Political News

Republicans just bet the entire 2018 election on an unpopular tax plan

Posted December 2, 2017 9:02 a.m. EST

— While you were sleeping, Senate Republicans passed President Donald Trump's tax plan. And, in so doing, they gambled the entire 2018 election on it.

The vote -- 51 to 49 -- was a party line one. (Tennessee GOP Sen. Bob Corker was the only rebel, voting "no" due to his unhappiness with the $1 trillion the bill is predicted to add to the deficit.)

From the start, there was never an expectation that any Democrats would sign on -- despite the fact that 10 Democratic senators up in 2018 represent states that Trump carried in 2016. Democrats viewed the bill as a giveaway to big corporations and a tax increase on lots and lots of Americans. And because of the unpopularity of both the bill and Trump, they felt very little political pressure to get on board -- or even feint at the idea that they might.

In spite of that, Republicans managed to pass the bill, avoiding a repeat of the twin debacles over the spring and summer when the party twice tried and failed to repeal and replace the Affordable Care Act.

What changed? To hear Republicans explain it: Necessity.

"I think all of us realize that if we fail on taxes, that's the end of the Republican Party's governing majority in 2018," said South Carolina Republican Sen. Lindsey Graham on Fox News Radio in late October. "We'll lose the House, probably lose ground in the Senate."

Graham's thinking goes like this: Republicans -- led by Trump -- were elected in 2016 to accomplish conservative priorities. To date, they haven't done a very good job -- outside of the confirmation of Supreme Court Justice Neil Gorsuch. Obamacare is still the law of the land. The wall isn't built.

Given that track record, to fail on a tax cut -- the core-ist of core principles of conservatism is lower taxes -- would have, in Graham's view, been a death blow to Republicans. An already irritable party base would have walked away from the GOP in the 2018 midterms. And a party without an activated base -- especially given that Democrats have already shown in the 2017 elections that their base in hugely energized -- would have lead to broad-scale losses in Congress next November.

Now -- assuming Republicans can get the bill through a conference committee and passed in the House and Senate again -- every Republican House member and senator can go back to the GOP base and brag that they passed a massive tax cut through Congress. It's a tangible "something," which is what Republicans believed they needed. To go back to voters open-handed wasn't an option.

That desperation born of necessity is what made the process to passage so messy, with the bill literally being written and re-written while votes on it were happening. You can be certain that there isn't a single Republican senator who knows every little thing in the bill; no one could given the time frame on which it was considered in committee then brought to the floor for votes.

Obviously, when you rush a massive overhaul of the tax system through Congress, you are taking a risk. But there are even more warning signs for Republicans that reveal what a huge gamble they took in passing this bill.

First is the fact that independent analysts have concluded that this bill would add roughly $1.4 trillion to the deficit, according to estimates made by the Congressional Budget Office. In the Republican party as recently as 2010, that would have been considered an absolute non-starter. Pre-Trump, lowering the deficit by curtailing government spending was a central, unwavering principle of conservatism.

In 2013, now-Speaker Paul Ryan warned that the country's burgeoning deficit would "weigh the country down like an anchor," adding: "We are on the verge of a debt crisis." So committed were Republicans to reducing the deficit, they mandated automatic budget cuts -- known as sequestration -- to force the bureaucracy's hand.

What changed? To hear Republicans tell it, increasing the deficit to cut taxes isn't like increasing the deficit to spend on other government programs. Why? Because providing tax cuts will spur the economy to previously unforeseen levels of growth that will wipe out our deficit -- including the more than $1 trillion this bill will add to it.

The problem with that logic is that the Joint Committee on Taxation, in a report on the Senate bill, suggests it's decidedly pie in the sky. On Thursday, just 36 hours before the Senate passed the bill, the JCT predicted that the gross domestic product would increase by only .8% over 10 years as a result of the tax legislation. That's well short of the 3-5% GDP growth predicted by the most optimistic conservatives and means, in simple terms, that the tax plan would not pay for itself -- or even come close.

The second warning sign for Republicans on this tax bill is that the public doesn't like it much. A majority (52%) in a Quinnipiac University poll conducted in the middle of November disapproved of the plan, while just 25% approved. More than six in 10 surveyed said that wealthy people would benefit most from the tax plan while less than one in five (16%) said it will reduce their taxes. Other polls on the tax legislation show similar results.

There is an argument to be made -- and it will be made by Republicans -- that people don't really know what's in this bill, and once they find out, they will change their minds. Possible. But not probable. That same argument was put forward by the Obama White House and Congressional Democrats about the ACA; the legislation caused huge Democratic losses in the House and Senate in 2010 and 2014 before it finally began to grow more popular this year, when Republicans tried to get rid of it. That's a stiff price to pay.

What Republicans passed in the wee hours of Saturday morning then was this: An unpopular bill that will add to the deficit and not pay for itself.

On its face, that looks like a political loser. And it might be! But Republicans, backed into a corner by their own inability to get on the same page on other conservative agenda items, felt as though they had no choice in the matter. They needed to pass something to appease their base and this tax plan was the last, best option. (Worth noting: six in 10 Republicans in that Quinnipiac poll approved of the GOP tax plan.)

Any Republican strategist worth their title has to understand just how much of a risky gamble approving this tax plan represents. Any time public opinion runs two to one against something you just voted for, that's a dicey political proposition -- to say the least.

In passing this bill, Republicans are living the words of renowned political philosopher Janis Joplin: "Freedom's just another word for nothing left to lose."