Tax reform sprint leaves little time for funding fight

Republicans have only five weeks to reach a spending deal with Democrats, but an aggressive focus on tax reform during that period is putting the effort in doubt.

Congressional Republicans want to pass a tax bill by Thanksgiving, and President Trump wants to sign it by Christmas. Right in the middle of that stretch lies the Dec. 8 deadline to pass legislation funding the government.

If Republicans and Democrats can’t agree to a new spending plan, or at least a stopgap measure that Democrats say they don’t want, the government will shut down.

“I want to get this all wrapped up by Christmas. It wouldn’t surprise me if we’re not done with everything on the 9th,” said Rep. Tom Cole (R-Okla.), a key member of the House Appropriations Committee.  

Complicating things further, even a short-term deal to push back the Dec. 8 deadline wouldn’t buy lawmakers much time. 

In mid-January, budgetary caps will kick in and cause across-the-board cuts to government spending. The Treasury Department estimated there would also be a January deadline for raising the debt ceiling.

But the push for tax reform is expected to be all-consuming, pushing the funding issues aside.

House Republicans delayed the release of the bill by one day this week as they worked out internal differences. They hope to start marking up the bill in committee next week and pass it the following week on the House floor, despite internal opposition to provisions dealing with state and local taxes. 

The Senate is planning to release its own tax bill, which is expected to have significant differences from the House’s version. They aim to pass that bill before Thanksgiving as well. 

Both chambers take a recess the week of Thanksgiving, further squeezing the legislative timeline.  

When lawmakers return, they will have just two weeks until the Dec. 8 deadline, which has sparked some talk of passing a continuing resolution (CR), a stopgap measure that keeps government funding unchanged. Republican leadership is even considering pushing the whole debate into February, a last resort that Democrats oppose.

“I have heard rumors that we would set aside negotiating an omnibus and do a CR instead because Republicans are so hellbent on passing tax cuts for the wealthiest and corporations that they simply don’t have time to walk and chew gum at the same time,” said Rep. Debbie Wasserman Schultz (D-Fla.) a member of the House Appropriations Committee. 

A central obstacle is that work on spending bills cannot proceed until Democratic and Republican leaders agree on a top-line spending number, and it’s unclear where the starting point for negotiations is. 

“The quicker they can get us a set of numbers, the quicker we can resolve through and start checking things off, and then we’re just down to a few big items,” Cole said.

Republicans have put out three separate top-line proposals in the past six months: President Trump’s proposal that would increase defense spending and cut non-defense discretionary spending by $54 billion each; a House budget that would slash non-defense spending by $5 billion dollars while raising defense a whopping $72 billion; and the final budget, which originated in the Senate, keeping spending levels steady.

Republicans such as Sen. John McCain (R-Ariz.) are itching to get higher defense spending, arguing that current spending levels were to blame for recent non-combat troop deaths. 

“We are killing more of our people in training than our enemies are in combat,” McCain recently said on the Senate floor.

But Democrats are vying for equal increases to non-defense spending.

“Our red line is that we’re going to insist if you increase spending for defense, that you also increase spending for non-defense,” said Rep. John Yarmuth (D-Ky.), ranking member of the House Budget Committee. 

Democrats are also trying to use the must-pass omnibus to address issues such as DACA, the cancelled program that protects immigrants brought illegally to the U.S. as children, as well as several other priorities. 

“We also have to make sure we pass DACA and raise the debt ceiling, all of those things have to happen. And doing those in a CR environment are more challenging,” said Wasserman Schultz.

But some Republicans remain bullish on the chances of getting a spending deal in time, despite the obstacles. 

“We feel like we do have ample time even though the window is closing to get this across the finish line,” said Rep. Mark Walker (R-N.C.), the head of the influential Republican Study Committee.

“When there’s a sense of urgency, things have a way of expediting,” he added.