Doug Jones' win in Alabama is going to add jet fuel to the GOP's tax bill push

• Democrat Doug Jones' win in the Alabama Senate special election gives the GOP an even narrower margin in the Senate.
• Jones will not join the Senate for a few more weeks, giving Republicans just enough time to pass their tax bill.
• Given the time constraint, the Republican Party could likely compromise on many issues in order to get the bill done before Christmas.

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Democrat Doug Jones' upset victory in Alabama on Tuesday doesn't look likely to stop the GOP from scoring their first major legislative win of Donald Trump's presidency.

Jones' win sends shockwaves through Capitol Hill. But it can do little to prevent the GOP from passing their massive tax overhaul. Republicans still hold a narrow margin in the Senate and have a window of a few weeks to fit in the votes on the bill, the Tax Cuts and Jobs Act (TCJA).

"The Doug Jones victory in Alabama should serve as the final nail in the coffin of the tax reform bear thesis," said Isaac Boltansky, a policy analyst at the research firm Compass Point. "This electoral defeat will bolster the already gale force tailwind behind the GOP's tax reform effort."

Sen. John Thune, the No. 3-ranking Republican in the Senate, said final votes on the tax bill were unlikely to be delayed because of the Alabama results.

The TCJA currently sits in a conference committee, made up mostly of members from the tax-writing committees from the House and Senate, designed to reconcile the discrepancies in the differing versions of the bill that passed the two chambers.

The Republican conferees on the committee have been working to bridge intraparty divides on issues ranging from the state and local tax deduction to the size of the corporate tax cut. Given the possible changes, a few Republican members in the House and Senate have expressed concerns over possible changes to the bill.

Addressing those concerns quickly will be the key to getting the TCJA through Congress. A final bill could come as soon as Wednesday, when the conference committee holds its first public meeting.

The Senate is the sore spot

The GOP holds a 52-48 advantage in the Senate for a few more weeks. The Alabama election results will not be certified until some time between December 27 and January 3, according to the Alabama Secretary of state's office.

Democrats are set to raise a ruckus about waiting for Jones to be seated before a final vote on the bill, but there is nothing much the party can do in legislative channels to slow the TCJA's progress. The real question comes down to just how many Republicans defect on the final vote.

The timeframe for Jones to join the Senate gives Republicans leaders a bit of a cushion, but not much. The loss in Alabama will likely light a fire under the GOP to make compromises on various parts of the bill, said Greg Valliere, chief strategist at Horizon Investments.

"The GOP's Senate margin will shrink to 51-49 by early January; Democrat Doug Jones will be seated a couple days into the new year," Valliere wrote in a note to clients on Wednesday. "Republican tax conferees - already worried about defections from Susan Collins, Bob Corker or even Marco Rubio - can't afford to wait until Jones is seated; they need to pass the tax bill soon."

Corker, of Tennessee, voted against the first version of the Senate tax bill due to the large amount of federal debt it is projected to add. Collins has raised concerns over proposed changes to the healthcare system the bill would make.

If the GOP lets the tax reform push slip into the new year, after Jones is seated, that could seriously imperil the bill's future. But if the bill is done over the next two weeks, the party could afford to lose both Corker and Collins since Vice President Mike Pence could break any tie in the Senate.

Given the pressure, the conferees are expected to roll out the final compromise bill by Friday at the latest, with votes coming in the two chambers early next week. That timeline would get the TCJA to Trump's desk just in time.

"There are still potential snags but the most likely scenario is that Trump signs the measure by the middle of next week - not a moment too soon, as the climate is about to worsen for the GOP in Congress," Valliere said.