Morning Glory: The risk Republicans run by delaying tax legislation
Congressional Republicans have a narrow window for a huge win: if the House GOP can hang together and agree on a budget resolution with the Senate GOP and President-elect Trump, every employer and employee in America banks an enormous win by the end of February: Extension of the Trump tax cuts.
But the debate among Republicans right now is whether to take the wide gate or the narrow gate. Right now it looks the Congressional GOP is headed towards the wide gate. What a gamble. What a big bet. What an unnecessary risk.
If the GOP can hold its majorities together it can pass not one but two budget-reconciliation packages by the beginning of summer. That would allow more time to refine the tax package which is admittedly complex.
But they could get 70%+ of the tax package right now, along with big lifts on the border and our military rebuild. There’s a lot of disagreement among Republicans on some of the fine print on the IRS code and that means difficult negotiations are ahead on some provisions of the tax code. But the cliche of the hour should be: The perfect must not be the enemy of the good. That is what is happening right now.
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If for any reason the GOP House majority fractures—and the majority is so narrow that those majority-wrecking reasons are going to arrive like the ubiquitous Beltway pollen come April—the second reconciliation will not make it over the line and a massive tax hike will hit every business in America come January 1, 2026.
Small businesses need certainty more than anything. They can’t get certainty about the effectiveness of marketing or the best product mix. But they absolutely need certainty on the tax code. So do retirees looking at withdrawals from their savings. So do mega-cap corporations looking to make enormous investments in manufacturing or data facilities. All of these decisions are on hold until the Congress provides the people it represents with certainty on at least most of the IRS Code.
HOUSE GOP FISCAL HAWKS WARN TRUMP TAX CUTS IN DANGER OF EXPIRING UNDER NEW SENATE-BACKED PLAN
President-elect Trump would be well served by demanding "all of the above" in the first reconciliation. Some Members of Congress are hearing senior Trump advisor Stephen Miller’s demand for immediate legislative action on the border and mistaking that consistent and coherent message for "Only the border matters." Miller is absolutely right to keep pounding on the need to authorize and fully fund completion of the Wall, expansion of the Border Patrol and ICE facilities and authorities —100%.
But Miller is not saying that the president-elect wants only the border and immigration provisions in the first budget-reconciliation package. In addition to the border provisions and the military rebuild, Trump promised extension and revision of his signature tax cuts. He has to deliver on that pledge which in fact unlocks the economic renaissance and productivity gains the country needs to calm inflation, lower interest rates and supercharge genuine economic growth.
The country’s private sector needs certainty on the tax code. As soon as possible, and as much as possible. Trump wants a second Trump boom —the sort of economy he was presiding over before COVID stalled the world for two years.
It’s all right there for the taking, but the Congressional GOP has grown hesitant to demand of itself the discipline to do it all right now. It’s the biggest gamble I’ve seen since Leader McConnell announced that there would be no hearings and no votes on any nominee to replace Justice Scalia after the great man died so unexpectedly in early 2016.
McConnell rightly sensed that the direction of the Supreme Court was a crucial issue, that Americans cared deeply about our fundamental trust in the Constitution as written and amended. McConnell made a big bet, which Trump saw and raised with his release of his list of possible nominees during the 2016 and which Barack Obama wrongly called by nominating Merrick Garland. Trump and McConnell (and the Constitution) won.
Now however the GOP majorities in Congress are sending signals of timidity in the face of enormous opportunity. Senators and Representatives have to focus and execute on gaining an enormous win right now. Not just the border bills. Not just the military rebuild. But the tax cuts and indeed much more.
It’s a rare moment of opportunity for free markets and free peoples. But Congress has to seize the moment and move a big bill—an enormous, game-changing bill. Fortune favors the bold, as will the 2026 elections. Want to keep and grow the GOP majorities? Unleash the American entrepreneur sooner rather than later (or never at all if bad things befall the small majority in the House.)
Trump is going to get his nominees. And he can get everything he demands in the first budget and reconciliation. Here’s hoping that the Transition Team makes time for the President-elect to talk with Speaker Mike Johnson and Senate Majority Leader Thune to spell out his "must haves." Trump the developer will know that opportunities are fleeting. Hopefully he will persuade the GOP to act as though its majority will be gone by April. Because it could be.
The ghost of Jim Jeffords should be haunting both sides of the Hill right now. And if you don’t get that reference, you won’t understand why there is real urgency in the moment.
Hugh Hewitt is host of "The Hugh Hewitt Show," heard weekday mornings 6am to 9am ET on the Salem Radio Network, and simulcast on Salem News Channel. Hugh wakes up America on over 400 affiliates nationwide, and on all the streaming platforms where SNC can be seen. He is a frequent guest on the Fox News Channel’s news roundtable hosted by Bret Baier weekdays at 6pm ET. A son of Ohio and a graduate of Harvard College and the University of Michigan Law School, Hewitt has been a Professor of Law at Chapman University’s Fowler School of Law since 1996 where he teaches Constitutional Law. Hewitt launched his eponymous radio show from Los Angeles in 1990. Hewitt has frequently appeared on every major national news television network, hosted television shows for PBS and MSNBC, written for every major American paper, has authored a dozen books and moderated a score of Republican candidate debates, most recently the November 2023 Republican presidential debate in Miami and four Republican presidential debates in the 2015-16 cycle. Hewitt focuses his radio show and his column on the Constitution, national security, American politics and the Cleveland Browns and Guardians. Hewitt has interviewed tens of thousands of guests from Democrats Hillary Clinton and John Kerry to Republican Presidents George W. Bush and Donald Trump over his 40 years in broadcast, and this column previews the lead story that will drive his radio/ TV show today.