Why a Republican president could easily pass his or her economic plans.

Here’s How Easy It Would Be for a Republican President to Shred the Safety Net

Here’s How Easy It Would Be for a Republican President to Shred the Safety Net

Moneybox
A blog about business and economics.
Oct. 28 2015 3:24 PM

Here’s How Easy It Would Be for a Republican President to Shred the Safety Net

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They have ideas. And they can probably pass them.

Photo by Sandy Huffaker/Getty Images

Later tonight, the Republican presidential contenders will gather together for their third debate, this time focused on the economy. Presumably, the audience will be treated to a lively discussion about expunging Obamacare, taking a chainsaw to the tax code, and “reforming” the safety net through spending cuts. Given the past five years of congressional gridlock, those watching at home might be tempted to write it all off as doomed campaign rhetoric. But that would be a mistake. If one of the GOP’s candidates actually wins the White House, there is a strong chance he or she will be able to push a large part of such an agenda into law.

Jordan Weissmann Jordan Weissmann

Jordan Weissmann is Slate’s senior business and economics correspondent.

I've written about this point before, but I don't think it can be repeated often enough. In any scenario where voters are willing to elect a Republican president, there is a high probability that the GOP will also retain its total control of Congress. And so long as it has 51 votes in the Senate, the party will be able to pass major spending and tax cuts through the budget reconciliation process, which would prohibit a filibuster from Democrats. In short, if a Republican president wanted to end the welfare state as we know it while dolling out some generous tax cuts, he or she probably could.

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Reconciliation became a controversial subject in 2010, when the Senate used it to pass the Affordable Care Act with fewer than the 60 votes necessary to overcome a Republican filibuster. However, the process has been used to deal with budget matters fairly regularly ever since 1981. Theoretically, it's a tool designed for deficit reduction—it allows Congress to make changes to mandatory spending programs, which include entitlements like Medicare and Medicaid, through a simple majority vote that can't be blocked. But presidents and Congress have wielded the process for a whole variety of ends over the years. Ronald Reagan relied on reconciliation to slash nondefense spending and taxes. George H.W. Bush leaned on it to increase taxes. Bill Clinton's welfare reform legislation also passed through reconciliation, as did George W. Bush's 2001 and 2003 tax cuts.

That history should give you a sense of just how powerful a tool reconciliation could be for a Republican administration looking to shrink the safety net. Medicaid, Medicare, parts of the Affordable Care Act, unemployment benefits, food stamps, school lunches, and more could all be on the table for major changes. We're not just talking about slicing funding levels, either. Reconciliation allows Congress to fundamentally restructure or eliminate programs in the name of saving money, which is why Newt Gingrich and President Clinton were able to eviscerate welfare by transforming it from an open-ended federal commitment to helping the poor into a limited block grant for states. Paul Ryan and other congressional Republicans have talked about taking a similar approach with Medicaid. Likewise, it's conceivable that the GOP could use reconciliation to largely turn Medicare into a voucher for private insurance, as many conservatives would like.

When I asked Bill Hoagland, a longtime Senate Budget Committee staffer now at the Bipartisan Policy Center, what a Republican administration and Congress could accomplish through reconciliation, he told me he thought the results could be similar to the Reagan revolution. “It’s a very powerful tool," he said. “One of the most powerful tools Congress has for effectuating policy.”

The Republican Party wouldn't be able to achieve its entire policy platform through reconciliation alone. The process can't touch Social Security. It can't be applied to discretionary spending programs, which receive new appropriations every year, and include things like defense, transportation, and scientific research. It's also restricted by the so-called Byrd Rule, named after the late West Virginia Sen. Robert Byrd, which requires everything in a reconciliation bill to have an impact on either spending or revenue that's more than "incidental." That means reconciliation can't really be used to legislate regulatory changes, which is especially important when it comes to Obamacare. While a Republican administration might be able to do things like roll back the law's Medicaid expansion or cut its insurance subsidy payments with 51 votes in the Senate, it couldn't repeal and replace the law wholesale, which would require doing things like eliminating the individual mandate to buy health insurance.

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Republicans would also have some difficulty passing permanent tax reductions through reconciliation. The Bush tax cuts were originally designed to expire after 10 years because the Byrd rule doesn't allow reconciliation bills to increase the deficit outside the period covered by the budget. A theoretical Marco Rubio or Donald Trump administration would probably face the same restriction. David Reich, a senior policy consultant at the Center for Budget and Policy Priorities, told me that there are additional (and complicated) Senate rules in place today that might prevent Congress from a passing any tax-cut bill through reconciliation without also including spending cuts to balance the budget effects.*

But somehow I doubt that would bother many members of the modern GOP. With the possible exception of Donald Trump (whose policy positions are tad ... oblique) the Republican candidates are campaigning for the privilege of cutting America's taxes and its safety net. With the House and a bare majority of the Senate behind them, they shouldn't have a problem making good on their promises.

*Correction, Oct. 28, 2014: This post originally misidentified David Reich as Bill Reich.