Tax Law and the Eroding Budget Process

81 LAW & CONTEMP. PROBS. 61 (2018)

Fordham Law Legal Studies Research Paper

37 Pages Posted: 21 May 2018

Date Written: May 18, 2018


Increasingly, political pressures to enact tax legislation impact the budget process, with enduring consequences that sometimes reach beyond tax law. Most recently, partisan conflict over the 2017 tax legislation challenged fundamental aspects of the budget process — such as the length of budget windows, the construction of budget baselines, even the independence of the estimators — in order to fit the law through the requirements of the budget reconciliation process. Ultimately, lawmakers adhered to many of the budget process rules in a formal sense, which could be viewed as demonstrating the resiliency of the process. There is reason, however, to not be so optimistic. The budgetary disputes heavily shaped the contours of the legislation, exacerbating the tendency of lawmakers to disregard long-term fiscal concerns and contributing to revenue losses of $1.9 trillion in the new law’s first ten years. Additionally, the extent to which the 2017 tax legislation challenged the budget process likely has eroded important budget norms, casting doubt upon their staying power going forward. Over time, tax law has impacted budget policy by encouraging the ill-conceived use of reconciliation to ease the passage of revenue-losing legislation, while also creating pressure for Congress to unshackle itself from the budget process. This Article identifies points of instability in the budget process and offers suggestions for improving those areas in light of the new strains placed upon them.

Keywords: tax, tcja, budget process, byrd rule, reconciliation, tax reform

JEL Classification: K1, K34

Suggested Citation

Kysar, Rebecca M., Tax Law and the Eroding Budget Process (May 18, 2018). 81 LAW & CONTEMP. PROBS. 61 (2018), Fordham Law Legal Studies Research Paper, Available at SSRN:

Rebecca M. Kysar (Contact Author)

Fordham University School of Law ( email )

150 West 62nd Street
New York, NY 10023
United States

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