A shortcut to tax cuts

The bottom line of the budget blueprint passed by the U.S. Senate on a party-line vote Thursday night is that Republicans are unconcerned by the federal deficit. The measure that passed on a 51-49 vote gave the green light for deficit-bloating tax cuts of up to $1.5 trillion.

The Republican-controlled House is expected to take up the blueprint this week, and there is every reason to believe it will pass there.

Here was the critical provision in the blueprint: Its “reconciliation instructions” state that a tax bill would be insulated from a filibuster (unending debate) as long as it does not add more than $1.5 trillion to the deficit. Under the arcane Senate rules, it takes 60 votes to invoke cloture — the term for cutting off a filibuster and forcing a vote on a bill. In other words, Republicans would have needed Democratic cooperation to pass their tax-cut plan. Now they won’t. The budget blueprint allows for passage of the tax cuts by a simple majority — and Republicans hold 52 of the 100 Senate seats, and Vice President Mike Pence would have the deciding vote in the case of a tie.

So the tax cuts are about to move on a fast track.

The final vote was preceded by the defeat of a series of Democratic amendments, including one by Sen. Heidi Heitkamp of North Dakota that the socalled reform would prevent tax increases on people making less than $250,000 a year. Hold on to your wallets, Americans.

Both the budget and the GOP’s “tax reform” package remain mostly amorphous. The blueprint calls for spending cuts of $5 trillion over the next decade, but with few specifics, save for reductions of $473 billion in Medicare and $1 trillion in Medicaid.

As for tax reform, the rate cuts are supposed to be partly offset by a scaling back of deductions. But again, the details will make all the difference in whether the promised cuts actually result in an increase in take-home pay. One of the options being floated by the Trump administration would be elimination of the deduction for state and local taxes, which would be especially consequential in a high-tax state such as California.

There is also a distinct element of magical thinking in the Republicans’ approach. President Trump and GOP leaders on Capitol Hill are arguing that the tax cuts will stimulate enough economic activity to cover most if not all of the $1.5 trillion. There is another wild card in the equation: interest rates, which have been at a historic low. If they rise, this glut of government borrowing could prove onerous.

At least one Republican, Sen. Bob Corker of Tennessee, voted against the blueprint because of his deficit concerns. It will take a few more voices of reason to keep the party from putting the U.S. on this risky fiscal course.