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Compared to 1986, partisanship will test today’s GOP on tax cuts

Democratic and Republican lawmakers joined President Reagan when he signed tax overhaul legislation in 1986.
Associated Press/file
Democratic and Republican lawmakers joined President Reagan when he signed tax overhaul legislation in 1986.

WASHINGTON — It all seems so quaint, by today’s standards.

Washington’s most powerful tax policy officials — Democrats and Republicans, from both Congress and the executive branch — got together to hammer out what would become a historic tax reform law.

The year was 1986, and Ronald Reagan was in the White House, working with Congress to forge a grand compromise that had been deliberated over for two years.

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“It was clearly destined to be bipartisan. The committee chairman and others insisted on it,” recalled former senator Byron Dorgan, a North Dakota Democrat who was on the House Ways and Means Committee in those days.

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Fast forward three decades, and the most significant tax rewrite since that landmark overhaul is embroiled in partisan squabbles, cloaked in secrecy, and, when it finally becomes public this week, set to be crammed into a tight two-month schedule that will allow for minimal formal debate.

The strategy of trying to limit the window for public criticism and internal GOP dissension could be a recipe for triumph for the Republican triumvirate of President Trump, House Speaker Paul Ryan, and Senate majority leader Mitch McConnell.

Or it could just as easily become a full-blown disaster.

Many observers remain skeptical that Republicans can pull it all off, given the playbook they’re using. The House and Senate are both aiming to wrap up the exceedingly complex legislation by Thanksgiving and to reconcile differences by around Christmas. Some see the makings of another failure like the GOP’s inability to pass a repeal-and-replace of the Affordable Care Act.

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“It’s ‘Mission Impossible’ morphing into ‘[the] Gong Show,’” said David Stockman, who served as Reagan’s budget director from 1981 to 1985. “This is going to be a bloodletting before it’s over.”

Republicans say they’ll deliver a tax bill to Trump’s desk by the end of the year that will cut taxes so aggressively it will fundamentally transform the American economy by spurring companies to invest more in domestic production.

“Across the spectrum this is going to change behavior . . . in a way that encourages more job creation and economic growth,’’ Ohio Senator Rob Portman said Sunday on NBC’s “Meet the Press.’’

Yet the first legislative text won’t be seen until this week, when the Republican leadership of the House Ways and Means Committee unveils a draft of what it has been writing for months with private input from corporations and special interest groups. That leaves rank-and-file lawmakers of both parties, not to mention the American public, just a few weeks to digest a sweeping tax-code rewrite that could touch every corner of the US economy.

Republican congressional leaders and the White House last month offered the broad contours of their package but not enough specifics for most Americans to determine if they’re getting a tax cut or a tax hike.

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Key details of the legislation remain under negotiation. GOP leaders have provided little evidence to back up Trump’s claims that the legislation will predominantly benefit middle-class and working Americans, not the rich, who many independent analysts said would reap the biggest rewards, based on the GOP outline.

‘I think they need a victory that they can call their own.’

Representative Richard Neal,  Democrat of Springfield, on Republicans’ push for tax cuts 

Under the aggressive GOP timeline, rank-and-file lawmakers of both parties will not see the actual legislation until Wednesday, after which the House Ways and Means Committee will quickly take up the bill, vote on possible changes, and then send it to the full House.

That text will reveal specific winners and losers on a slew of controversial questions, including whether to change the tax treatment of 401(k) retirement plans, whether to add a fourth top income tax bracket to hit the very richest Americans, and what tax breaks and other goodies to eliminate to pay for the steep cuts to the corporate and personal income tax rates they want to achieve.

Accelerating the timeline and limiting debate is already giving Democrats and dissenting Republicans additional grounds for complaint.

By contrast, the 1986 overhaul effort unfolded over more than two years, was bipartisan from the start, and featured numerous detailed, publicly shared policy proposals and hearings as well as closed-door horse-trading sessions.

Democrats charge that the Republicans are keeping the details secret and the process fast to obscure their true goal: delivering a huge tax cut to their millionaire and billionaire political contributors, at the expense of the middle class.

“The whole process could be over before anybody has put a dent in their holiday shopping, but that’s what the majority is counting on,’’ said Ron Wyden of Oregon, the top Democrat on the Senate Finance Committee, which handles taxes. “They are rushing their tax giveaway to big corporations and the wealthy through the Congress so quickly that nobody catches on.”

Democrats will use what little time they do have as the tax plan barrels down the tracks to offer amendments on policies they say will help the middle class and grow the economy, such as a package of infrastructure spending, said Massachusetts Representative Richard Neal, the top Democrat on the Ways and Means Committee. The amendments — likely to fail — are part of an ongoing strategy by Democrats to contrast their proposals against what they characterize as Republicans’ tax cuts for corporations and the rich.

He said Republicans are making a “mistake” pursuing a tax package without Democratic buy-in. “I think they need a victory that they can call their own,” Neal said about the GOP strategy.

As outlined, the Republican plan would slash the corporate tax rate from 35 to 20 percent and lower rates for business partnerships. On the personal-income side, it would reduce the number of tax brackets from seven to three and cut the top tax rate from 39.6 to 35 percent — though Congress has the option of adding back that fourth bracket at the top.

Republicans have not yet said where they plan to draw the income thresholds for those new tax brackets. Kevin Brady of Texas, the chairman of the House Ways and Means Committee, last week declined to guarantee that every American would see their taxes go down. But he argued that everyone will benefit.

“I can guarantee that every American will be better off because of a simpler, fairer tax code that lowers those rates and improves their paychecks,” he said.

Some rank-and-file Republicans are also unhappy with the speed and secrecy of the process.

“They’re asking people to vote on a budget to expedite a tax bill which no one has seen,” complained New York Representative Peter King after the House voted last week on a budget document — a first step in the tax-cutting plan.

Stockman, the former Reagan budget chief, said a partisan approach makes killing off popular tax breaks politically difficult. In 1986, support from Democratic leaders for closing loopholes and ending tax breaks provided necessary political cover for Reagan. This time around, Republicans are letting Senate minority leader Chuck Schumer and other Democrats “stand on the sidelines doing target practice’’ on individual ideas that get floated out during the so-far secretive process, he said.

“It’s hard for me to take seriously that they want Democrats to participate when they won’t show us the bill,” Missouri Senator Claire McCaskill said on “Meet the Press’’ Sunday. “If we can make this about the middle class and make this not trickle-down [economics] but deliver to the middle class and small businesses, then I think they could get a bipartisan vote on this, and that would be so much better for the country.’’

But that would be so 1986.

Victoria McGrane can be reached at victoria.mcgrane@globe.com. Follow her on Twitter @vgmac.