Dem
47
GOP
53
Friday night and Saturday morning, the Senate conducted an hourslong vote-a-rama on the budget plan. Senate rules allow senators to offer amendments, and the Democrats offered plenty of them, even though they knew none would be adopted. Their plan is to later use the votes to smear Republican senators for voting against measures that the voters like, such as banning cuts to Social Security, firing Elon Musk, blocking the new tariffs, and forbidding Defense Dept. officials from using private apps to discuss war plans. Now there will be ads like: "Democrats wanted to prevent Elon Musk from gutting Social Security, but Sen. [X] voted to allow him to keep doing it." Republicans weren't entirely unified, but in the end, the measure passed by a 51-48 vote, with Rand Paul and Sen. Susan Collins (R-ME) voting against it for various reasons. Rand voted "no" for ideological reasons; Collins voted "no" because the 2026 election is going to be a tough one for her.
Among other things, the plan would make the 2017 tax cuts permanent and provide $1.5 trillion over 10 years in additional tax cuts. It also covers energy, immigration and defense.
One of the most controversial issues is magic accounting that assumes the 2017 tax cuts don't expire this year. The rules say that a bill passed via reconciliation cannot increase the deficit over the current value 10 years down the road. That requires first creating a baseline of what the deficit is now. By pretending the tax cuts don't expire, the baseline will be the current $1.8 trillion deficit, allowing it to be $1.8 trillion in 2025. However, if there are no new tax cuts, the 2017 ones will expire and the government will get lots of new revenue, greatly reducing the deficit to much less than $1 trillion. This would make it impossible to use reconciliation to renew the tax cuts and carry out all of Trump's expensive plans without decimating the military, Social Security, Medicare, and Medicaid. And, of course, a giant-tax-cut bill has no hope of passing through normal order, thanks to a surefire Democratic filibuster.
Some senators don't like the use of magic accounting because it, in fact, allows the deficit to grow (which they are against), and also because they know that some day the Democrats will do the same thing, claiming the Republicans pioneered the concept. Not surprisingly, the magic accounting was included in the bill, but Senate parliamentarian Elizabeth MacDonough could call foul once the Senate and House have agreed on an actual bill. Sen. Lindsey Graham (R-SC), foreseeing this, said that he and the Republicans may "bypass" MacDonough. That is just a polite way of saying that they might ignore her.
This doubles down on the "Democrats will do the same thing" part of the GOP strategy. In fact, it triples down, or quadruples down. If Republican committee chairs like Graham are allowed to unilaterally decide what does, and what does not, count for reconciliation, then Democratic committee chairs are allowed to do the same thing. Once the Democrats regain the upper chamber, then likely Senate Finance Committee chair Jeff Merkley (D-OR), who is one of the leftier members of the Senate, is going to be like a kid in a candy store. Medicare-for-all? Lifting the earnings cap for Social Security? Funding 500 new federal judges, to be appointed by a Democratic president? All legal under reconciliation. Ignoring the parliamentarian is not much different from just killing the filibuster. For that reason, many outlets are describing Graham's threat as "the nuclear option." If he goes through with it, and his fellow Republicans sustain him, don't be surprised to see the filibuster fall next. The consequence might not actually be so horrible: majority rule. If 51 senators, 218 representatives, and the president wanted a bill to pass and become law, it would pass and become law. Weird, huh?
The bill the Senate passed also has to pass the House, which will undoubtedly modify it in many ways. The House Freedom Caucus wants to gut spending much more than the Senate bill does. Also, half a dozen House members from bluish districts in New York and California say they want to raise the cap on deducting state and local taxes (SALT) and their votes depend on this. That puts them on a collision course with the FC.
One of the biggest differences between the Senate plan and what is developing in the House is how to pay for the tax cuts. The Senate version directs the committees to cut only $4 billion in spending, on account of the magic accounting trick. The House version intends to cut at least $1.5 trillion, to actually offset the new tax cuts. If MacDonough rules that the magic accounting is not allowed, and Senate Republicans decide to listen to her, then the final bill will look more like the House bill than the Senate bill. The Senate version also raises the debt limit by $5 trillion. Many FC members are dead set against that.
Once the House is finished, a single version has to be worked out. That is where the sausage is made. It won't be pretty. It never is. The bill is not an appropriations bill. It merely tells the various committees how much they can spend. Where they cut to keep below the limit imposed by the bill is up to them. That part won't be easy either. (V & Z)