Senate Republicans Decide Against Having a Real Budget

Time is running out for House-Senate agreement on a congressional budget resolution necessary to “unlock” a future budget-reconciliation bill, which is the only way to enact Donald Trump’s legislative agenda without any input from Democrats. So Senate Republicans, led by Budget Committee chairman Lindsey Graham, have made a fateful decision. They decided not to bother with a real budget, in the sense of one that would significantly restrain their future actions in cutting or raising taxes or spending. Instead, they adopted a shell resolution in which up to $3.8 trillion in tax cuts is deemed as costing nothing and the budget cuts to pay for the few tax cuts they are willing to commit to are minimal. It’s about as pain free of a “budget blueprint” as you can imagine, given the Trump administration’s determination to vastly cut taxes and spending despite levels of debt and deficit spending that are already deemed unacceptable by Republicans.

The resolution is fuzzy on what senators are voting on now versus what will ultimately be in the reconciliation bill, as Roll Call reports:

The measure would punt, for now, on the overall size of offsetting spending cuts, but the text clearly states a preference for a minimum $2 trillion in cuts over 10 years. Given the difficulty of achieving that hefty figure, however, the document provides a huge amount of wiggle room to go lower than that and still meet the Senate’s “Byrd rule” requirements for what can go into a filibuster-proof reconciliation bill.

And the draft budget resolution would provide enough fiscal headroom in the Senate to make permanent the 2017 tax cuts that expire after this year, while offering new tax breaks sought by President Donald Trump, such as exempting tips and overtime pay from income tax. The budget appears to carve out room for more than $5.2 trillion in tax cuts overall, including a $1.5 trillion cost ceiling on new provisions that weren’t part of the 2017 law.

It also would increase the nation’s borrowing limit by as much as $5 trillion — a level designed to give the Treasury enough borrowing authority to get past the midterm elections next year.

There’s a problem, though: The House passed its own budget resolution in late February that does have real cuts in it (including, almost certainly, Medicaid cuts), that doesn’t pretend tax cuts have no effect on the budget deficit, and that boosts the debt limit a trillion dollars less than the Senate’s. All these differences reflect different GOP factions’ strongly held positions, particularly those of the fiscal hawks in the House Freedom Caucus, who will look for quiet assurances that the reconciliation bill will be a lot more vicious than the Senate’s budget resolution suggests. It’s all very hush-hush and sketchy. Word is Trump himself will be deployed not only to squelch dissent in the Senate but to insist the House accepts the Senate resolution without the kind of changes that could require further votes in the upper chamber. Another major piece of unprecedented deceit is the decision to let the resolution provide vastly different “reconciliation instructions” to House and Senate committees, as though two budgets are actually in play. In a very real sense, there are.

But the Senate move that was probably the most audacious was Graham’s sudden assertion of the right (previously understood as being exclusively the prerogative of the Senate parliamentarian) to adopt a “current policy” baseline for expiring Trump tax cuts, which makes extending them until the end of time deficit-neutral and thus “free.” Had the parliamentarian ruled otherwise, it could have thrown a major monkey wrench into the entire Trump legislative agenda. Now Republicans are just assuming the answer they want is the right one, and it’s unclear whether the parliamentarian can wrest back that power later on in the process.

For now, the Senate is on track to adopt its unique and dishonest version of the budget resolution, and the House will then be under pressure to go along with it. All these differences of option between fiscal hawks and “Deficits don’t matter” Republicans won’t go away but will be kicked down the road. In the end, Trump will have to resolve all the problems on highly technical spending and revenue issues that he almost surely doesn’t understand. What he does understand are the dynamics of dominance and submission.