The Week in Review
A busy week in Washington was highlighted by the release of the House Republicans’ plan to overhaul the nation’s tax code (detailed below), the naming of the next chair of the Federal Reserve, and the indictment of President Trump’s former campaign chair as part of Robert Mueller’s investigation into Russia’s interference in the 2016 election.
Washington is still rifling through the details of the tax package released by House Republicans yesterday, with House Ways and Means Chair Kevin Brady (R-TX) aiming to start a markup for the bill on Monday. The bill — which is detailed in full in the attached TRP note — was warmly received by most Republicans yesterday, although a number of policy divides will still need to be mended before the bill hits the House floor. Among the provisions that are splitting different groups of Republicans are the cap on the mortgage interest deduction, the elimination of the state and local tax deduction, and the details of the rules governing taxes pass-through businesses. Additionally, Republican lawmakers are reportedly considering a repeal of the individual mandate in the tax package, which would face a serious uphill political battle, but also offer another $400 billion in savings due to fewer people signing up for insurance and using government subsidies. A chairman’s mark of the bill is expected today that will provide technical fixes to the text ahead of Monday’s markup.
Our Take
Short Termism. A term usually associated with concerns about the perspective of corporate executives willing to sacrifice long term growths for short term gains. Whether the capital markets suffer from excessive short termism is open for debate. However, it appears that this phenomenon is not confined to the business world, and it may be strangling our political system. While there had always been an immediate term focus in politics, especially in the House of Representatives with its shorter terms, the beauty of our political system was to allow that near-term perspective to influence, but not consume the longer-term policies. Unfortunately, over the last twenty-five years, there has been an increase in the philosophy that “good politics makes good policy” resulting in a fractured Congress with little incentive to sacrifice immediate benefit for long term gains. Perhaps this is a byproduct of our on-demand society and its balkanized news sources. Whatever the cause, the recent decisions by Senators Corker and Flake, while heralded by some of the left, are the epitome of this problem. Sure, the odds were against them in their respective races – but favorites don’t always win – and that’s why we play the games. Their failure to even give their supporters a chance to show that the extremist politics espoused by their primary candidates is not viable, means that in the long run, the trend to short termism will likely grow even stronger. Another, and perhaps even more troubling example of this pernicious problem can be seen in the current treatment of Senator McConnell by right-wing media outlets. Just last year he led the effort to stall (some say steal) the nomination of a Supreme Court Justice, all but ensuring a conservative voice in that Chamber for decades. On issues so close to many conservative’s hearts, this decision is far more important than any one election. And yet, they continue to villainize him.
The Week in Review
A whirlwind week in Washington saw Congress take a significant step towards tax reform, the President declare a public health emergency for the opioid epidemic, and a staunch conservative senator announce that he will not seek re-election due to irreconcilable differences with President Trump and the Republican Party.
News out of the Senate came fast and furiously yesterday, led by the announcement from Sen. Jeff Flake (R-AZ) that he would not seek re-election in 2018. In a stirring speech on the Senate floor, Sen. Flake said that his beliefs in limited government, free trade, and immigration reform presented a “narrower and narrower path to nomination in the Republican Party” and criticized the party for failing to speak out against the President’s “reckless, outrageous, and undignified behavior.”
The House returns today after a week in recess, and both chambers are looking at a hefty legislative agenda this week. The lower chamber starts with six suspension bills to consider today, including a bill (H.R. 2141) to authorize $9 million for Customs and Border Protection to prevent unlawful importation of fentanyl and certain other drugs. Those bills prelude the most significant House action of the week, approving the fiscal 2018 budget resolution (H. Con. Res. 71) as amended by the Senate. Passage of the measure — which includes reconciliation instructions for the Republican tax reform effort — would send the budget resolution to the president’s desk. The House will also be considering a bill (H.R. 469) to impose limitations on the consent decrees and settlement agreements that federal agencies can use, and a bill (H.R. 732) that would limit the donation clauses that are used by some regulators in enforcement cases.
The Week in Review
With the House out of town, the Senate used most of the week’s floor time to approve a budget resolution (H. Con. Res. 71) for the 2018 fiscal year that would provide reconciliation instructions for tax reform legislation that could circumvent a possible Democratic filibuster. The vote was by a 51-49 margin, with Sen. Thad Cochran (R-MS) coming back to Washington to vote, leaving Sen. Rand Paul (R-KY) as the sole Republican defector. The resolution provides for a $1.5 trillion tax cut over the next decade, marking a compromise between fiscal hawks and those seeking a deeper tax cut to both individual and corporate rates. And in a surprise move, the resolution includes a last-minute deal with House leadership to boost defense spending that means the resolution is likely to simply be re-approved by the lower chamber this week rather than going through the conference process.
The Senate is prepping for a vote-a-rama today on proposed amendments to the 2018 budget resolution (H. Con. Res. 71) that includes reconciliation instructions to facilitate a tax reform package. The process may keep the Senate in session late into the night, with a final up-or-down vote on the underlying resolution expected before the upper chamber breaks for the week. The Republican Study Committee has compiled a helpful tracker for all of the amendments submitted by both parties, although only a handful are likely to be adopted. Passage of the budget will send it to conference with the House, which is likely to progress quickly in order to keep to the Republicans’ goal of advancing tax reform legislation to the president’s desk by the end of the calendar year.
Our Take
With just under a month of scheduled legislative days remaining before funding for the Federal Government runs out, we are now fully ensconced in the high drama of the calendar. Loyal readers may recall that we initially encouraged people to look at this year as a play in four parts. Perhaps a soap opera would have been more appropriate. Regardless, all of the drama, failure and inactions of the past year weigh heavily on the cast of Congress as it looks to tie up those loose ends. This weekend, I heard a report that, among other things, noted that Congress has two speeds – lightning fast and glacially slow. Without faulting the reporter, this is what things may appear to the outside observer. But for those of us who can see inside the gears, we know that those things that seem to spring out of nowhere usually have been carefully constructed in a time intensive way.
The Senate returns to Washington today while the House is out for an in-district work period until Oct. 23. The primary agenda item for Senate lawmakers will be mirroring their House counterparts in advancing a FY2018 budget resolution that includes reconciliation instructions to be used for a Republican-backed tax reform package. Given the partisan nature of the resolution, Senate Majority Leader Mitch McConnell (R-KY) will again be relying on the strength of the narrow Republican majority in order to secure the necessary votes for passage of the resolution, although one Republican — libertarian Sen. Rand Paul (R-KY) — is seen as a likely “no” vote. The resolution does not appear to be in any danger of failing, however, particularly after moderate Sen. Susan Collins (R-ME) said over the weekend that she is “likely a yes.” Republicans are seeking to complete the budget process in a timely fashion in order to facilitate their ambitious goal of sending tax reform legislation to the president’s desk before the end of the calendar year.
Continue reading “This Week on the Hill: Senate to Consider FY18 Budget, Disaster Relief Bill”
