Taxes and spending: What happens if Republicans win the Senate

The nerd science of political campaigns
The nerd science of political campaigns

There's a chance Election Day brings a Republican takeover of Congress, with the party gaining control of the Senate while preserving its hold on the House.

That would put Republicans in the lead on key budget issues that have been the source of hair-raising drama in the past few years: taxes, spending and the debt ceiling.

What then?

CNNMoney asked seasoned political and policy analysts to give their take.

The most likely scenario, they say, is that Republicans will end up acting more centrist-right than Tea Party-right.

First, they know the next presidential election is right around the corner.

Remember last year's government shutdown -- forced by far right lawmakers and disparaged by Republican leaders?

"The GOP has to show they'll govern and get things done ahead of 2016 to better compete with Hillary Clinton," said Greg Valliere, chief political strategist of the Potomac Research Group.

Second, any Republican majority in the Senate could be slim, falling short of the 60 votes needed to prevent filibusters on key bills.

"If they put forth really radical legislation, the Democrats will have a blocking minority," said Corey Boles, senior U.S. analyst for Eurasia Group.

Related: CNN coverage of the 2014 midterm elections

Taxes: Republicans have been calling for tax reform every chance they get, as have Democrats. But that doesn't mean much.

"The odds of successful tax reform next year are incredibly low," Chris Krueger, a policy analyst at Guggenheim Partners, wrote in a research note.

Eurasia Group analysts agree, but think if there's any chance for it, it's slightly better under a Republican-controlled Congress.

No one believes both individual and corporate tax reform would get done in the next year or two.

But if there's any at all, odds favor corporate tax reform. This despite the fact that tax experts think it's ill-advised to do so on its own, since it won't account for the large partnerships and other business entities that file under the individual income tax code.

Politically it might be dicey too, said William Hoagland, senior vice president of the Bipartisan Policy Center and formerly a top Republican staffer on the Senate Budget Committee for years. That's because Republicans would like to lower tax rates for U.S. corporations, which voters may see as giving a break to big business but not average Americans.

Spending: Come mid-December, the current crop of lawmakers will need to reauthorize spending to avoid a government shutdown. Everyone expects them to do so.

The question is for how long. If they do it through the end of fiscal year 2015, which ends September 30, that "would signal a continued freeze on the budget wars," Krueger said.

But if it's only for a few months, and the Republicans come back as the Senate majority in January, that may "signify the return of governing-by-crisis," he said.

In either case, Congress will also have to pass a budget for fiscal year 2016, which starts next October.

So lawmakers will have to decide what to do about the statutory spending caps imposed by the 2011 budget deal.

"The caps are very, very tight," Hoagland said.

But there likely will be bipartisan pressure to lift them as demands grow to address the wars in the Middle East and to contain Ebola, among other crises, he noted.

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Debt ceiling: The 2011 fight over the debt ceiling -- which sets a cap on the nation's borrowing limit -- brought the country to the edge of default, shook markets and earned the United States its first credit downgrade from Standard & Poor's.

It also yielded the deal that created the spending caps and the broad budget cuts known as the sequester.

Since then, lawmakers have gone to the mat several times as subsequent short-term compromises to raise or suspend the debt ceiling faced expiration.

The latest such compromise suspended the borrowing limit until March 15, 2015. But because of "extraordinary" measures that Treasury can take to keep the country's borrowing below the ceiling, lawmakers likely will have until June or July to settle the issue.

In recent years, some conservative Republicans demanded spending cuts that match or exceed any increase to the borrowing limit.

But as the majority party, Republicans may not want to take it so far, especially since it will be nearly impossible to come up with enough palatable cuts.

Yes, they may still demand something from President Obama in exchange for raising the limit, but it's likely to be much less than a dollar-for-dollar offset, Hoagland said.

And Obama may be pressured to go along if it is presented to him in a so-called budget reconciliation bill, which only requires 51 votes to pass.

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