Tax Analysts Blog

McConnell, Not Trump, Holds the Key to Tax Reform

Posted on Nov 15, 2016

Before the elections, pollsters were confident that the United States faced another four years of divided government. Virtually every prognosticator in the country predicted that Democratic nominee Hillary Clinton would win the presidency, but face at least a GOP-controlled House.  They were all wrong.  Far from being pushed into a media-predicted civil war, Republicans won a complete victory on November 8, with Donald Trump winning the White House while Republicans maintained control over both chambers of Congress.  This opens the door to at least two years of frenzied legislative activity, particularly on tax reform.

Unlike their Democratic opponents, Republicans have a clear agenda on tax and fiscal policy and have been working on it for years.  Former House Ways and Means Committee Chair Dave Camp laid the groundwork with an ambitious draft in 2014.  House Speaker Paul Ryan and new Ways and Means Chair Kevin Brady put out a new GOP blueprint earlier this year.  And Senate Finance Committee Chair Orrin Hatch has been working on an ambitious corporate integration proposal that is almost ready to be unveiled.  The GOP is ready to go, and when President Trump takes office there would seem to be no obstacles to an aggressive legislative agenda.

Except one.  Republicans hold only 52 seats in the Senate, meaning that Democrats could filibuster bills by making sure that the chamber falls short of the 60 votes needed to invoke cloture.  While reconciliation could be used to move pure revenue measures (as it was in 2001 for the Bush tax cuts and in 2010 for the final pieces of Obamacare), that would severely limit what Republicans could accomplish as part of a grand rework of the nation's tax system.  It's also unclear how clean of a vehicle reconciliation would be for repealing the parts of Obamacare that Republicans dislike.  The so-called fiscal cliff in 2012 was the consequence of Bush-era Republicans using reconciliation in 2001.  

Trump, Ryan, and Senate Majority Leader Mitch McConnell might not want to have to repeat that mistake.  And that's where McConnell becomes arguably the most important figure in the early part of the Trump administration.  The Kentucky Republican could move -- like Democrats were planning to do after a Clinton victory and New York Sen. Chuck Schumer becoming majority leader -- to change Senate rules and finally eliminate the 60-vote threshold for closing debate on legislation.  McConnell is said to be hesitant to take that step, but there is no doubt that Republicans are seriously thinking about their options, particularly in the case of Supreme Court nominees.

It's not entirely clear that Republicans will need to kill the filibuster to move major tax legislation.  There are 10 Senate Democrats from states where Trump won 55 percent or more of the vote who face reelection in 2018.  Those Democrats might be willing to work with Republicans to pass a tax reform package that could be sold as relief for individuals and businesses.  And facing four years of Trump, and that same midterm math, the Democrats might not be as aggressive in stymieing a Trump Supreme Court nomination as McConnell was when he was facing less than a year of President Obama.  

But that would be shortsighted thinking by McConnell.  Even if he can get a few Democrats to cooperate on a tax bill or a repeal of Obamacare, it's still likely that the minority party will do its best to frustrate much of the rest of the Republican agenda.  And Republicans are in little danger of losing the Senate any time soon.  It's time for them to take a step that has been long overdue and eliminate the archaic cloture rules. 

Parties that win elections must be allowed to govern.  This applies to both Democrats and Republicans.  With the hyperpartisan climate that has gripped Washington since 2009, that simply can't happen under the current Senate rules unless one party wins 60 seats (which is rare).  Republicans and Obama have shown the futility of governance under divided control.  We don't need any more proof to show that the Senate's antiquated filibuster rules are out of touch with modern U.S. politics.  For the sake of tax reform, and simply for the sake of a functioning legislature, McConnell should finish Harry Reid's work and put an end to unnecessary filibusters.

Read Comments (7)

Bob GoulderNov 15, 2016

"Parties that win elections must be allowed to govern" ... sounds like an argument for UK-style parliamentary system.

Mike55Nov 16, 2016

This all makes perfect sense, but is too pessimistic for my tastes. I cannot accept that the current hyper-partisan environment will endure long term. Although current experience suggests otherwise, artificially creating moderation/compromise within the Senate has generally proven to be a good thing for most of the rule's 210 year history.

More pragmatically, the filibuster offers core Republicans political cover should Trump actually try to push some of his... bolder... campaign proposals. No one really expects this of course, but having an insurance policy might not be such a bad idea, just in case. Why not wait a couple years to see what sort of President you're dealing with before getting 'rid of the filibuster? If Trump proves to be OK, then you can always make a change in 2018.

Mike55Nov 16, 2016

"Republicans have a clear agenda on tax and fiscal policy and have been working on it for years."

Unrelated side point: I think you might be vastly overestimating the amount of unity within the Republican party on tax and fiscal policy. Trump, Ryan/Brady, the Freedom Caucus/Tea Party,* Reformicons, the Religious Right, the Tuesday Group, Hatch, etc. all have very different agendas on, well, pretty much everything.

*I'm still unclear on whether these are two separate groups that heavily overlap, or the same thing. I suppose it doesn't really matter.

Edmund DantesNov 17, 2016

I agree that the filibuster should be dropped.

The more interesting question is, can the IRS attention now be directed at the liberal groups instead of the conservative ones? Sauce for the goose, and all that?

AZsunsetNov 28, 2016

That may not be a worthwhile use of resources.

Bob KammanNov 17, 2016

How about permitting a filibuster only if supported by at least one senator from states representing more than half the national population? The foremost reason that the United States is not a democracy is not the Electoral College; it is the Senate.

Edmund DantesNov 18, 2016

Mr. Kamman, that is an excellent point that I never heard before. Thanks!

But I still prefer dropping the filibuster completely. It's the Constitutional option.

Submit comment

Tax Analysts reserves the right to approve or reject any comments received here. Only comments of a substantive nature will be posted online.


This question is for testing whether or not you are a human visitor and to prevent automated spam submissions.

By submitting this form, you accept our privacy policy.


All views expressed on these blogs are those of their individual authors and do not necessarily represent the views of Tax Analysts. Further, Tax Analysts makes no representation concerning the views expressed and does not guarantee the source, originality, accuracy, completeness or reliability of any statement, fact, information, data, finding, interpretation, or opinion presented. Tax Analysts particularly makes no representation concerning anything found on external links connected to this site.