By Ryan Boyle

As more election results were confirmed this week, the red sweep took shape.  The Republican party will control the presidency and both chambers of Congress, and the Trump agenda will face few obstacles.  But on fiscal matters, Trump did not exactly receive a blank check.

The rules of the Senate allow a dissenting member to halt debate on a vote through a filibuster.  Once a dramatic act of holding control of the floor through a never-ending speech, the measure has devolved to a simple procedural objection.  A cloture vote can end the filibuster, if a supermajority of 60 of the 100 senators agree.  Republicans hold 53 seats, and their Democratic opposition is unlikely to offer much in the way of compromise.

Used excessively, the filibuster could grind the Senate to a halt.  As such, the rules of the chamber have been amended to allow necessary votes to proceed.  Simple majorities are sufficient to confirm federal judges and executive branch appointees.  51 senators can also pass fiscal measures through reconciliation, which comes with a host of limitations.

Senate procedures limit reconciliation measures to one annual budget bill per fiscal year.  Any parameters must pertain to government revenue or expenditure.  Recognizing the potential for this measure to lead to unchecked spending, the late fiscal conservative Senator Robert Byrd memorialized the Byrd Rule, requiring reconciliation measures to be deficit-neutral after ten years. 

The Tax Cuts and Jobs Act (TCJA) of 2017 was passed through reconciliation.  The fiscal balance requirement is the reason the bulk of it will expire after 2025, setting up today’s debate about its extension.  While the Democratic platform favored extending most of the personal income tax provisions of the TCJA, they also proposed offsets through tax increases that Republicans will not support.  Republicans will go it alone through the reconciliation process. 

The Republican House majority is still being tallied, but will be thin.  The TCJA passed in a different environment of a sluggish economy and lower levels of debt.  Amid soaring deficits and inflationary risks, Republicans’ appetites for further cuts may be much smaller this time around.

The reconciliation process has been pushed to its limits to allow past presidents’ priorities to pass. The next Trump administration may try to justify border security and tariffs as fiscal measures that will lead to budgetary savings.  But as the costs of these measures rise, they will cut into the fiscal headroom to keep taxes low.

An originalist may note that the Constitution does not contain words like reconciliation, cloture, Byrd or deficit.  Congress has placed these rules upon itself, and they could be amended or rescinded.  However, veteran politicians understand that power is cyclical, and every party will have its turn in the minority.  Safeguards repealed today may be sorely missed in the future.

More likely, Republicans will find a way forward with a reconciliation bill next year that extends most of the Tax Cuts and Jobs Act and adds a few Trump priorities.  Tax hikes are a dead letter, but proposed tax cuts may also be a bridge too far.  The tax code is positioned to carry on for another decade, again bounded by reconciliation.  We’ll be braced for another tax debate in the mid-2030s.