According to reports, Senate Majority Leader Mitch McConnell (R-KY) has indicated he might use a budgetary mechanism known as “reconciliation” to implement tax reform. Under reconciliation, the Senate can pass legislation with a simple majority and bypass the 60 votes needed to cut off filibusters. Notably, Obamacare was passed through the reconciliation process.
However, in a recently published joint op-ed in The Hill, former Senators George Mitchell (D-ME) and Olympia Snowe (R-ME), and former Representatives Jim McCrery (R-LA) and Earl Pomeroy (D-ND) urge a different approach:
“While this mechanism has been used many times in the past by both political parties, and is a legitimate exercise of political power, we believe the preferable path to enacting meaningful and effective tax reform is through regular order in the Senate. . . Passing tax reform under regular order would also provide the certainty employers require to make the kind of long-term investments necessary for strong and sustained job growth by ensuring that the policy changes enacted will be permanent. By contrast, using the expedited budget reconciliation process could force some of the reforms to sunset at a specific time in the future.”
The four co-chairs of the Bipartisan Policy Center’s American Competitiveness and Job Creation Tax Initiative note that several leading Republicans have advocated the need for passing tax reform through regular order:
“Counterintuitive as it may seem in the current, polarized atmosphere, there is at least some measure of hope for bipartisan action. Both House Speaker Paul Ryan (R-Wis.) and Democratic Sen. Charles Schumer, who will become Senate minority leader, reportedly want an overhaul of our international tax system. House Ways and Means Chairman Kevin Brady (R-Texas) has expressed his desire to pass reform through the process of regular order, as has Senate Finance Committee Chairman Orrin Hatch (R-Utah) who has offered the view: ‘I don’t think it can be done except in a bipartisan way.’
Other Republican senators have also suggested that the legislation needs bipartisan support to establish it as long-term policy. Citing the Affordable Care Act as an example, Senate Majority Whip John Cornyn (R-Texas) remarked recently that ‘if you do things purely on the party line, then it’s unsustainable.’”
With both parties in agreement on the need to fix our complex, burdensome tax code, Congress should make every attempt to pass tax reform legislation on a bipartisan basis. After all, both parties came together some 30 years ago to do just that. However, while regular order is the preferable route, the reconciliation process offers a reasonable backup plan if negotiations in the Senate break down. The need for tax reform is too great and this opportunity cannot be squandered.