What To Expect During Today's Tax Reform 'Vote-A-Rama'

Since the federal government has been operating under a series of continuing resolutions for the last four years, it’s been a while since the Senate held an old-fashioned “vote-a-rama” – and yes, that is the technical term (have you not read Robert’s Rules?).

Bloomberg describes this hoary legislative ritual as “an overnight vote-till-you-almost-drop ordeal that’s part of adopting a budget.” And, because a budget bill is needed to unlock the special reconciliation provisions that would allow Senate Republicans to circumvent a Democratic filibuster and pass tax reform with a simple majority, GOP lawmakers are bracing for what’s likely to be a long, dark night of the soul.

If the GOP fails to pass the budget bill, they risk derailing what the White House has touted as the first comprehensive tax reform program since the Reagan era (the Bush tax cuts don’t count, of course). But thanks to President Donald Trump’s penchant for burning bridges, victory is far from assured.

And as if the Republicans’ razor-thin two vote majority (further weakened because of the illness of Thad Cochrane) wasn’t tenuous enough, “vote-a-rama” tradition requires lawmakers to vote on amendments offered by Republicans and Democrats alike – virtually guaranteeing that the process will be fraught with disruptive tangents as members try to address the myriad legislative priorities that have foundered since the inauguration.

Several amendments have already been offered. Democrat Maria Cantwell of Washington has filed an amendment to force Republicans to go on record about whether to eliminate the state and local tax deduction - an issue that’s prompted a bipartisan outcry over the possibility that it could raise taxes on nearly 30 million American households, Bloomberg reported. Democrats have also proposed amendments on whether tax cuts should benefit the rich and increase the deficit. Non-binding policy votes on gun control and police brutality are expected – providing grist for campaign ads in 18 months’ time.

By sometime early Friday, the senators should be worn out and ready for a final vote on the budget. But even President Donald Trump doesn’t know if Mitch McConnell will be able to pull it off.

If you intend to stay up to witness the excitement for yourself, here are a few topics to look out for, courtesy of the Hill.

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What amendments will be offered?

As Republicans try to focus on the budget, Democrats are trying to shift the conversation toward health care following Trump’s decision to cancel federal subsidies for insurers – a decision that has been widely criticized as forcing Republicans to take ownership of the Obamacare “disaster”.

Some Republican deficit hawks might also try to extract concessions on budget cuts to offset lower revenues, as the Trump administration’s current plan would likely widen the budget by $1.5 trillion over ten years.

Democrats already introduced three amendments on Wednesday that would have blocked potential cuts to Medicaid, shored up funds for Medicare and prevented tax cuts from benefiting the top 1 percent of earners.

 

 

They are also expected to go after rule changes in the resolution, such as a carve-out for Senate pay-as-you-go rules about the deficit that Republicans inserted to protect their tax-reform efforts and a decision to scrap the requirement for Congressional Budget Office scores to be available for 28 hours before votes are allowed.

On the GOP side, there is little appetite to bring forward amendments that could derail the tax reform process, but fiscal hawks and defense hawks may try to force their issues. Republicans are split on exactly how much spending should go to the military and how important it is to keep the deficit down as they enact their priorities.

What’s the Democratic strategy?

Democrats’ amendments will primarily focus on four priorities: Blocking cuts to Medicare or Medicaid, preventing tax breaks for the wealthy, preventing tax hikes for the middle class, and making tax reform deficit neutral. 

The main thrust of the amendments are to reinforce the Democrats’ political message and force Republicans to take uncomfortable votes. But with individual Democratic members freely able to offer their own amendments, there is a question of how successfully that strategy might play out.

 

Democrats are locked in a series of heated battles with Republicans and the White House over priorities they need to address in the coming months, and it’s possible that some members — or even Democratic leadership — will come around to a different perspective.

Will there by any GOP defections?

Rand Paul is the only confirmed no vote on the Republican budget bill, as Republicans have been unable to meet his demands for spending caps.

With Cochrane absent, one more vote ‘no’ vote would derail the budget. Sen Bob Corker, another deficit hawk who has recently feuded with Trump, might be tempted to vote no and detail his rival’s agenda. With most of the vote wrangling still to come, another holdout could easily emerge.

McCain himself, often a wild card in legislative battles, said he would vote for the resolution despite wanting more defense spending...still, a small group of senators could plausibly threaten to derail the process unless they get their way on a certain issue, whether it be spending, defense or some element of tax reform.

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Vote-a-ramas can go late into the night, and the Senate this year has proven its ability to stick around until the wee hours of the morning when a crucial issue is at stake, meaning the latest session could last well into Friday. But more importantly for investors and the administration will be the market reaction Friday morning. If tax reform is derailed, will it finally knock the legs out from under the stock market and destroy one of the Trump administration’s most cherished narratives to crumble?

Or will markets shrug it off, as they’ve shrugged off the administration’s other legislative failures – not to mention the threat of nuclear war, hurricanes, wildfires, earthquakes, independence referendums and interest rate hikes?

What do you think?