It’s certainly a possibility that tax reform won’t be accomplished this year. That’s ironic, because I believe Republicans are desperate to get something done after the fiasco of seven years of unsuccessfully preparing to repeal and replace Obamacare.
Of course, one thing we know is that Congress never truly debated or even thought about repeal and replace for the past seven years. Their words were nothing more than talking points to continue to win elections. If tax reform does not get done by the end of this year, it’s not the end of the world. But, whether it’s 2017 or 2018, failure to pass it could signal the end of the Republican Party as we know it.
Many people think the markets have some of this probable inaction factored in, and they haven’t really moved on the idea that tax reform must get done this year. By the way, that should give us some comfort as we watch recovery happening in the economy through, for example, GDP growth like we haven’t seen in years and strong job growth. It would appear this is a real recovery, not economic growth because of something that might happen or something the government has artificially created.
Certainly, the relief of regulatory burdens in many areas has helped economic growth. We can thank President Donald Trump for his commitment on that. This, of course, is something he didn’t have to run by Republicans.
The consensus seems to be that as long as tax reform and an infrastructure program are adopted in 2018, everything will be fine. I must admit, I was concerned about tax reform getting done by September of this year, believing that the economy would take a step backward if that was not the case. Yet the economy seems to be unaffected and continuing to show confidence and expansion.
However, there is a problem with that scenario. If there is no will or ability in Washington to pass tax reform and infrastructure this year, what exactly will happen after January 1 that will put everyone on the same page?
One might think, “Surely Republicans will complete tax reform and infrastructure bills before they start campaigning for reelection.” Maybe not. This goes back to an article I wrote last week, indicating that in order for the will in Washington to magically appear for the good of Americans, we the people must speak loud and clear before the November elections.
As I travel about the country, I have met very few people who have any confidence in the Republican Party or its leaders. I believe the likelihood of them getting anything done is slim to none.
Of course, there’s always the possibility that the president may be able to do something on a limited basis through executive orders. However, when it comes to tax reform, that obviously would not be best for future generations. It must be permanently in place so another president can’t erase Trump’s efforts. Congressional progress is critically important for economic stability.
Let’s equate this scenario to a family. How many dysfunctional families do you know who, through one little move, fixed all their problems and immediately became as functional as the perfect family next door? There’s not much difference between an American family with issues of its own and the utter dysfunction on Capitol Hill.
The idea that suddenly there will be some sort of a wake-up call is a stretch. We’d all like to dream of congressional leaders suddenly and magically deciding that Congress should actually be a functional body of the government—that they would do what is right for the American people, create jobs, allow the economy to thrive, incentivize corporate America to want to grow and prosper, and bring people back into the workforce because they see opportunity.
Wouldn’t it be wonderful to see under-employed and poorly paid people come back into the workforce? To see Congress suddenly instill the notion that the American dream and opportunities for prosperity are alive and well?
Yes, it would. But if there is any reason for concern about a tax reform bill being passed in 2018, it’s because of what we’ve learned watching the past eight years of Capitol Hill dysfunction.
(Dan Celia is president and CEO of Financial Issues Stewardship Ministries, Inc., and host of the nationally syndicated radio and television program “Financial Issues,” heard daily on more than 630 stations across the country and reaching millions of households on the National Religious Broadcasters Network, BizTV, Dove-TV and others. Visit www.financialissues.org.)