Republicans are already admitting they need to fix their gigantic tax law - but that will be nearly impossible to do
- Republicans passed their massive tax bill at the end of December, setting up major changes to the US tax code.
- Republicans are already admitting that they will need follow-up bills to help correct any implementation issues.
- Democrats may not go along with any attempts at fixing the law, given that the GOP blocked fixes to the Affordable Care Act under President Barack Obama.
The Republican tax bill officially became the law of the land on January 1, when most of the bill's changes to the tax code went into effect.
Most Americans won't notice the major changes until they file their 2018 taxes next year. But the bills' effects will start to become clear in shorter order. And as with any other major bill that makes significant tweaks to the existing system, this law will likely require a series of technical fixes to fix any hiccups that pop up along the way.
"I can't imagine any major undertaking like this that doesn't require technical corrections in the future," GOP Rep. Kevin Brady, the chair of the House Ways and Means committee and author of the House tax bill, told reporters shortly before the bill's passage.
But those expected fixes could be more difficult than Republicans expect. They will need cooperation from Democrats. Having already been on the other side of the coin when Democrats wanted adjustments to the Affordable Care Act, the fraught political environment could complicate the law's implementation and future.
The law's breakneck speed could result in unintended consequences
After passage of the Senate's version of the bill, the preservation of the corporate alternative minimum tax - a parallel tax structure designed to ensure companies don't take too many deductions - led to an uproar from many businesses. They warned it could effectively eliminate beneficial tax credits, such as one for research and development.
Other errors also required fixes during the process. Given the small window between the release of the final conference bill and its passage - less than two weeks - more problems are bound to pop up.
This isn't necessarily uncommon. The Affordable Care Act also needed a series of technical corrections after issues cropped up when it was being implemented. Even the 1986 tax reform bill passed under President Ronald Reagan that GOP leaders laud as a gold standard required follow-up legislation to fix implementation issues.
Democrats could block a corrections bill
Since any bill proposing corrections would go through a regular vote, the legislation would need the support of at least nine Democrats to avoid a filibuster.
Republicans successfully blocked a number of proposed fixes to the ACA, or Obamacare, that could have helped shore up some of the markets. Attempts to fix the tax bill could be no different.
The fight over the tax bill could then end up being deja vu for the GOP. A Democratic leadership aide told The Washington Post that they were "skeptical Dems would bail them out of their mistakes."
"There will be a push for a technical corrections bill addressing issues arising from the GOP's tax reform changes, but the effort will face an uphill climb given Democratic opposition." said Issac Boltansky, an analyst at the policy research firm Compass Point.
Chris Kreuger, a strategist at Cowen Washington Research Group, also pointed to recent legislative examples to cast skepticism on the possibility of a corrections bill.
"Do NOT expect a technical corrections bill on taxes anytime soon. You know what else is waiting for technical corrections legislation that passed along (nearly) purely partisan lines? ObamaCare and Dodd-Frank," Kreuger said in a note to clients.
Democrats have decried the need for a technical corrections bill as proof that the tax bill was shoved through with too much haste.
Sen. Ron Wyden, the top Democrat on the Senate Finance Committee, told Bloomberg that Brady's statement constituted the "ultimate indictment" of the legislation, saying it's "what happens when you move with reckless haste."
A technical corrections bill could open the door up for more fights with lobbyists trying to pressure lawmakers to include small changes or carve outs to benefit their industry.
The existing bill already includes benefits for industries like private plane management, brewing, and oil production.