GOP Plans Roadmap for Renewing 2017 Tax Law in First 100 Days

Republicans plan to leverage their sweep of the White House and Congress in the November elections to unilaterally move sweeping tax legislation, promising to push through renewal of the 2017 GOP tax law in the first 100 days of power.

Unlike most legislation in the narrowly divided federal legislature, simple majorities will be able to move that bill thanks to a process known as budget reconciliation.

The procedure removes the fear of a 60-vote filibuster in the Senate threshold halting their progress, but the complicated process makes it easier for GOP lawmakers to enact President-elect Donald Trump’s agenda without support from Democrats. And it’s not without challenges.

Republicans have been laying the groundwork for months in case they won both chambers and the White House so they aren’t starting from scratch after the new Congress is sworn in, said House Budget Committee Chair Jodey Arrington (R-Texas).

“The Speaker and leader asked me to run point, to sort of take inventory of all the various policies and strategies that we could deploy in a resolution with reconciliation instructions,” Arrington said in an interview.

The goal is to not only figure out what pieces of the 2017 tax law can be locked in through the process but also potentially enact Trump’s campaign promises, regulatory reforms or other GOP policy priorities like reductions in spending.

Although sometimes referred to as a fast-track procedure, reconciliation comes with pitfalls and limitations. There are limits to the types of changes that can be made, and party infighting can derail the process if individual provisions are in dispute.

Lawmakers first will have to agree on how much the package will cost and how much it will add to the deficit.

“There will be a big debate on the numbers,” House Ways and Means Committee member Rep. Adrian Smith (R-Neb.) said recently at a Bloomberg Government event. “What are our aims on the numbers? What is offset?”

Rep. Adrian Smith (R-Neb.) speaks during a news conference in 2023.

Photographer: Nathan Howard/Bloomberg

Watergate Genesis

After the Watergate scandal rocked Washington and the country, Congress in 1974 passed the Congressional Budget and Impoundment Control Act in response to then-President Richard Nixon’s attempts to withhold Congressional appropriations.

It created the House and Senate Budget committees and set up the two-step process by which Congress would first get a budget and then decide discretionary appropriations.

Anticipating the Senate and House wouldn’t always agree, it included language that expedited legislation that could “reconcile” competing spending plans.

That limitation on debate is what saves such measures from the 60-vote threshold in the Senate to overcome a filibuster, practically a necessity on legislation in recent years.

What was designed as a way to standardize annual appropriations and even trim federal deficits has instead been regularly leveraged by both parties to pass large spending and tax policies over the objection of the minority. That’s become especially true amid a rise in partisan filibusters to block bills and the overall breakdown in the budget process.

At the outset of Trump’s first term, Republicans used reconciliation to pass the overhaul of the tax code known as the Tax Cuts and Jobs Act they now hope to renew.

Democrats then relied on budget reconciliation to pass President Joe Biden’s signature laws, first to respond to the Covid pandemic in 2021 and again to enact changes to tax, energy, and health care law in 2022.

This millennium alone, part of President Barack Obama’s health care law known as the Affordable Care Act as well as tax cuts during the George W. Bush administration were all passed through budget reconciliation.

Also read: What a Trump Presidency Means for the 2025 Tax Fight, Explained

Starting at Budget Committees

Each reconciliation process is split into two parts: a budget resolution and the underlying legislation. Both measures must pass both chambers before the president can sign it.

The budget resolution, drafted by the House and Senate Budget committees, sets top-line revenue and spending numbers with instructions to other relevant committees, such as the tax-writing House Ways and Means and the Senate Finance committees, the authority to craft policy that means those targets.

During TCJA’s crafting, the Budget committees drafted instructions allowing $1.5 trillion to be added to the deficit over 10 years. Senate Republicans have sought to downplay such estimates after the Congressional Budget Office estimated extending the 2017 tax cuts for households, small businesses, and the estates of wealthy individuals would cost $4.6 trillion.

“If it’s extending current policy, I don’t believe that that generates a legitimate deficit,” Sen. Mike Crapo (R-Idaho), now ranking member but set to become chair of Senate Finance in January, said in an interview last month. “If you are talking about tax policy in general, there is pro-growth tax policy that I believe needs to be adequately scored relating to its growth potential.”

What’s In, What’s Out

While the simple-majority thresholds help the majority pass their bill, there are additional hurdles stemming from federal law and Senate precedent by which they have to abide.

“The Byrd Rule,” named for the late Sen. Robert Byrd (D-W.Va.), dictates reconciliation legislation can’t include policies without fiscal impact—or “merely incidental” effect—increase the deficit outside the 10-year budget window absent offsets, or touch Social Security.

Provisions found to be in violation of those restrictions during deliberations with the Senate’s parliamentarian are often simply dropped from the bill rather than finding the 60 votes necessary to include them.

Senators are in for some long nights, too. Both the budget resolution and reconciliation legislation are subject to an unlimited number of Senate amendments after debate time expires, allowing lawmakers to force a “vote-a-rama” that can last for hours.