The Chairman’s Report December 3, 2021

BUDGET RECONCILIATION AND WHY IT MAY HELP PASS THE FAIRTAX

To become law, the FAIRtax will need to pass by a majority vote in the House of Representatives, by a majority vote in the Senate and then be signed by the President.  However, passing legislation in the Senate often requires more than a simple majority of 51 Senators in favor of a bill.

In the Senate, it is not uncommon for debate on a bill to go on indefinitely effectively preventing it from coming up for a vote.  This is the filibuster you often hear about in the news.  Senate Rule 22 requires 60 votes to end a filibuster on a measure and bring it to a vote.  The official name for this action is cloture.

Of course, if some Senators wanted to change Rule 22, they would have to debate the issue.  Other Senate rules require 67 votes to end the debate (filibuster) on changing a Senate Rule.

These rules have not stopped the Senate from carving out exceptions.   In 2013 and 2017, the Senate made exceptions that disallowed filibusters on nominations to Executive Branch offices and confirmation of Federal judges.  In those cases, a nominee needs just a simple majority of 51 votes, not 60.

There is also an exception to the 60-vote cloture rule called Budget Reconciliation.  In that case, all it takes is a simple majority, 51 votes, to end debate and  bring a measure up for a vote. In today’s equally divided Senate, if all 50 Democrats voted to end debate and all 50 Republicans voted to continue, Vice President Harris would cast the deciding vote to end debate and allow the bill to be brought up for a vote.

WHAT IS BUDGET RECONCILIATION

The Congressional Research Service has prepared a report entitled, The Budget Reconciliation Process: The Senate's "Byrd Rule".  This report explains:

• Reconciliation is a process established under Section 310 of the Congressional Budget Act of 1974 (PL. 93-344, as amended)
• The purpose of reconciliation is to change substantive law so that revenue and mandatory spending levels are brought into line with budget resolution policies.
• Reconciliation has generally been used to reduce the deficit through spending reductions or revenue increases, or a combination of the two.
• Reconciliation is a two-step process. Under the first step, reconciliation instructions are included in the budget resolution, directing one or more committees in each House to develop legislation that changes spending or revenues (or both) by the amounts specified in the budget resolution.
• Under the second step, the omnibus budget reconciliation measure is considered in the House and Senate under expedited procedures (for example, debate time in the Senate on a reconciliation measure is limited to 20 hours and amendments must be germane to the proposed bill). The process culminates with enactment of the measure, thus putting the policies of the budget resolution into effect.
• Reconciliation is an optional procedure but has been used 22 times since 1980.
• Because there were attempts to add provisions to the Reconciliation bill that did not directly apply to budget resolution issues in 1985 and 1986, the Senate adopted the Byrd rule (named after its principal sponsor, Senator Robert C. Byrd) as a means of curbing these practices.
• The Byrd Rule contains (1) a provision in statute applying to initial Senate consideration of reconciliation measures, and (2) a Senate resolution extending application of portions of the statutory provision to conference reports and amendments between the two houses.
• Senator Byrd explained that the basic purposes of the amendment were to protect the effectiveness of the reconciliation process (by excluding extraneous matter that often provoked controversy without aiding deficit reduction efforts) and to preserve the deliberative character of the Senate (by excluding from consideration under expedited procedures legislative matters not central to deficit reduction that should be debated under regular procedures).
• A Senator opposed to the inclusion of extraneous matter in reconciliation legislation has two principal options for dealing with the issue. First, a Senator may offer an amendment (or a motion to recommit the measure with instructions) that strikes such provisions from the legislation. Second, under the Byrd rule, a Senator may raise a point of order against the extraneous matter.
• To overcome a point of order motion labeling a portion of the reconciliation bill as extraneous, 60 Senators must agree.
• Extraneous matters are then required to be submitted in a new bill which requires the normal Senate Rules—60 votes to end debate on a bill—cloture.
• A provision is considered to be extraneous if it falls under one or more of the following six definitions:

PARLIAMENTARIAN OF THE UNITED STATES SENATE

The Parliamentarian of the Senate is an advisor to the Senate.  The parliamentarian advises on any question dealing with the interpretation of the Standing Rules of the Senate.  Elizabeth MacDonough was appointed Parliamentarian in 2012 by then Senate Majority Leader Harry Reid.
Two immigration bills were removed from the House bill because the Parliamentarian advised that they were “extraneous.”  A number of other proposals by Members of the House were not included because it was clear that they were extraneous.

THE FAIRTAX AND BUDGET RECONCILIATION

Some opponents of the FAIRtax say that 218 Members of the House may vote for the legislation.  However, they cite the need to get 60 Senators to agree to end debate on the measure in the Senate before it can be brought up for a vote.  They believe that in our divided country at least 41 Senators will oppose ending debate effectively killing the FAIRtax.

Even if there are 41 Senators who oppose the FAIRtax, the budget reconciliation process will allow the Senate to pass the FAIRtax with only 51 votes.  This was how the 2017 tax reform legislation was passed.

Again, the purpose of reconciliation is to change substantive law so that revenue and mandatory spending levels are brought into line with budget resolution policies.

Eliminating the income/payroll tax system and replacing it with the FAIRtax will dramatically reduce evasion which will bring in more revenue, but will also reduce federal expenses.  By eliminating the IRS, the FAIRtax will save the government billions of dollars every year.  This will bring into line revenue and mandatory spending levels and allow the budget to be balanced.

CONCLUSION

If current trends hold, the Republicans should regain control of both the House and Senate in the 2022 midterm elections.  While it is unlikely that President Biden would sign the FAIRtax legislation if Congress passed it, things could be different if the Republicans hold the House and Senate in the 2024 elections, and a Republican President is inaugurated in January of 2025.

As Martin Luther King, Jr. said, We must accept finite disappointment, but never lose infinite hope.

The FAIRtax can make a dramatic impact on all of our lives for the good.  We can TAKE BACK CONTROL OF OUR LIVES!

Since we still have elections, we have the ability to elect federal representatives who will replace the complex income/payroll tax system with the FAIRtax.

We just need to keep pointing out the insanity of the complex income tax and the benefits of the FAIRtax to everyone.  Our friends and neighbors who we need to vote with us for a sane system of taxation just need to be informed.

WHAT CAN EACH OF US DO?

We can write letters and make calls to our elected representatives demanding that if the government really wants to eliminate the burden of filing income tax returns, they should enact the FAIRtax and do away with tax returns altogether.

The great 18th century Irish statesman Edmund Burke made a statement that applies in many ways,

“Nobody made a greater mistake than he who did nothing because he could do only a little.”

If you want to prevent the IRS from being further weaponized to punish those of us who may object to the D.C. opinions and dictates of what is good for us, then help us PASS THE FAIRTAX!

The IRS will be gone and we will pay our taxes when we make purchases.  WE and not D.C. Elites will decide how much federal tax we pay!

If you have friends who don’t know about the FAIRtax, send them to FAIRtax.org.  Have them watch the white boards under “How It Works” and, if they agree, ask them to please join us.

Then contact your Members of Congress and the President and demand that Congress pass -the FAIRtax—the only fair tax.

Remember, if we don't continue to tell the truth and demand a change, then this quote from George Orwell's 1984 may foretell our children's future:

“If you want a picture of the future, imagine a boot stamping on a human face—forever.”

Is it hopeless?  When confronted with a seemingly impossible problem, remember the statement attributed to the author George Bernard Shaw who wrote, You see things; and you say “Why?”  But I dream things that never were; and I say “Why not?”

Isn’t it time for us to ask, “Why not?”

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