Passing the Big, Beautiful Bill

National Review Online

Monday, May 12, 2025

 

Our friend Yuval Levin likes to say that it’s often impossible to distinguish between legislation that is failing and legislation that, while seeming to fail, is getting banged into something that can pass.

 

The reconciliation bill, the legislative vehicle to cut taxes and make offsetting spending reductions, may be the latter, but it is indeed not easy to tell.

 

It was always going to be important to pass the big, beautiful bill, but it matters more than ever now that Trump has unilaterally raised taxes via his sweeping tariffs. If the bill fails and the 2017 tax cuts aren’t extended, it will be another large-scale tax increase on an economy already buffeted by Trump’s trade wars. This would be an economic and political debacle that would presumably bring Democrats, currently at a low ebb, roaring back in 2026.

 

So, there should be an emphasis on party unity. With the Republican margin in the House so slim, and with so many contested issues packed into one vehicle, though, it’s inevitable that a variety of GOP factions have been threatening to withhold their support and unravel the whole thing. In legislative terms, Speaker Johnson is trying to win a game of Jenga while balancing on one leg on the top rail of the Speaker’s Balcony.

 

If none of this is easy, there are obvious pitfalls Republicans should be avoiding. Raising taxes on high-end earners must remain a nonstarter. This would be bad policy in the best of circumstances, but, as noted above, Trump’s arbitrary taxes on imports have already disrupted the economy. If Republicans were to go down this route, they’d probably have to give up on passing a Republican-only reconciliation bill and court Democrats with a bipartisan budget bill preserving the most politically palatable parts of the 2017 tax cut, while pairing them with comparable spending increases. It would be a big disappointment compared with what Republicans have been promising all year.

 

Trump has been all over the map on a tax increase on upper-income earners, as he has been on much else. Although he’s never going to take this advice, it’d be better if he either laid down exactly what he wants, or stayed out of it and said he’ll sign whatever Congress can pass. Being the most important voice on the legislation and taking ever-shifting positions is a bad combination that makes crafting a no-margin-for-error piece of legislation that much harder.

 

Republicans also need to be willing to say “no” to the moderates in the caucus. They are wrong on the substance — opposing any meaningful restraint on the growth of Medicaid, maintaining funding for Planned Parenthood, seeking as large a SALT deduction as they can get — while, at the same time, they are more vulnerable than their colleagues to the political fallout from a failed bill. It’s not the fiscal hawks, generally from safe seats, who are going to be the first to lose if the party immolates itself in this effort, but the moderates in marginal districts. Besides, if the bill goes down, the taxpayers that moderates are trying to protect with a higher SALT deduction will see their marginal rates increase and a return of the old AMT (which would often negate the SALT deduction).

 

Finally, good policy should matter. The 2017 tax bill was a significant reform, and Republicans should avoid, to the extent possible, vitiating it with political catnip like no taxes on tips and other random Trump inspirations. Although Republicans aren’t going to make significant inroads in addressing deficit spending any time soon, repealing the Inflation Reduction Act and getting Medicaid spending back on its pre-Biden path would be welcome reductions in spending. In addition, it should be a priority to restore the child tax credit to its full strength.

 

Almost every Republican hopes the reconciliation bill is too big to fail. It can’t be discounted, though, that it will prove too big to pass, which should duly focus the mind of any congressional Republican in a competitive district or state next year.