Paving the way for Tax Reforms

After abandoning an important fiscal doctrine, the Senate Republicans have decided to go along with the federal deficit. This was needed if the $1.5 trillion tax cut that they want to achieve in the next 10 years is to go through. With the latest turn of events, the Republican lawmakers are succumbing to pressure to register at least one legislative win in 2017. They propose that these cuts have the ability of kicking away the impact of any deficit which will eventually lead to economic growth stimulation. However, this is a move that pits them against their long-held belief of fiscal discipline. This means that a deficit-financed tax cut goes against their principles. At the moment, the Republicans have always believed in reducing the federal budget which reached its all-time high this month. Currently, the federal budget stands at $20 trillion, and it’s expected to grow by $ 10 trillion in the next 10 years. One Republican Senator who is known for being a strict deficit hawk is Tennessee Senator Bob Corker. He recently said that he is concerned with some tax cuts that result to increased deficit. However, he made it clear that his party can turn to alternatives when it comes to bill’s costs. For instance, institutions such as the Joint Committee on Taxation as well as the Congressional Budget Office are good critics when it comes to undervaluing the economic impact that can arise from tax cuts.

Following the agreement, the Tennessee Senator said that he still had his concerns about debt and he would come to the situation later. He said that he would only support a plan that ensures there is continued and significant economic growth. The senator said that it’s his hope the financial situation improves. The deal was sealed when Pennsylvania Republican Patrick J. Toomey decided to go along with the plan from Mr. Corker. The issue with Mr. Toomey is that he is a supporter of deeper cuts. However, if this is to become a reality, they have to pass the budget resolution. This will ensure that they open the arcane procedural tool that means a simple majority in the Senate is enough to pass the bill. This way, they will not require the help of their Democratic counterparts. They also mentioned that they want to achieve tax reforms before the end of 2017. However, the road ahead for the Republicans is long and tough as the Senate will have to vote on the budget.