Whatever one thinks of the House and Senate tax reform plans, one thing is incontrovertible: these are not bipartisan bills, and the majority party has made no effort at any kind of bipartisan cooperation. This stands in stark contrast to the legislative process that propelled the successful passage of the Tax Reform Act of 1986.
The bill Ronald Reagan signed into law enjoyed broad bipartisan support. More than thirty Senate Democrats voted for the Act, as did a majority of House Democrats. Among its biggest backers were Bill Bradley, a Democratic senator from New Jersey, and Richard Gephardt, a leading House Democrat. A New York Times’ piece from 1986 summarizing the legislative accomplishment opens with this laudatory statement: “For years to come, students of politics will look to the odyssey of the new tax law as a prime example of how the American system of government gets things done. The process was a peculiarly American annealing. Few other measures have been shaped and reshaped by so many conflicts and by so much cooperation. Few have reflected so many political trade-offs by so many politicians with such different styles and viewpoints.”
Research Analyst - The Brookings Institution
William A. Galston
Ezra K. Zilkha Chair and Senior Fellow - Governance Studies
The same cannot be said about the current effort at tax reform. Richard E. Neal (D-MA), a ranking member of the House Ways and Means Committee, disparaged the GOP for failing to hold a single hearing on the proposed legislation. “This was, ‘Let’s go get a victory and find a policy,’” Neal said. The House Ways and Means Committee approved the tax plan last week after a brisk four-day markup period (in contrast, the 1986 tax reform haul underwent 26 days of Committee markup in the House).
Sen. Orrin Hatch (R-UT), chair of the Senate Finance Committee, introduced his draft of the bill by praising the majority members of his committee. When he released a revised version of the modified chairman’s mark late Tuesday evening after the second day of markup in the Senate Finance Committee, Sen. Claire McCaskill (D-MO) tweeted Wednesday morning “We got this at 10:18 pm last night. Expected to work on it at 10:00 am today. This is nuts. What’s the damn rush? Why can’t we have a reasonable time to read and study?” The answer is obvious: the point is not sober deliberation, but rather quick victory.
Last week, Republican members of the House Ways and Means Committee unanimously rejected serious proposals to shift their bill toward bipartisanship. Amendments introduced by Democratic lawmakers included the addition of a tax credit for employers participating in apprenticeship programs, restoring and permanently extending the Work Opportunity Tax Credit, and expanding the Earned Income Tax Credit to young and childless individuals as well as increasing the credit and indexing it to inflation.
Each of these proposals once enjoyed bipartisan support. Just this past spring, the Trump administration issued an executive order expanding apprenticeships in the U.S., winning the praise of both Democrats and Republicans.
The Work Opportunity Tax Credit was implemented as part of 1996 Personal Responsibility and Work Opportunity Reconciliation Act, legislation that attracted broad bipartisan support. The tax credit offers an incentive to employers to hire individuals from targeted groups, such as those receiving welfare benefits, residing in empowerment zones, and ex-felons from low-income families. The GOP bill eliminates this tax credit despite the party having supported its reauthorization for the past ten years.
The amendment proposing an extension of the Earned Income Tax Credit was similarly shot down despite the fact that senior Republicans such as Florida senator Marco Rubio and House Speaker Paul Ryan have argued that expanding the EITC would enable more individuals, particularly young men, to participate more fully in the economy.
Terri Sewell (D-AL) and Judy Chu (D-CA), whose proposed amendments were both rejected during the House Ways and Means Committee’s markup last week, lamented the shift in politics since passing the last major tax reform thirty years ago. Remarking on the failure to expand EITC, Chu noted, “I’m disappointed this amendment, which would have gained bipartisan support in the past, was rejected by Republicans.” Sewell, whose apprenticeship tax credit amendment was rejected, stated, “Republicans have thrown away an opportunity for bipartisan work on tax reform.”
This episode makes it clear that left to its own devices, the majority in the House and Senate will cooperate across party lines only if it has no choice. It is up to President Trump, a former Democrat, to convince the members of his current party that their strategy will be self-defeating in the long run.