No More Profiles in Courage?
The Senate’s budget gimmick invites a fiscal disaster and sets a dangerous precedent
This is a guest post by Steve Robinson.
In 1957, Senator John F. Kennedy won the Pulitzer Prize for his book Profiles in Courage, which highlighted eight Senators who took courageous stands against public opinion or their own political party. We could use a few Senators like that today. Instead, we have Senators trying to pretend tax cuts don’t cost anything because they’re afraid to pay for them. Specifically, Republicans want the Senate Parliamentarian to let them pretend temporary tax cuts are permanent to avoid a 60-vote point of order. If that sounds arcane, let me explain.
Many people think that in a democracy, the majority should always rule. But in the Senate, there are special rules like the cloture motion to end a filibuster that require 60 votes, instead of 51. Although supermajority requirements can frustrate the will of the majority, Republicans and Democrats recognize that’s not so bad when they are in the minority.
In theory, supermajority requirements can encourage bipartisan cooperation in a closely divided Congress. Sometimes you must compromise to get things done. But often, it produces gridlock, preventing Congress from doing anything. Thus, when the budget process was created in 1974, it was decided that the budget resolution and any reconciliation bill used to implement the budget would be exempt.
Although it only takes 51 votes to pass a budget, there are various 60-vote points of order that are intended to make sure the budget process remains focused on reducing the deficit, or at least not increasing it. But some rules are more effective than others.
In 2007, Congress adopted the Conrad Rule which created a 60-vote point of order against a reconciliation bill that increases the deficit more than $10 billion per year within the 10-year budget period. But this is a Senate rule, not a statute. Thus, it can be waived in the budget resolution so that it does not apply to the reconciliation bill. As a result, only 51 votes are needed to circumvent the 60-vote point of order.
Republicans waived the Conrad Rule in 2017 to pass the Tax Cuts and Jobs Act (TCJA) at a cost of $1.5 trillion. Democrats waived this rule in 2021 to pass the American Rescue Plan at a cost of $1.9 trillion. The current Senate budget resolution also contains this waiver. But there is another rule that has so far proven to be much harder to evade.
In 1985, Congress adopted the Byrd Rule which created a 60-vote point of order against extraneous items in a reconciliation bill. The term “extraneous” includes any provision that increases the deficit beyond the 10-year budget period. This rule was enacted into law in 1990; thus, it cannot be waived in the budget resolution.
By waiving the Conrad Rule, Congress can cut taxes or increase spending as much as it wants for 10 years with a simple majority vote. But the inability to waive the Byrd Rule means tax cuts or spending increases must sunset at the end of that period.
When Republicans enacted the TCJA, they scheduled many of the key provisions to expire at the end of this year to avoid the Byrd Rule. Tax cuts don’t increase the deficit after they expire. But now that the expiration date is approaching, Republicans are trying to circumvent the Byrd Rule by changing the baseline. The baseline is a benchmark or point of reference used to determine the cost of changes in taxes or spending. Normally, these changes are determined relative to the laws that have been enacted to date, including the expiration dates. That’s the current law baseline.
However, Republican Senators argue that Congress routinely extends expiring tax cuts, therefore it’s reasonable to assume that any policy in effect today will continue in the future. That’s the current policy baseline. By using a current policy baseline, the Senate can pretend the temporary tax cuts don’t expire. As a result, no one can raise the 60-vote point of order against the cost of making them permanent. But changing the baseline does not change the results.
According to the Congressional Budget Office, permanently extending these temporary tax cuts would reduce revenue and increase the national debt by $37 trillion through 2054.
Even more troubling than the additional debt is the dangerous precedent this would set. If Republicans succeed in changing the baseline this year, Democrats will surely follow suit the next time they are in the majority. They can use the current law baseline to create temporary programs in one year and then switch to a current policy baseline to make them permanent the next year and pretend it doesn’t cost anything.
We don’t yet know how the Senate Parliamentarian will rule on the Republican plan to circumvent the Byrd Rule. But if there are any Republicans with the courage of their convictions, they should emphatically object.
Steve Robinson is a former chief economist at The Concord Coalition. He previously served as a senior policy advisor at the Social Security Administration and spent over three decades as a policy advisor and budget analyst at the US Congress.