Republicans Rally Around Raising the Deficit

Republican senators have found the secret to recovering the unity that’s eluded them on major legislation this year. All they had to do was sacrifice the deficit.

In narrowly approving a $4 trillion budget resolution on a 51-49 vote Thursday night, the GOP majority moved an important step closer to the major tax-cut plan that the party wants to enact by the end of the year. After this summer’s defeat on health care, Republicans momentarily eased doubts that they could ever get all of their members—everyone except Senator Rand Paul, at least—to agree to a complicated policy document.

But the unity, and the lure of tax cuts that drove it, come at a cost, both politically for Republicans and potentially for the nation’s debt. The Senate budget would allow Congress to reduce taxes by up to $1.5 trillion over the next decade without offsetting the cost. That had been in the Senate plan all along, but over the course of several hours on Thursday, Republicans had opportunities to shift course. Democrats offered amendments that would have forced Congress to work on a deficit-neutral tax plan, while Paul, the Kentucky spending hawk, tried to get his colleagues to reduce spending as well as taxes. The Senate rejected them all, choosing to forgo, for the moment, the more difficult decisions involved in picking what additional spending to cut or which taxes to raise.

“I will fight for the biggest, boldest tax cut we can pass, but I could not in good conscience vote for a budget that ignores spending caps that have been the law of the land for years and simply pretend it didn’t matter,” Paul said in a statement after the vote. “We can be for lower taxes AND spending restraint.”   

Republicans in the Senate could have also accepted the more fiscally-conservative House budget, which passed earlier in the month and called for tax reform that would not add to the deficit. In a nod to the Freedom Caucus, the House plan also included an extra $200 billion in cuts to mandatory programs like food stamps. But with Republicans in a rush to get to the tax bill and needing to pass the budget first, the House is now more likely to accept the Senate plan than try to meet in the middle with a compromise.

“There was a time not long ago when many congressional Republicans demanded a budget that balanced within 10 years,” lamented Maya MacGuineas, the president of the Committee for a Responsible Federal Budget. “Today, with their vote, the Senate GOP has turned away from this goal, sprinting in the other direction and instead approving a plan that allows for $1.5 trillion in tax cuts to be added to the national debt.”

Democrats saw both hypocrisy and opportunity in the budget’s passage, hammering Republicans for proposing cuts to entitlement programs while advancing a tax plan that benefits the wealthy. “The same Republicans who criticized deficit spending under President Obama would run up the deficit by more than $1.5 trillion in order to benefit the richest Americans,” Senator Dianne Feinstein of California said Thursday.

Budget resolutions are not legislation signed by the president. They’re mostly non-binding, and the GOP plan does not preclude Republicans from pursuing deficit-neutral tax reform or seeking Democratic support. President Trump has made overtures to Democrats from states that he carried last year on the tax bill, but they have complained that the Republicans who are actually writing it are shutting them out of the process. Approval of the budget means Republicans can pass a tax bill with a simple majority in the Senate, bypassing a Democratic filibuster. But the budget’s passage doesn’t guarantee Republican unity on tax reform, and lawmakers in both chambers are still fighting over key details. “The sole purpose of this budget resolution was to kick-start the legislative process on tax reform,” said Senator Bob Corker of Tennessee, who has warned that he won’t vote for a final tax bill that he sees as adding to the deficit.

Republicans in the Trump administration and on Capitol Hill have defended the budget by arguing that tax reform will generate economic growth that would refill the federal coffers, effectively paying for itself. But that line of thinking has generated more opposition within the GOP than it did when Congress passed budget-busting tax cuts under President George W. Bush in 2001 and 2003. The debate isn’t over, and it’ll likely be revived if and when Republicans unveil their tax bill. With the Senate’s approval of the budget resolution on Thursday, the party’s remaining deficit hawks have lost the first round.