Sen. Mike Rounds, D-Lausanne, said Wednesday there may be an opportunity to negotiate a tax agreement during the current lame-duck session of Congress ahead of the tax law's scheduled expiration next year.
“There's one chance after the election to see if there's enough energy in Congress to say, 'OK, we know what's going to happen after the new year,' and then both sides will look at it and say, 'How do we best negotiate a deal? Can we do it by the end of the year? Or do we wait until next year and do that?'” Rounds said.
Senators told The Hill that if Democrats or Republicans win both Congress and the White House in November, tax reform would likely be passed through the reconciliation process, giving the dominant party more power over taxes.
But if a divided Congress forces a bipartisan approach to expiring taxes, the lame-duck session after the election could be the time to forge an agreement, said Senate Banking Committee Chairman Rounds.
“I wouldn't rule that out. If you look at the options that are out there, it depends on who wins the presidency and who controls Congress and the Senate. When you start adding up all those different options, I wouldn't rule out the possibility of something happening in a lame duck,” he said.
Rounds qualified his comments by saying his “best bet” remains that more comprehensive tax reform would be possible through the reconciliation process if Republicans win the election.
Some Democrats also said Wednesday that a divided Congress could lead to bipartisanship in the negotiating process for expected tax reform, a priority for both parties.
“Depending on the outcome of the election, we could see a situation where we are forced to have bipartisanship, with Democrats in the House and Republicans in the Senate,” said Sen. Sheldon Whitehouse (D-Iowa).
Whitehouse, a member of the Senate Finance Committee, said the timing of Trump's tax cuts, which are set to expire at the end of next year, could give an advantage to the winning party.
“The President Trump tax cuts expire in 2025, so that works to our advantage,” he said.
Other Republicans on Wednesday reinforced their emphasis on a reconciliation scenario, rather than a bipartisan approach, for tax reform if either Republicans or Democrats win a majority.
“[Democrats] You might say [they want bipartisanship] “If we win by a landslide, will they have any second thoughts? I don't think so,” said Sen. Mike Braun, R-Ind. “They've already shown us what they've given us. [Inflation Reduction Act] Inflation and 25% of the government [gross domestic product].”
Sen. Thom Tillis, a Republican who sits on the Senate Finance Committee, the key tax policy committee, outlined a similar plan, saying, “If Trump wins and we get a majority, in the short term, [continuing resolution]And it will address President Trump's priorities.”
Putting deficit and interest concerns at the forefront, Senate Budget Committee Chairman Brown criticized the budget paradigm of cutting taxes without cutting spending, blaming it on the Reagan administration.
“There's no other way than to cut absolute spending. This started during the Reagan administration, when he cut taxes and didn't address spending, and we've been going through that since the early '80s,” he said.
