Fiscal fight: GOP Congress vs. Obama

But since the president can veto legislation, GOP leaders probably will try to avoid votes on bills that won’t become law but could damage the party’s image.

Instead, they are likely to use control of Congress to pick a few major battles on spending and pursue priorities capable of gaining bipartisan support and split the Democrats. These include repealing the medical device tax in Obamacare and granting fast-track authority to the president to negotiate trade deals.

Republican leaders have made reversing Obama’s fiscal policies a core feature of their campaigns, making confrontation with the White House likely.

“You could even get a shutdown or a debt ceiling kind of face-off again,” said Stan Collender, an executive vice president at the public relations firm Qorvis/MSLGROUP and a budget expert, noting that conservatives such as Sens. Rand Paul of Kentucky and Ted Cruz of Texas will test Obama.

But Republicans may come away empty-handed because Obama won’t “bend a whole lot. He doesn’t have to,” Collender said.

Republicans say they hope that grabbing the Senate will help them toward their goal of comprehensive tax reform, to lower tax rates while broadening the base by eliminating credits, deductions and loopholes.

“If we get the Senate, it would make things easier, but we still have the president there,” said Rep. Paul Ryan of Wisconsin in an interview last week with the Washington Post. “I tell people that we’re anywhere from one to three years away from getting tax reform,” he added.

As the presumptive chairman of the House Ways and Means Committee and one of the most trusted members within Republican ranks, Ryan would take the lead on tax reform.

He has a strategy for succeeding where the current Ways and Means Committee chairman failed. By gaining control of the Senate, Ryan said in September, the GOP could change the rules to allow the prospects for economic growth to be figured into budgeting. That would mean fewer losers and more winners when credits or deductions are eliminated.

“It’s possible if you make this transparent, the economic effects … then there’s a fighting chance that all of the politicians will have to come to some agreement that this reform is beneficial to the whole economy so we’re going to sign it,” said William McBride, chief economist at the right-leaning Tax Foundation.

But many Republicans and analysts believe there is insufficient common ground or trust between Obama and Republicans to let a tax overhaul go far.

If the GOP Senate passes an overhaul, said Tax Policy Center fellow Howard Gleckman, “in the 2016 election, you know that Democratic candidates are going to say, ‘Republican candidate X proposed taking away your mortgage deduction.’”

“If you’re a Republican, what’s in it for you to get out in front of this issue … when you’re going to get hammered by a Democrat in the next election?” Gleckman asked.

White House officials have signaled that a smaller reform, addressing the corporate tax code, might be feasible in the next Congress. Obama’s economic adviser, Jeff Zients, said in September that past work on business taxes by the House GOP “makes me optimistic that we can get something done.”

But both Ryan and likely Senate Finance Committee Chairman Orrin Hatch are skeptical of doing corporate tax reform separately from an overhaul of the individual tax code.

Instead, GOP senators have said that a likely target would be the medical device tax. Seventy-nine senators, including 34 Democrats, voted to repeal the tax, which is hated by industry, in a symbolic vote last year.

Republicans are also likely to work with Democrats to pass Trade Promotion Authority, which would give the president the power to negotiate trade deals that would then be sent to Congress for a vote without amendments. Democratic leadership blocked the authority, which some of their caucus oppose.

A Senate takeover gives Republicans their first crack at overhauling the 2010 Dodd-Frank financial reform law, which with Obamacare is one of the president’s biggest victories. The GOP wants to revamp some of the hundreds of rules to reduce red tape entangling banks. Under a Senate Banking Committee led by the conservative Richard Shelby of Alabama, Republicans also would ramp up oversight over the the newly created Consumer Financial Protection Bureau.