Senate braces for high-stakes ruling that will decide the fate of Trump's tax cuts

WASHINGTON — Senators are expecting to receive a consequential decision from their in-house referee as early as next week that will shape whether Republicans can make President Donald Trump’s expiring tax cuts permanent.

Senate budget rules require Republicans to pay for the cost of tax cuts in order to permanently extend them. The Congressional Budget Office, the official scorekeeper on Capitol Hill, has established the cost of extending them is $4.6 trillion over a decade when they expire at the end of 2025.

That’s under the “current law” baseline the Senate has used for decades. But if Republicans are allowed to use a different method, the “current policy” baseline, to set the cost at $0, they can extend the tax cuts, which were enacted in 2017, without paying for them.

Sen. Thom Tillis, R-N.C., said he expects a resolution from the parliamentarian “probably by Tuesday or Wednesday next week.”

Under pressure from the White House to extend Trump’s tax cuts permanently in their party-line bill, congressional Republicans are pushing hard to change the accounting method, arguing that the majority party can make that determination.

“We’re all focused on current policy baseline,” said Sen. Mike Rounds, R-S.D. “I don’t know that there’s going to be an issue with the parliamentarian.”

But Democrats are trying to stop them, arguing that such a change would violate the plain language of the 1974 budget law that governs the process where the Senate is able to bypass the 60-vote threshold.

Sen. Jeff Merkley, D-Ore., the ranking member of the Senate Budget Committee, blasted it as a “partisan gimmick.”

“What Republicans are attempting to do is upend decades of precedent and trample on the laws that govern how Congress budgets,” Merkley said. “Congressional Republicans need to realize that ‘magic math’ does not exist and tax cuts cost money, even if Republicans want to pretend that they don’t. Refusing to measure something doesn’t mean it goes away.”

Merkley said the parliamentarian can make a decision once she is given a brief proposal in writing.

“My understanding of the schedule is parliamentarian will probably make a decision sometime next week,” he said. “The debate is carried out with the parliamentarian. She makes a decision. That decision informs what happens on the floor.”

If Republicans lose the argument and have to stick to the traditional baseline, they may need to give up the goal of making Trump’s tax cuts permanent. Otherwise, their break-glass option would be to overturn the parliamentarian’s ruling with a majority vote.

Senate Budget Committee Chair Lindsey Graham, R-S.C., declined twice to say Thursday whether Republicans would overrule the parliamentarian in that scenario.

“We’ll see what happens,” he said. “I think we’re in good shape.”

Tillis sounded skeptical of that idea, likening it to eliminating the 60-vote threshold to overcome a filibuster in the Senate. But he didn’t shut the door.

“I’m not sure. I think that that’ll be a problem for a number of members, because of it feeling a bit like the slippery slope of nuking the filibuster,” Tillis said. “So it’ll just be interesting. We’ll have to see where she rules first, and then talk about it.”

Asked if he would be open to it, Tillis said, “I’m not doing anything hypothetical now. When we find ourselves in that situation, talk to me then.”

Senate Finance Committee Chair Mike Crapo, R-Idaho, is an outspoken proponent of the “current policy” method, arguing that extending temporary tax cuts shouldn’t be treated as costing money. Senate Majority Leader John Thune, R-S.D., has also endorsed the idea. Both their offices declined to comment when asked if they would favor overruling the parliamentarian to achieve it.

Sen. Ron Wyden, D-Ore., the ranking member of the Finance Committee, warned that using the proposed new rule would set a “jaw-dropping precedent” and “change the Senate for a long time to come” if Republicans are successful.

“They are so desperate to give tax breaks to billionaires that they’ll basically use any budget rules imaginable to get it,” he said.