The Republican tax plan is likely to fail under current Senate rules

The Republican tax bill will likely blow up the deficit, and that's a big practical problem

By Matthew Rozsa
Published November 7, 2017 2:50PM (UTC)
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Mitch McConnell (Getty/Win McNamee)

President Donald Trump may be banking on passing tax reform in order to score a legislative win, but a new report reveals that the House GOP's bill may face a major obstacle in its quest to become law.

A report from the University of Pennsylvania's Penn-Wharton economic model found that the proposed tax reform legislation would significantly increase federal deficits in both the short term and the long term, according to MSNBC. The new bill would reduce tax revenue by more than $1.5 trillion, which is the maximum permitted by budget reconciliation rules that Senate Republicans will need to use to thwart Democratic filibusters.

The House bill doesn't even come close to staying under the $1.5 trillion threshold, instead surpassing it by roughly $200 million. The Penn-Wharton model also projected that the House bill would cost another $2.6 trillion in revenue between 2027 and 2039, since the current filibuster rules would prohibit it from increasing the deficit after the first 10 years.

The bill would pose a significant political difficulty to Republicans trying to pass it. In order to prevent the potential deficits, its authors could make the tax cuts temporary or try to find new ways of bringing in revenue. By doing that, however, the bill could easily be spun as being less bold in terms of creating long-term tax reduction, which is its main appeal to many stalwart conservatives in the first place.

The report was completed under the guidance of director Kent Smetters, who served as an economic adviser to a former Republican president, George W. Bush.

Despite this shortcoming, Trump is looking to garner as much Republican support for his tax reform bill even as he courts Democrats as well. On Tuesday the president is meeting with eight Democratic senators.

Matthew Rozsa

Matthew Rozsa is a staff writer for Salon. He holds an MA in History from Rutgers University-Newark and is ABD in his PhD program in History at Lehigh University. His work has appeared in Mic, Quartz and MSNBC.

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