Going into Tuesday night, control of the Senate was in play with as many as eight Republican seats tagged as likely to flip, compared to just one for Democrats. Ultimately, Republicans held onto their majority, but the Democrats picked up seats in Illinois and New Hampshire.
What will be the focus of the next Senate? During the election season, NTUF analyzed the annual costs of the candidates' agendas in five key Senate races that may give some indications on the priorities of the Senators-elect. The table below summarizes the findings of how the race winners may spend your tax dollars:
| State | Senator-Elect | Net Spending Agenda |
|---|---|---|
| Colorado | Michael Bennet (D) | $52.5 Billion |
| Florida | Marco Rubio (R) | -$81.8 Billion |
| North Carolina | Richard Burr (R) | -$87 Billion |
| Pennsylvania | Pat Toomey (R) | -$89.4 Billion |
| New Hampshire | Maggie Hassan (D) | $63.3 Billion |
NTUF tracked 208 fiscal proposals offered by the candidates in the five races we examined. There are several overlapping policy areas where the newly elected or re-elected Republican Senators are aligned:
Health Care
Repeal the Affordable Care Act (ACA): Proposals included a full repeal or at least significant portions of the law such as the individual/employer mandates, expansion of Medicaid, and medical device and “Cadillac” taxes on high-cost insurance plans). Complete repeal would reduce outlays by $470 billion over five years.
Replace the Affordable Care Act: While it is unclear what will ultimately be included in a package to replace the ACA, the Center for Health and Economy analyzed a detailed ACA replacement plan in 2014 and estimated it would reduce deficits by $1.13 trillion over ten years. On the campaign trail, the Republicans promoted several options including:
Allowing health insurance to be purchased across state boundaries, which, based on a pre-ACA estimate, would cost $38 million per year (inflation adjusted).
Expanding access to Health Savings Accounts could result in new spending if “refundable” tax credits are used to incentivize low-income workers to establish them.
Government Reform
Tax Simplification: Depending on the final details of the reforms, replacing the current Tax Code with a flat income and corporate tax could lead to savings in the IRS’s $4.9 billion enforcement budget.
Regulatory Reform: Several proposals with indeterminate budget costs were put forward on the campaign trail, including:
Establishing a National Regulatory Budget to would require Congress to set a maximum amount of economic costs that could be imposed through federal regulations per year.
Enacting the Regulations From the Executive in Need of Scrutiny (REINS) Act, requiring Congress to hold an up or down vote on any proposed federal regulation with an economic cost of $100 million or more.
Federal Workforce Attrition: This plan would reduce the size of the federal bureaucracy by hiring only one new employee for every three that retire, saving $3.7 billion per year.
The Senate candidates’ proposals listed above overlap with President-Elect Trump’s campaign promises. In addition, the calls to increase border security supported by Trump, Rubio, and other re-elected incumbents could cost at least $12 billion based on the Congressional Budget Office’s estimate of the Senate’s 2013 comprehensive immigration reform bill. It is also likely that the defense sequester cuts will be revisited. This budget reform that was enacted in the Bipartisan Budget Act of 2015 is currently scheduled to reduce outlays on military programs by $54 billion from FY 2018 through 2021. Infrastructure will be another “big ticket” item taxpayers can expect to see debated in the Senate, and will likely be tied to a plan for corporate tax reform that incentivizes businesses to repatriate earnings currently held abroad to avoid double taxation.
More work remains to be done to offset the new spending on the table and prepare for the looming budget reality, which will be detailed in a forthcoming post.