the conference committee is not easy; Republicans can afford to lose only one additional vote in the Senate and still have sufficient support to send tax reform to the President’s desk, and the House and Senate bills have significant differences. The current sticking points appear to be the treatment of state and local taxes – members from high-tax states such as New York and New Jersey are insisting on increasing the amount of state and local tax deductions included in the final bill – as well as the fate of the alternative minimum tax. The House bill provided a path to full repeal of the AMT, while the Senate bill did not. Changes on these or any other provisions will, of course, increase the cost of the package. Because, under its rules, the Senate cannot approve a tax reform bill with only 51 votes that increases the deficit by more than $1.5 trillion, the conferees will have to make up for any additional cost by finding additional revenue. The most probable outcome at this point therefore appears to be an increase to the corporate tax rate, from the 20% rate included in both the House and Senate bill to something closer to 22%. Though President Trump had called 20% a “red line” for the White House earlier this year (the President had initially wanted a 15% corporate rate), in a significant development, the White House this week began signaling it would be open to a 22% rate.
There are other, less high-profile issues that could sink tax reform, as well. For example: Senator Susan Collins (R-ME) voted in favor of the Senate bill based on a promise made by Senate Majority Leader Mitch McConnell (R-KY) to pass two bills meant to bolster the Affordable Care Act’s insurance markets. It is not clear that Leader McConnell has the votes to deliver on that promise and Speaker Ryan this week appeared to dismiss the issue, noting that he was not party to any such deal. This morning, Senator Collins made it known that she would oppose the final tax reform bill if Leader McConnell and Speaker Ryan failed to deliver on passage of her two bills prior to the Senate’s vote on the tax package.
Lastly, it’s been said that politics is policy. That expression was arguably no stronger on display than it was this week, when Senator Al Franken (D-MN), who has been accused of sexual harassment and sexual assault by several women, announced that he would resign his office “in the coming weeks.” Cynics might note the curious timing of both Senator Franken’s announcement and the timing of his departure. Though the allegations against the Senator have been known for weeks, immense pressure from his colleagues in the Senate and leaders within the Democratic Party to resign came after the Senate vote on its tax reform package and one week before the special election in Alabama for which Judge Roy Moore, who faces allegations of his own, is the GOP candidate. Franken’s announcement this week therefore provided Democrats with both a dependable vote on the tax bill last week and the political moral high ground (a considerable modifier) relative to the Republican Party as it faces the very real possibility that Moore wins the election next week. Further, rather than resign immediately, Franken’s intention to resign “in the coming weeks” – a deliberately ambiguous timeframe – ensures that Democrats will maintain his dependable vote through the Senate’s consideration of the final tax reform conference report and, potentially, a long-term spending bill.
Fortunately, we aren’t cynics.