Politics

Senate Looks Ahead to Tax, Debt Limit Debates After Recess

McConnell predicts reconciliation process for tax overhaul

Senate Majority Leader Mitch McConnell met Tuesday with Minority Leader Charles E. Schumer and Treasury Secretary Steven Mnuchin on raising the debt limit. (Bill Clark/CQ Roll Call file photo)

By NIELS LESNIEWSKI and JOE WILLIAMS

Tuesday might not be the last time the Senate leaders address reporters before departing for August recess, but their messages were already setting the stage for September.

Senate Majority Leader Mitch McConnell cited a letter signed by 45 members of the Democratic caucus, outlining the minority party’s priorities for a tax code rewrite, as one reason the Kentucky Republican intends to push the tax overhaul legislation using the budget reconciliation process, which would allow him to bypass their concerns.

The expedited procedures would allow an overhaul to pass with just a simple majority, but as was the case with the effort to roll back the 2010 health care law, that is no guarantee of success.

“We will need to use reconciliation because we have been informed by a majority of the Democrats in a letter I just received today that most of the principles that would get the country growing again, they’re not interested in addressing,” McConnell said. “I don’t think that this is going to be a 1986, where you had a bipartisan effort to scrub the code.”

Senate Finance Chairman Orrin G. Hatch, one of the few lawmakers still around from 1986 when Congress passed a bipartisan tax code overhaul, has told reporters he would prefer a bipartisan process that avoids reconciliation, but he wouldn’t rule the procedure out.

The Utah Republican gave a floor speech Tuesday in which he called for a return to the Senate of yore.

“I believe we can again see this body at its best. But restoring the Senate to its proper function requires real change on all sides. It begins by recognizing that all of us here — Democrats and Republicans alike — are to some extent culpable for the current dysfunction. If we want to break free of the current gridlock, we have to be honest with ourselves,” Hatch said. “And we have to recognize that laying all the blame on the other side is as counterproductive as it is disingenuous.”

On taxes specifically, McConnell said some Democrats might still support a bill through reconciliation, but Democratic leaders pushed for starting the legislative process with at least a bipartisan attempt.

Among those was Oregon Sen. Ron Wyden, the ranking Democrat on the Finance Committee. Wyden noted his previous efforts to draft changes to the tax code with Republican partners.

Judd Gregg and Dan Coats and I wrote bills that have numbers and specifics,” Wyden said. “So, you can write a bipartisan bill if you want it, and the danger if they use reconciliation … you might be able to find your way to 50-plus-1, but that doesn’t make it sustainable.”

Wyden warned that would-be investors might remain on the sidelines if a reconciliation-based tax code overhaul could be reversed by a bare majority of Democrats in a future Congress.

While the tax code rewrite is a top policy priority of President Donald Trump, the circumstances in September are sure to kick it down the congressional agenda somewhat. By the end of the month, it appears lawmakers will need to both continue funding the government and increase the limit on its borrowing authority.

Some Republican lawmakers are resigning themselves to the need to raise the debt limit in the coming weeks without including any major restrictions or changes to federal spending, a signal that a potentially heated debate over the national debt could be avoided.

To wit, McConnell on Tuesday met with Minority Leader Charles E. Schumer and Treasury Secretary Steven Mnuchin to discuss the way forward on raising the debt limit. Mnuchin has said the increase will be needed by Sept. 29, one day before the end of the current fiscal year.

Following a GOP policy lunch Tuesday, McConnell did not outline for reporters a timeline for action but Republican lawmakers and aides do not expect it to be addressed prior to the upcoming August recess.

Senate Majority Whip John Cornyn didn’t sound optimistic about the prospects of bipartisanship, or finishing Congress’ work on funding the government on time. 

The Texas Republican said the GOP conference has not yet discussed what the strategy would be on addressing the debt limit.

“In my experience, the minority party is not going to be particularly interested in helping us out,” he said. “I personally don’t see a way forward to raising the debt ceiling as a clean vote. It’s going to have to be combined with something else.”

When asked whether he thinks Republicans will be able to pass a budget resolution to then advance a tax overhaul under a 51-vote threshold, Cornyn said, “We have to.”

Regarding whether he thinks a continuing resolution will be needed to fund the government beyond September, the majority whip said, “That’s what it looks like right now.”

Schumer, speaking at a separate press conference, said his concern after the meeting with Mnuchin and McConnell was about potential inconsistencies in the Republican position on the debt limit issue.

“We don’t know where the White House is because they [have] different factions who are saying different things, and there were two people missing at that meeting: Speaker [Paul D. Ryan] and [House Minority Leader Nancy Pelosi],” Schumer said. “Where are the House Republicans and where is Speaker Ryan? Before we can address the debt limit, we have to know where they are at.”

While the process to raise the ceiling on federal borrowing has typically been a chance for Republicans to push for broader changes in government spending, some GOP senators are already signaling defeat on that front.

“I have no objection to extending it to a date certain; that way there is some certainty in the process, which is fine with me,” Sen. Mike Rounds of South Dakota said. “We have to realize that no matter what we do, we will have to accept an increase in the debt ceiling while we are changing the economy that this country is running with now.”

One motivating factor for addressing the approaching debt ceiling as soon as possible is the mounting list of items on the Senate’s agenda.

Several GOP senators, however, expressed the consistent Republican desire to make adjustments to the mandatory spending side of the federal ledger in any bill addressing the debt ceiling. Though some recognized the difficulty in doing so when bumping up against a possible default by the U.S. government. 

“This place up here is sick; both sides spend money that they don’t have and we’ve got to stop it,” Sen. David Perdue of Georgia said. “You’ve got to fund the government. You’ve got to get past it, and the sooner we get past it, the better.”

Historically, Republican leadership has relied on Democrats to help pass a debt ceiling increase. Some Democrats, when asked, said they had not yet discussed as a conference what to do.

“We haven’t even talked about it,” Missouri Sen. Claire McCaskill said, when asked if she would support a “clean” increase.

White House Press Secretary Sarah Huckabee Sanders told reporters on Tuesday the Trump administration wants Congress to raise the debt ceiling “as soon as possible.”

John T. Bennett contributed to this report.

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