Published reports indicate that the U.S. Senate is looking to pass a comprehensive tax overhaul next year using the budget reconciliation process.
Senate Majority Leader Mitch McConnell (R-Ky.) said at a press conference Monday that the plan to enact both changes to Obamacare and comprehensive tax reform next year will utilize budget reconciliation. (Ironically enough, the same process was used by Democrats to pass the health care law in 2010.) Doing so would insulate the legislation from the need for 60 votes to break a potential filibuster.
The first budget measure would include the Obamacare changes, the Morning Consult reported. In the spring, McConnell said, the second budget resolution for fiscal year 2018 will “largely be dedicated to tax reform,” meaning it would include specific instructions to tax writers to reduce the deficit via the tax code. Whatever they come up with would then be rolled into a bill to “reconcile” the tax code with the budget, meaning it could pass the Senate with a simple majority, according to the report.
However, initiatives protected under this process must affect federal taxes, spending or deficits, and must “sunset” after 10 years if they have any budgetary impact beyond a decade, as was the case with the Economic Growth and Tax Relief Reconciliation Act (EGTRRA) when it passed in 2001.
To do so would, of course, require that the most of the GOP be on board, in view of their slim majority.
“The two biggest impediments to growth in our country are over-regulation and the tax structure,” McConnell said, according to the report. “And the President-elect seems to be committed to addressing both of those. And the Republican majorities in the House and the Senate are as well.”
Tax reform has been a priority for President-elect Trump and several of his cabinet nominees, as well as for leadership in the GOP-controlled House of Representatives. And that, as we have written about for months, could be a problem for workplace retirement savings.