WASHINGTON — Republicans are considering a far-reaching change to the budget process that would obscure the deficit impact of extending President Donald Trump’s multitrillion-dollar tax cuts in order to avoid paying for them.
It comes as part of a massive bill to advance Trump’s agenda that Republicans are seeking to pass on a party-line basis. If the tactic is successful, it would upend long-standing precedent and change the accounting process for current and future lawmakers, with major policy stakes.
Extending the Tax Cuts and Jobs Act, which Trump signed into law in 2017, would cost $4.6 trillion over a decade, according to the Congressional Budget Office, the official nonpartisan scorekeeper.
That’s under the “current law” metric that has traditionally been used, as the tax cuts are slated to expire at the end of this year. But Senate Republicans want to use a different scoring method called the “current policy” baseline, which would assume that extending tax cuts costs $0 because they’re already law.
The chair of the tax-writing Senate Finance Committee, Sen. Mike Crapo, R-Idaho, endorsed the “current policy” approach, telling reporters that it “recognizes that extending current law does not change the tax policy, does not reduce tax revenue.”
Congressional GOP aides say the idea could have a huge impact on what they’re able to pass in the budget bill. If they use the current accounting process, they have no chance of making the 2017 tax cuts permanent, because that would require paying for it. And this process would also be key to unlocking Trump’s other tax proposals, like slashing taxes on tips and overtime pay.
It’s a tacit admission that Republican leaders have no expectation of paying for the cost of their tax agenda.
“Assuming this is allowed under budget rules, this would represent a massive budget gimmick that would justify and allow trillions of dollars of new borrowing,” warned the nonpartisan Committee for a Responsible Federal Budget, a Washington-based research group that advocates for lower deficits.
Sen. Ron Johnson, R-Wis., backed the idea, arguing that continuing tax cuts shouldn’t score as adding any new red ink.
“We should be using ‘current policy.’ We need to avoid a massive, automatic tax increase,” he said. “That seems like a perfectly rational thing to do, and there shouldn’t be a score.”
The path to achieve that accounting change is uncertain. GOP aides believe it would begin with Senate Budget Committee Chair Lindsey Graham, R-S.C., making an executive decision to pursue the alternative scoring method.
But even if Senate Republicans back him up, establishing it in practice is murkier and could run into roadblocks under the budget law that governs the process. Democrats could try to block it by appealing to the Senate parliamentarian, who referees disputes during the budget reconciliation process.
Sen. Ron Wyden, D-Ore., said Democrats “sure as hell will” fight to stop Republicans from upending the budget process.
“It’s not going to fool anybody at all. What they’re trying to do is spend more money — and they’re going to spend it on billionaires,” Wyden said in an interview. “This is a phony, fake concept.”
Republicans may also face some internal resistance from deficit hawks who consider that idea a gimmick, especially in the House.
“We should be careful with things like that, that can get kind of gimmicky,” Rep. Chip Roy, R-Texas, said. “I’m intrigued by the possibility of permanence. I think that’s a good thing. I think permanent tax rates are good for the country. … However, I don’t like gimmicks, so I’m trying to wrestle with that.”
Others say the idea of making the tax cuts permanent isn’t make-or-break, given that future sessions of Congress and presidents can change tax policy anyway.
“You know, there’s nothing permanent around here,” Sen. John Cornyn, R-Texas, told reporters. “I’m not as hung up on permanency as some of my friends are.”
Sen. Jeff Merkley, of Oregon, the top Democrat on the Senate Budget Committee, said changing the accounting technique wouldn’t prevent the Republican bill from blowing up the debt.
“The Republicans need to realize that ‘magic math’ does not exist. Tax cuts cost money, even if Republicans say they don’t, and the Treasury would still need to borrow trillions of dollars that would explode the deficit,” Merkley told NBC News in a statement. “Refusing to measure something doesn’t mean it goes away. The earth is still warming even if you get rid of thermometers.”
Rep. Richard Neal, D-Mass., said it would set a “terrible” precedent if Republicans adopt that budgeting approach.
He said it would be a backdoor way to nuke the filibuster and take an anything-goes approach to the reconciliation process, which Congress can use once per fiscal year to evade the 60-vote rule in the Senate for changes to spending and taxes. The process imposes significant constraints, like needing to pay for long-term laws that add to the U.S. debt.
“My advice is: If they adopt that policy, we should advise the American people to forget about their credit card debt,” Neal said. “You wouldn’t have to analyze revenue and expenditure.”
If Republicans succeed, they could set a precedent that may come back to haunt them, Democrats warn. For example, Democrats could extend temporary programs indefinitely without finding any mechanisms to pay for it. They could create a costly program on a one-year basis and make it permanent the following year by scoring it at a cost of $0, given that it’s already in law.
Still, House Speaker Mike Johnson, R-La., endorsed the idea.
“It’s a really important principle, and I hope that we can employ that, because it makes a big difference in the calculations. And I think it also makes good logical sense,” Johnson told reporters. “We’re extending the existing law. And by definition, that’s what current policy means.”
Trump wrote Wednesday on Truth Social, “I hope the House and Senate are able to agree on making the Tax Cuts PERMANENT!”
Rep. Jason Smith, R-Mo., the chair of the tax-writing Ways and Means Committee, said the way to make the 2017 tax cuts permanent would be to either change the way it’s scored or allow for a higher deficit number in tax reforms.
“Well, it’s a cost,” he said in an interview. “And so the policy baseline is one way to help get it. Or a higher number.”
This article was originally published on NBCNews.com
