Republicans Are Looting the Treasury While They Still Can
They know a backlash is coming, and they’re making the most of their power while they have it.
By Joshua Holland December 2, 2017
Senate majority leader Mitch McConnell with Senate majority whip John Cornyn, and Senator John Barrasso, talk to reporters, July 25, 2017. (AP Photo / Jacquelyn Martin)
The tax bill Senate Republicans rushed to pass in the dark of night, unread by most senators, was a Hail Mary pass by a party that expects to lose seats in the coming midterms, and knows that its historically unpopular president has a good chance of serving only one term. It was an act of legislative looting by a party that’s behind by an average of eight points in generic congressional ballot polls, doesn’t think it will enjoy unified control of government again in the immediate future, and is grabbing whatever benefits it can for its donors while teeing up deep, damaging cuts to the safety net in the future.
The conventional wisdom holds that Republicans pursued a maximalist approach to the bill because they faced a donors’ revolt if they didn’t deliver something big after Obamacare repeal turned into a debacle, and because they’re insulated to a degree from the wrath of the voters.
This is true. As a result of a combination of gerrymandering and the inefficient distribution of Democratic voters, the GOP might be able to hold on to control of the House despite losing the popular vote by as much as seven or eight points. Next year, Republicans will defend only nine Senate seats, many of them in solidly red states, while their opponents try to hold 25. And conservative donors have threatened to close their wallets if they don’t get big cuts.
But those factors alone don’t explain congressional leaders’ apparent contempt for public opinion. Looking at the bigger picture suggests that they’ve internalized the “emerging Democratic majority” thesis: They know that the electorate is becoming more diverse, more urban, and better educated. They understand that their core demographic—married whites who identify as Christians—is in rapid decline. This is what animates their relentless efforts to suppress the vote of typically Democratic constituencies, and it explains their rush to pass a massive rewrite of the tax code that’s historically unpopular.
As The Atlantic’s Ronald Brownstein noted on Twitter, the Senate bill will come down especially hard on the Dems’ rising coalition: “urban residents, blue states, college and graduate students.… It’s an enemies list as much as a revenue bill.”
Republicans understand that their last two presidents entered office despite losing the popular vote, as they’ve now done in six of the past seven presidential contests dating back to 1988. They get that Donald Trump’s approval ratings are historically low for this stage in a presidency, and that today’s intense partisanship makes it unlikely that he’ll ever enjoy anything even approaching majority support. They know that he’s going to lead them into a 2020 contest in which the Senate map favors the Democrats. And of course they know that Robert Mueller’s investigation is looming over all of this.
They know a backlash is coming, and they’re making the most of the power they have while they still can. They don’t care about public perception if it’s an obstacle to enacting long-term cuts to taxes and spending that will be difficult for future Congresses to reverse.
It’s difficult to overstate how destructive this bill will be over the long term, and impossible to overstate the degree to which their shambolic, one-party legislative process was an affront to the most basic norms of democratic governance.
In order to finance a portion of the $1.4 trillion in tax cuts they’re showering on corporate America over the next 10 years, they eliminate the Affordable Care Act’s (ACA) individual mandate. According to the Congressional Budget Office, this would lead to 4 million Americans’ losing their coverage next year, and 13 million fewer insured in 2027. As healthy people leave the pool, premiums for everyone else in the ACA’s exchanges would spike by 10 percent.
That’s only the beginning. As Amy Goldstein reports for The Washington Post, the bill would have “potent ripple effects” throughout the health-care system. As a result of an existing “pay as you go” law, rising deficits will make automatic budget cuts kick in, unless Congress steps in to stop them, that would reduce funding for Medicare by $25 billion per year. And it’s not just health care—Margot Sanger-Katz reported for The New York Times that if this bill becomes law “the funding for dozens of federal spending programs could be cut—in many cases to nothing—beginning next year.”
Republican senators blithely dismiss this reality, insisting that the bill would unleash sufficient growth to pay for itself. “I’m totally confident this is a revenue-neutral bill,” said Senate majority leader Mitch McConnell (R-KY). “I think it’s going to be a revenue producer.” This is something like confidently stating a belief in the tooth fairy or Santa Claus.
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Congress’s own Joint Committee on Taxation estimates that the bill will drive up deficits by $1 trillion over the next decade. Treasury Secretary Steven Mnuchin promised that his staff would produce an analysis that would support Republican claims that the bill would pay for itself—he said that he had 100 people working on it—but it was never released. The agency’s inspector general is now investigating to determine whether he spiked the analysis because it contradicted his talking points. House majority leader Paul Ryan (R-WI) touted a letter signed by a number of economists who supposedly supported the House bill, but Lee Fang reported for The Intercept that it included signatures by people who don’t exist or who say they never signed anything of the sort, as well as “office assistants, ex-felons and a sprinkling of real economists.” Meanwhile, a survey of 38 academic economists conducted by the University of Chicago’s Initiative on Global Markets found that 37 of them expect the bill to blow up federal deficits, and the 38th “misread the question,” according to The Washington Post.
Given all of that, it should come as no surprise that Republicans didn’t want their sausage making to see the light of day until shortly before the vote. Open hearings, expert testimony, and public discussion of the bill’s provisions were the last thing Mitch McConnell and his colleagues wanted to see.
The process and product are inseparable: It isn’t a bad bill because it was crafted by a small group within the Republican leadership and passed without an opportunity for the public to digest its provisions. They jammed it through because they knew that if it went through anything resembling the Senate’s regular order, it would trigger significant public opposition.
And the truly maddening part is that when Democrats do regain power they typically try to revive the institutional norms that Republicans ignored. They don’t feel that they’re facing demographic headwinds and have to pursue a maximalist agenda. So they hold dozens of hearings and markups on their legislation, and their opponents still claim that it’s being shoved down their throats. See: The Affordable Care Act.
The game is transparent: Republicans claim, despite all evidence to the contrary, that tax cuts will pay for themselves, and when those cuts result in huge deficits, they use them as leverage to force Democrats to accept new spending cuts. That’s precisely what happened under Obama after George W. Bush’s tax cuts blew a giant hole in the federal budget. Lather, rinse, repeat.
But this fight is not over. The House and Senate still need to reconcile their respective bills, and resistance groups are focusing especially on the House, where everyone’s up for reelection in 2018 and the divide between the hardcore members of the “Freedom Caucus” and more pragmatic members may imperil final passage. It’s still worth contacting your representatives.
Joshua Holland is a contributor to The Nation and a fellow at the Nation Institute. He’s also the host of Politics and Reality Radio.