GOP senator opens door to tax negotiations in lame-duck session
Sen. Mike Rounds (R-S.D.) said Wednesday there could be an opportunity during the lame-duck session of the current Congress to negotiate a deal on taxes ahead of expirations in the code scheduled for next year.
“After the election, you’ll have one opportunity to find out if there is enough energy in the Congress to say, ‘OK, we know what’s going to happen after the first of the year.’ Based on that, both sides will look at it and say, ‘In which way do we negotiate our best deal? Can we do it before the end of the year? Or do we wait until next year and do it?’” Rounds said.
If either Democrats or Republicans sweep both the Congress and the White House in November, senators told The Hill the likelihood is that tax changes will be passed through the reconciliation process, affording the dominant party more power over the tax code.
But if Congress is split and a bipartisan approach to the tax expirations is forced, the lame-duck session after the election could be the time to make a deal, said Rounds, a member of the Senate Banking Committee.
“I wouldn’t rule that out. If you take a look at the options that are out there, it depends on who wins the presidency and who controls Congress, who controls the Senate. When you start adding up all those different options on it, I wouldn’t rule out something happening in the lame duck,” he said.
Rounds qualified his comments by saying that his “best bet” was still that Republican victories in the election would allow more comprehensive tax changes through the reconciliation process.
Some Democrats also said Wednesday that a split Congress may lead to bipartisanship in the negotiating process for the expected tax reforms, which are a priority for both parties.
“Depending on how the elections go, you could have situations where bipartisanship was forced,” Sen. Sheldon Whitehouse (D-R.I.) said, “like a Democratic House and a Republican Senate.”
Whitehouse, a Senate Finance Committee member, said the timing of the Trump administration tax cut expirations at the end of next year could present the winning party with an advantage.
“The Trump tax cuts are expiring in 2025, so that gives leverage,” he said.
Other Republicans Wednesday doubled down on the reconciliation scenario, as opposed to a bipartisan approach, for tax reforms in the event of either a Republican or a Democratic sweep.
“[Democrats] might say [they want bipartisanship] if we sweep. Would they think the other way if they swept? I don’t think so.” Sen. Mike Braun (R-Ind.) said. “They already showed us what they gave us. It was the [Inflation Reduction Act] and inflation and the government’s now 25 percent of our [gross domestic product].”
Sen. Thom Tillis (R-N.C.), a member of the Finance Committee, which is an important tax policy panel in the Senate, outlined a similar plan, saying that “if Trump wins, and we get the majority, there’s going to be a short-term [continuing resolution], and then it’s going to work on Trump’s priorities.”
With deficit and interest payment concerns top of mind, Senate Budget Committee member Braun criticized the budgetary paradigm of cutting taxes without cutting spending, something he attributed to the Reagan administration.
“There’s no substitute for cutting the absolute dollars of spending. That started back in the Reagan years when he cut taxes and didn’t address spending. And we’ve been on that binge ever since the early ’80s,” he said.
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