Taxing Time for Fiscal Sanity
Update 12/17: The House approved of the tax cut package late Thursday on a 277-148 vote. The bill now goes to the White House for the president's signature. The Senate pulled the omnibus package from consideration and now plans another short-term Continuing Resolution.
The Senate voted overwhelmingly on Wednesday to approve of the $858 billion tax cut package and the House may pass it Thursday if a dispute over amendments can be worked out. Coupled with the $1.108 trillion omnibus spending package that the Senate is considering, it is obvious that even in the era of hyperpartisanship that pork and tax giveaways can still bring Republicans and Democrats together. This does not bode well for getting our fiscal house in order, yet there are signs that the tide may be turning.
The tax cut deal gives “compromise” a bad name. It represents the type of inside deal-making that has put us on a fiscally unsustainable course and has left Congress with the lowest approval rating ever recorded. The type of bipartisan cooperation required to overcome our fiscal challenges will look more like that of the National Commission on Fiscal Responsibility and Reform (Bowles-Simpson) than the high-level horse trading that produced the tax cut package. Policymakers will have to make some tough decisions and convince skeptical Americans that they are working in the national interest. They will also have to stick together against withering attacks from powerful interests across the political spectrum.
Fortunately, we are seeing the foundations forming for the type of leadership and collaboration that will be required, but the attitude and culture in Washington will have to change. A bipartisan group of Senators sponsored an amendment to the tax cut bill that would express the sense of the Senate that next year it should produce a comprehensive plan for addressing deficits and debt, including tax reform. Even though the amendment was a non-binding resolution, no vote was allowed. Likewise, an amendment from Senators Bob Corker (R-TN) and Claire McCaskill (D-MO) to establish a binding federal spending cap as a percentage of U.S. GDP also was denied a vote. An amendment from Senator Tom Coburn (R-OK) that would offset some of the cost of the package was given a vote, but the 67 vote threshold required was high, even by today’s standards when 60 votes are usually needed to agree to anything.
In the House, Congressman Peter Welch (D-VT) organized a letter with 53 of his Democratic colleagues opposing the tax deal because it is “fiscally irresponsible.” Conservative members such as Floyd Flake (R-AZ), Mike Pence (R-IN) and Jason Chaffetz (R-UT) have also publicly come out against the measure.
Next year Washington will have to be serious about fiscal responsibility. The tax deal will make tax reform and creating a debt reduction plan more imperative. The failures of the budget and appropriations process also put in stark relief the need for budget process reform.