Republicans return to Congress on Monday facing a packed agenda with little time to enact it, as party leaders aim to quickly pass their massive tax plan and then cut a budget deal with Democrats before the end of Friday to avert a government shutdown.
Republicans’ tight timing on taxes is self-imposed. GOP lawmakers have for months been racing to meet President Trump’s demand that they send him tax legislation before Christmas — a timeline that gained new urgency when Alabama Democrat Doug Jones won the Senate seat currently occupied by Sen. Luther Strange (R).
GOP leaders hope to hold tax votes early in the week before moving to the budget bill. They need Democrats’ help to pass the budget measure through the Senate, and thus far they have made little progress bringing them aboard amid disagreements over spending levels, protection from deportation for certain undocumented immigrants and a federal health insurance program for low-income children.
The outcome of the tax votes, however, appears certain after Republican Sens. Marco Rubio (Fla.) and Bob Corker (Tenn.) on Friday pledged their support. The two gave the GOP the Senate votes to pass the bill, even as Sen. John McCain (R-Ariz.), who is battling an aggressive form of brain cancer, returned to Arizona on Sunday. He is not expected to vote on the final bill.
The measure’s passage would mark the first major legislative accomplishment for Trump and GOP leaders in a year of stumbles, the products of months of negotiations and late adjustments aimed at winning over the last holdouts.
Republicans fanned out across the national news shows Sunday as part of their continued efforts to sell the public on the bill, promising benefits to the middle class both from tax cuts and ensuing economic growth.
“We think as a result of lowering business taxes, wages will go up. So, this is a huge opportunity for creating jobs, for creating tax cuts for working families,” Treasury Secretary Steven Mnuchin said Sunday on CNN’s “State of the Union.”
Congress’ nonpartisan tax analysts, joining several other nonpartisan assessments, concluded that the bulk of the bill’s benefits would go to the wealthy and corporations. Those analyses have also projected that the cuts will produce far less economic growth than Trump and administration officials are promising.
The plan, unveiled in its final form Friday, would make the biggest changes to the tax code in three decades. Most significant, it would drop the corporate tax rate to 21 percent from 35 percent. The bill also would cut taxes for nearly all individuals, giving the biggest trims to the wealthy but in most cases providing some relief for the middle class.
Polls suggest that the public is skeptical of the promised major gains for the middle class. In a recent CBS poll, 76 percent of respondents said the bill’s biggest benefits would go to the largest corporations. Democrats, who were shut out of the bill’s construction and find themselves all but powerless to prevent its passage, attempted to hammer home that point Sunday.
“What we are seeing here is a real massive attack on the middle class,” Sen. Bernie Sanders (I-Vt.), who caucuses with Democrats in the Senate, said Sunday on CBS’s “Face the Nation.”
For Republicans, the bigger drama may come later in the week, after the planned tax votes in the House and Senate, when leaders from both parties weigh a spending deal to avoid a partial government shutdown before funding runs out at the end of the day Friday.
As the tax debate has consumed Congress, there has been scant progress toward a spending deal.
House Republican leaders filed a spending bill last week that would temporarily extend funding for most government agencies at current levels until Jan. 19, while providing longer-term military funding at higher levels — $650 billion through Sept. 30. That bill is considered dead on arrival in the Senate, where Democrats can block it because of the chamber’s 60-vote filibuster threshold.
To cut a long-term spending deal, Democrats are pushing for an equivalent increase in defense and nondefense funding above the spending caps set under a 2011 agreement — one similar to deals reached in 2013 and 2015 to raise the caps for the following two years. But bipartisan negotiations that have been open for weeks have yet to produce an accord.
Democrats railed against the House GOP gambit last week. Senate Minority Leader Charles E. Schumer (D-N.Y.), in floor remarks Thursday, called the proposal “a spectacle, a charade, a sop to some militant, hard-right people who don’t want the government to spend money on almost anything.”
He added, “And it is a perilous waste of time as the clock ticks closer and closer and closer to the end of the year.”
The spending talks are suffused with other issues. For instance, Democrats and some Republicans want legislation providing legal status to “dreamers” — immigrants brought to the United States as children without documentation — to be attached to the year-end deal.
Sen. Susan Collins (R-Maine) struck a deal with Trump and Senate Majority Leader Mitch McConnell (R-Ky.) to provide subsidies for the Affordable Care Act health insurance marketplaces in return for her vote on the tax bill, but it remains to be seen whether those provisions will be included in any final accord.
The Children’s Health Insurance Program expired Sept. 30, and states have been warning for weeks that coverage could be threatened if Congress does not reauthorize it soon.
And a key surveillance authority used by U.S. intelligence agencies to monitor noncitizens abroad expires Dec. 31, prompting fears of a lapse in national security.
Even if a bipartisan agreement is reached on some or all of these issues, the timeline is tight: The House is not expected to vote on its spending bill until Wednesday at the earliest. That would leave little time for the Senate to take that bill, amend it, and send it back to the House, and any hiccup could mean a breach of the Friday shutdown deadline.
Congress averted a partial shutdown earlier in the month with a two-week deal that left spending constant and punted on all other policy questions, but it’s unclear if either side has interest in another short-term deal.
For Democrats, the vote represents a moment of leverage in a Congress in which Republicans have used their control of government to shut the minority party out of the legislative process almost entirely. With enough Senate votes to filibuster any deal, the Democrats’ leaders, Schumer and House Minority Leader Nancy Pelosi (Calif.), are under intense pressure from their base to protect spending on domestic programs and secure concessions on immigration.
The young people, many of whom have lived in the United States for nearly their entire lives, were afforded temporary protection from deportation via an executive order from President Barack Obama. The Trump administration is changing that policy, and Democrats — as well as some Republicans, such as Sen. Jeff Flake (R-Ariz.) — are eager to replace it with new protections.
Republicans face their own intraparty tensions.
Hard-line conservatives in the House want GOP leaders to stand firm against Democrats’ insistence on raising nondefense spending, arguing that Republicans ought not bow down to those demands when the GOP holds the White House and both chambers of Congress.
If House leaders bow to those demands, the showdown could push an extension past the Friday deadline. Come Saturday morning, many agencies dealing with the public would close their doors, including national parks and federal buildings, though many personnel deemed “essential” to national security and public safety would continue to work.
Republicans of all stripes have campaigned on cutting spending, but since the 2011 accord, federal outlays have continued to rise.
The tax bill, meanwhile, is projected to increase the deficit by at least $1 trillion over the next decade, a figure that would expand greatly if Republicans are correct that future Congresses will extend the plan’s many income tax cuts set to expire in eight years.
Few Republicans have raised major concerns about the tax bill based on its fiscal impact. GOP leaders assert the plan will generate enough economic growth to pay for itself, though virtually every independent analysis of the plan has found that it will fall short of that goal. One prominent senator who raised deficit concerns, Tennessee’s Corker, reversed his opposition to the bill on Friday, saying he had concluded that the country would be “better off with it” than without it.