How New Tax Cuts Could Pass the Senate

A strong Republican House majority is almost guaranteed to pass President Bush’s economic plan, but what will happen in the Senate, where Republicans hold a mere one-seat majority?

As Democrats demonstrated last year, they can make legislation difficult by using the filibuster-a tactic that forces a three-fifths vote (60) before the Senate can vote on a bill.

However, Bush’s tax cuts could pass the Senate with just 51 votes, thanks to a budget provision that protects certain legislation from stalling tactics.

When Congress established its current system of outlining the federal budget in 1974, it exempted Senate budget outlines from the filibuster and also created a category of legislation called "budget reconciliation" with similar privileges.

To create a reconciliation bill, the Senate budget committee would insert into this year’s budget resolution changes in funding from last year’s projections, along with instructions for other committees to propose changes in the law to reflect those adjustments. Once the budget outline is passed, the committees would bring those changes in law to the floor as "reconciliation" bills, which are not subject to a filibuster.

By taking advantage of this rule, Republicans could drive Bush’s tax cut through the Senate by passing a budget instructing the finance committee to reduce revenue estimates by $670 billion over the next ten years. Then the Senate could later consider a $670-billion tax cut-to "reconcile" the real revenue numbers with the projection-without risk of a Democratic filibuster.

Since its creation, budget reconciliation has been used to pass measures that were either unpopular or unlikely to pass with a supermajority in the Senate. For example, President Clinton’s massive tax hike passed 50 to 49 (with the tiebreaker of Vice President Al Gore) as part of the Omnibus Budget Reconciliation Act of 1993 (H.R. 2264). Likewise, the tactic helped pass Bush’s tax cut in May 2001 (H.R. 1836).

Gayle Osterberg, spokeswoman for Senate Budget Chairman Don Nickles (R.-Okla.), told HUMAN EVENTS that Nickles is still considering whether to use the reconciliation tactic to advance the Bush tax cut. "There are pros and cons of using the reconciliation process for any of these measures," she said.

Although the use of a reconciliation bill will ensure a tax cut if Republicans stick together in the relevant Senate committees, any tax cut passed through budget reconciliation will be temporary, lasting only as long as the attached budget resolution. This is the reason Republicans are still trying to make the 2001 tax cuts permanent, instead of allowing them to expire after ten years along with the 2001 budget resolution.

Budget reconciliation legislation could also be used to force a straight up-or-down vote on drilling in the Arctic National Wildlife Refuge (ANWR). ANWR drilling will probably not get the 60 votes needed to overcome a promised Democratic filibuster, but if the Senate passes a budget that includes anticipated federal oil revenues, it could open ANWR using a reconciliation bill with just 50 votes.