Robert Robb

opinion columnist

After the failure to repeal and replace Obamacare, the Trump administration and congressional Republicans said they would try to fast-track tax reform.

That would be a mistake. Washington Republicans are no more ready to take on a major tax overhaul than they were on health care. Instead, the focus for the next several months should be avoiding a government shutdown.

House Republicans have the only tax reform plan in town worthy of the name. The plan Donald Trump ran on was concocted in Neverland. It was untethered to fiscal reality.

There are many solid ideas in the House blueprint. But there is one real stinker at the heart of it.

House plan isn't ready for primetime

For corporations, the House blueprint would disallow deductions for imports and not tax profits from exports.

That obviously would dramatically increase the cost of many consumer goods. Not to worry, coo the supporters of what has been dubbed a border-adjustment tax. The value of the dollar will increase by exactly the same amount as the increased price of imported goods.

So, the purchasing power of Americans wouldn’t actually go down. All that would happen is that foreign producers will indirectly pay the federal government beaucoup bucks through the nominal higher taxes of their American purchasers. The House blueprint uses that windfall to partially pay for a reduction in the corporate income tax rate, supposedly rendering the entire package revenue-neutral.

SENATOR:Border-adjustment tax is a gamble

This belief in an automated, mechanical adjustment in the value of the dollar is misplaced. The relative value of the dollar is determined by the supply and demand for it and all other currencies, which is influenced by an infinite number of factors. The border-adjustment tax wouldn’t be imposed in a sterile lab.

But even if, for one of the few times in human history, the border-adjustment tax worked precisely as economists predicted, it would still be a bum idea. It would still disadvantage foreign suppliers compared to domestic ones.

This results in inefficiencies and malinvestment. In that regard, it functions just like a tariff.

If the United States no longer believes in free trade and wants to adopt protectionism, it should do so honestly, not camouflaged as part of tax reform.

In short, the House corporate income tax reform ain’t ready for primetime, and currently it’s the only game in town.

What a shutdown would cost the GOP

In the meantime, Republicans have a lot of decisions to make to avoid a government shutdown, which would be both stupid and severely damaging politically. If Republicans, in control of the presidency and both chambers of Congress, can’t at least keep the lights on, that would be pretty pathetic.

Yet, today, my bet would be that they can’t.

Right now, the federal government is operating on yet another continuing resolution, not a proper budget. This one runs out April 28. Something needs to pass by then to get the federal government to the end of the fiscal year, which is September.

ROBB:Trump's budget is a breath of fresh air

GABRIEL:The four-letter word in Trump's budget (debt)

Then, some kind of spending authorization needs to pass to enable the government to operate when the new fiscal year begins in October. Ideally, it would be an actual budget for the entire year. But I think Congress has forgotten what such a thing is. At present, there’s no indication one is in the works.

Meanwhile, the federal government’s borrowing cap was hit in March. Through financial maneuvers that would land corporate execs in the hoosegow, checks won’t start bouncing until October. But the debt ceiling has to be increased by then.

Don't expect a bailout from Dems

Republicans believe that Democrats will help bail them out of all this. That Democrats will supply the votes if an insufficient number of congressional Republicans are willing to support an increase in the debt ceiling or a spending authorization.

At the same time, Republicans believe they can still cram through stuff Democrats hate – such as defunding Planned Parenthood or easing up on financial market regulation – through budget reconciliation.

I confess that my crystal ball has been malfunctioning lately. But I don’t think that’s going to happen. The price of Democratic support for avoiding a government shutdown is likely to be steep and difficult for Republicans to accept.

Tax reform, repealing and replacing Obamacare, and other elements of the Republican agenda are quite worthy of legislative deliberation in due course. But right now, Republicans need to figure out a way to keep the lights on.

Reach Robb at robert.robb@arizonarepublic.com.