Tax Overhaul Marked by Blinding Speed

By Siobhan Hughes Features Dow Jones Newswires

One of the defining characteristics of the Republican tax overhaul making its way through Congress is speed.

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A mere two weeks passed between the day the House Ways and Means Committee unveiled its tax plan and the day the full House passed the measure. On the Senate side, 23 days passed between unveiling details of a tax plan and passage.

Lawmakers aim to have a final bill on the president's desk for signature before Christmas. If they achieve that goal, they will have overhauled the entire U.S. tax system -- affecting millions of households and businesses and advancing $1.4 trillion in cuts over a decade -- in less than eight weeks between unveiling a bill and presidential signature.

The last major tax overhaul 30 years ago, by contrast, was legislated over more than a year. The Ways and Means Committee, for example, held hearings on a tax plan in June 1985 and approved a bill in November 1985; the president didn't sign legislation until October 1986.

In the case of the 2010 Affordable Care Act, six months elapsed from the time a bill was introduced in the House to the time it made it into law in March 2010. The 2001 Bush tax cuts passed in less than a month after the House unveiled its bill.

The latest tax bill's speed came into stark light Friday, when lawmakers added dozens of new provisions to the Senate bill so quickly that some were handwritten into the margins of printed text, which is rare though not unprecedented.

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Speed is a two-edged sword. As a tactic, it enhances the prospects of passage by helping congressional leaders dart past foes more quickly than opponents can erect blockades. But haste can also create a public backlash and risk unintended consequences by setting in motion changes in the law whose effects are understood only in hindsight.

"The faster the legislative process, the less time for opponents to mobilize and for wavering lawmakers to lose their resolve to vote yes," said Sarah Binder, who specializes in Congress and the legislative process at the Brookings Institution.

At the same time, she said, "the failure to scrutinize the effects of changing the tax code -- intended and unintended -- could undermine the expected benefits of the changes."

Speed could also undermine the GOP's ability to swing public sentiment.

"Politically, it's incredibly perilous," said former Rep. David Jolly (R., Fla.). He said he supports making corporate tax rates more competitive, but "the congressional GOP has never sold it to the American people."

Among the unintended consequences could be a decision to preserve the corporate alternative minimum tax. The change, made hours before a Senate vote, raised $40.3 billion to help pay for other priorities, but it also appears to have undermined a research and development tax credit that many companies depend upon to spur innovation and Republicans had pledged to protect.

The legislative haste also heightens the risk of drafting errors in the law.

The 2010 Affordable Care Act, for example, was written in a way that was ambiguous on the question of whether federal health insurance subsidies could go to Americans in any state or only those in states that established their own insurance exchanges. A battle over four words in the text -- "established by the state" -- went all the way to the Supreme Court.

Marc Gerson, a former House Ways and Means Committee tax counsel in a GOP-controlled House, said that even bills passed after months of work end up with errors that have to be fixed later, in what is known as a technical corrections process.

One risk for Republicans in the months ahead: a technical corrections bill could require 60 votes in the Senate and is sure to meet resistance from Democrats.

Democrats are already expressing outrage about the speed of the process.

"This is 477 pages," Sen. Angus King (I., Maine) told CBS on Sunday. "There's a lot of stuff in here that I don't think anyone knows about."

Republicans made similar complaints about the process behind the Affordable Care Act, even though it was the subject of extensive public hearings, a sign the measures lacked consensus that could spark future challenges.

"You complain about process when you're losing," Senate Majority Leader Mitch McConnell (R., Ky.) said early Saturday at a 2 a.m. news conference.

Write to Siobhan Hughes at siobhan.hughes@wsj.com

(END) Dow Jones Newswires

December 04, 2017 08:14 ET (13:14 GMT)