Why Republicans Can’t Just Pivot to Tax Reform

Forget health care: Republicans are moving on to tax reform.

With last month’s collapse of their No. 1 legislative priority, the White House and GOP congressional leaders have made a nearly complete pivot to agenda item 1A—rewriting the nation’s tax code for the first time in more than 30 years.

This effort, they promise, will be different than health care. Why? The party is united around a broad set of principles, rank-and-file lawmakers are desperate for a legislative win, and congressional committees have spent years laying the groundwork for precisely this moment. Allied conservative groups have committed millions to ads promoting the effort, and President Trump will sell it to the country—something he did not do on health care. According to the grand plan, legislation will be introduced in the House in September, votes will be held in October and November, and Trump will triumphantly sign this once-in-a-generation reform into law by the end of the year. Easy peasy. “This is a pass/fail exercise, and we will pass tax reform,” Treasury Secretary Steven Mnuchin declared last week. “It’s going to get done this year.”

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There are many reasons to be skeptical of these confident assertions, not the least of which is that the Trump administration made these exact same claims about repealing and replacing the Affordable Care Act six months ago. To name just a few hurdles: Tax policy is even more complicated than health care. The failure of an Obamacare repeal made tax reform more difficult both in terms of policy and politics. Congress will face even more pressing deadlines in September to fund the government and raise the debt ceiling. And Republican lawmakers are not nearly as unified around the details of taxes as their leaders would suggest.

But the biggest immediate obstacle in the way of quick action on tax reform is a fundamental one: Republicans have been unable to pass a budget for 2018, and without that, they can’t unlock the fast-track reconciliation process that would allow them to enact tax reform without Democratic votes in the Senate. It’s that same mechanism the GOP used to advance health-care legislation that would have passed the Senate last month with just one more Republican vote. Ordinarily, the annual budget is a non-binding document that sets spending levels for the government, which only take effect once Congress passes appropriations bills. But a…

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