Republicans are locked in one of those inside the beltway debates that only they and an opposition hoping to divide them pay attention to. Ostensibly, how to get âone big, beautiful billâ to the Presidentâs desk by summer.
Much of America is tuned out to the inside baseball over a reconciliation package that aims to preserve existing tax cuts, control federal spending, boost energy supplies and strengthen border securityâbut should it fail the country will start paying attention very quickly.
Thereâs trouble in the Senate over the House-passed version that calls for $1.5 trillion in budget reductions over a decade, without which spending will start to eat into the reauthorization of $4.5 trillion worth of tax relief in the 2017 Tax Cuts & Jobs Act (TC&JA). And now that blood is in the water, a few political misfits in the lower house are rethinking their support as well.
It goes without saying that Democrats want to let the clock run out on TC&JA. Sincemany of its provisions expire at the end of the year, no action on the reconciliation bill means a massive tax hike on the American economy. That is, as usual, what liberals desire.
Yet whatâs really threatening the domestic centerpiece of Trumpâs second term is once again Republicans circling the wagonsâand shooting inward. Having far less to do with principle and far more to do with self-preservation, GOP âmoderatesâ on the left and a few LINOs (âlibertarians in name onlyâ) on the ârightâ are holding the âone big beautiful billâ hostage.
If it all sounds too familiar, it should.
This is exactly how our bill to repeal and replace Obamacare in Trumpâs first term failed. The same toxic one-two punch from purists in safe districts and never-Trumpers in blue ones culminated in the late Sen. John McCainâs coup de grâce, costing Republicans dearly in the 2018 midterms.
And now itâs coming back to haunt them in more ways than one. If the GOP doesnât quickly renew the TC&JA soon, history may repeat itself in next yearâs midterms. Moreover, one of the fiscal drivers making it more difficult to do so is a direct result of failing to repeal Obamacare in the 115th Congress.
The Affordable Care Actâs (aka Obamacare) biggest cost driver was the massive Medicaid expansion now at the heart of negotiations over the âone big beautifulâ bill in front of Congress. According to a Democrat-media complex, touching this new âthird railâ is out-of-bounds.
Despite the howling, getting the tax cut extensions to the Presidentâs desk is not a heavy lift, no matter what âbaselineâ youâre operating off. Indeed, finding modest budget reductions from federal outlays that will total over $54 trillion through 2035 shouldnât be difficult. There are more than enough offsets to comply with âpay-goâ provisions to get the job done.
Indeed, had the Border Adjustment Tax (BAT)âremoving tax breaks for costs associated with imports and exempting exports from taxationâremained part of tax reform in the 115th, the TC&JA could have reduced income tax rates even further.
Instead of opposing Trumpâs modest tariffs or fretting about protecting Big Pharma price gouging in America, grandstanders who wear their Koch brothers libertarian bona fides on their sleeves (in order to fend off primary challenges) might want to take a look at, sayâŚMedicaid spending in Kentucky.
Or leveling a fair tax rate on Wall Streetâs carried interest (no, theyâre not capital gains), $840 billion in university endowments and a $3.3 trillion ânon-profitâ economy? All would go a long way towards meeting the targets and maybe even help pay for the Presidentâs priorities of âno tax on tips,â overtime and some sort of relief for seniors.
The silliest apostasy, however, would have to be reserved for those blue state Republican âmoderatesâ from California to New York. They can rarely be counted on when the âgoing gets toughâ so perhaps itâs no surprise they are now running cover for big spending Democrat governors. This time by insisting a perversion in the tax code called SALT be expandedâor else.
Eliminating the $10,000 per capita limit for the state and local tax deduction costs federal taxpayers about $1 trillion in lost revenue that would have to be made up by raising taxes elsewhere. Instead of giving wealthy filers in high-tax states a massive SALT subsidy, Republicans should zero out the deduction for all state and local taxes and cut federal income tax rates further.
Not only are these âcentristsâ also disinclined to real reductions in the 40 million-plus Supplemental Nutrition Assistance Program(SNAP) program (despite the fact states routinely bypass congressionally enacted ABAWD work requirements for food stamps), but now theyâre demanding that the green-energy credits from Bidenâs bloated Inflation Reduction Act be spared as well.
And just when you thought the insanity couldnât any worse, along come Senate armchair warriors Mitch McConnell, Susan Collins and Roger Wicker and blasting President Trumpâs 2026 Budget for not increasing a $1 trillion DOD budget enough.
Letâs see, the whiz kids at DOGE identify billions in waste and fraud at the Pentagon so naturally pork-barreling politicians clamor for a massive increase inâŚwait for it, the Defense Department. In the process, making it all the more difficult to meet the reconciliation billâs targets.
But budget hawks are no match for defense hawks. In the Senate and in whatâs left of the Liz Cheney caucus (led by the insufferable Don Bacon) in the House. Word has it that they are now demanding $200 billion more for a Pentagon that canât pass an audit.
The administration is proposing a reduction of $163 billion from annual appropriation bills that have ballooned to over $1.8 trillion. The cuts are all nondefense discretionary because the âwar caucusâ insists on plussing-up the DOD to levels Democrats are only too happy to accommodate in exchange for jettisoning Trumpâs âone big beautifulâ tax cut.
When I got to Congress in 2017, sequestration (enacted as a fallback for raising the debt ceiling in the 2011 Budget Control Act) was keeping a lid on both defense and nondefense discretionary spending of just over $1 trillion. Deficits were falling; automatic cuts were working.
Then the âunipartyâ got to work. The budget caps died via the appropriately named 2018 Bipartisan Budget Act. Since, Pentagon spending has almost doubled along with rest of discretionary spending, soon to be followed by a $5 trillion COVID âreliefâ blowout.
Tax revenues, far higher than before passage of the TC&JA, have never been the problem. Spending is.
Former Congressman Jason Lewis is the author of âParty Animal, The Truth About President Trump, Power Politics and the Partisan Press.â This article was originally published on the authorâs Substack page, which can be viewed here. Lewis is also the weekday host of Jason Lewis Live on Patriot.TV.
The views and opinions expressed in this commentary are those of the author and do not reflect the official position of the Daily Caller News Foundation.
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