Two politicians just told the truth about taxes and health care
Posted May 2, 2018 9:22 a.m. EDT
(CNN) — There were two double-take moments involving current and former GOP policymakers this week that cast doubt on some of the party's major accomplishments of the Trump era -- tax cuts and ending the Obamacare individual mandate to have health insurance.
If there are an increasing number of signposts that the economy and the election in 2018 will be difficult for the party that currently controls all of Washington, these are two of the larger ones.
The first came from Republican Sen. Marco Rubio and the subject was the massive tax overhaul that permanently slashed corporate tax rates and temporarily cut rates for individuals.
The law has yet to fully kick in, but Rubio seemed to acknowledge one of the major complaints about it, the permanent benefits of which are weighted to corporations in the hope of growing wages and jobs.
That is factually accurate! The individual cuts expire after 2025. There's just as much fact-checking to do of Democratic claims about the tax law, but what's most interesting about Rubio is that he essentially broke with his party to say what he said. In other words, he did something very un-Washington. He told the truth.
"There is still a lot of thinking on the right that if big corporations are happy, they're going to take the money they're saving and reinvest it in American workers," Rubio told the Economist. "In fact they bought back shares, a few gave out bonuses; there's no evidence whatsoever that the money's been massively poured back into the American worker."
(Note: In arguing for passage of the bill, Republicans were very careful to emphasize the benefits to individuals over corporations even though the rate cut for corporations was much larger -- several percentage points for most individuals but 14 percentage points for corporations.)
Rubio's quote could have come from a Democratic press release attacking the bill. In fact, Democrats quickly inserted it into press releases, which led Rubio to clarify himself without ceding his larger point in a National Review op-ed Wednesday in which he argued argued "on the whole, the tax cut bill helps workers. It's just not massive tax cuts to multinational corporations that do it."
The second Republican to throw kerosene on current GOP orthodoxy was former HHS Secretary Tom Price, who suffered the twin embarrassments of a private plane scandal and, probably more importantly, the failure of Republicans to follow through on their many, many, many promises to repeal Obamacare. It was the planes that cost him his job.
After Price left -- and as part of that tax law -- they did zero out the penalty Americans would have to pay for not obtaining health insurance. President Donald Trump has declared that move the death knell for Obamacare and the sign of better things to come.
"The individual mandate essentially wipes it out, so I think we may be better off," Trump said at the conservative CPAC conference in February. "And people are getting great healthcare plans and we're not finished yet."
He's pledged to dismantle the law piece by piece.
Price, who was once in charge of those efforts, said at a health care conference that ending the penalty for the individual mandate as part of that deconstruction was actually going to drive up costs.
"That may help, but it still is nibbling at the side," Mr. Price told the World Heath Care Congress in DC. "And there are many, and I'm one of them, who believes that that actually will harm the pool in the exchange market, because you'll likely have individuals who are younger and healthier not participating in that market, and consequently, that drives up the cost for other folks within that market."
More truth! Price -- and he has his reasons --would rather rip Obamacare out by the roots. But he's admitting something here about the piecemeal strategy Republicans have been forced into that is very interesting.
Both of these comments -- from Rubio and Price -- are parts of nuanced arguments, but they both speak to the difficulty of governing. Pass a major tax reform that gives massive cuts to corporations and cuts to most Americans and there's a good chance most people won't even be noticing it on a day to day basis.
The most recent polling from Gallup, in mid-April, suggested support for the new tax law has grown since it was passed, but it still only sits at 39%. Again, most of the benefit to individuals will not be felt until tax time in 2019.
When the Wall Street Journal asked voters how they felt about the law, 34% said they didn't have strong opinions either way.
In other words, the tax reform law accomplishes a lot of the policy Republicans have long sought to fix the US economy. But if individual voters don't feel that in their paycheck, it's a thankless gift. It might not help that the law was passed when the US was at full employment, according to economy wonks.
And many corporations are using their windfall to pay out investors, not pay back to workers. Apple, for instance, is buying back hundreds of billions in stock, rewarding investors. That will certainly help Apple's stock price and could trickle down into the economy, but perhaps not as quickly or efficiently as Apple using the money to hire people or develop products.
On healthcare, there's no sentient being who would argue that Obamacare was a panacea to solve the nation's health insurance problems. But it's likewise very hard to argue that the Trump administration's efforts to starve and strangle the law have done much to improve access to care.
And that's a large reason, as CNN's Dan Merica recently reported, why Democrats are running on bread and butter issues like health insurance and the tax law rather than the Russia investigation and Stormy Daniels.
The most recent CNN poll in March suggests voters say they will support a general Democratic candidate (50%) to a Republican candidate (44%) in November.
Despite the GOP tax win, voters are split at 45% each on whether they trust Republicans or Democrats to handle the economy. Democrats hold a huge advantage -- 56% to 36% -- on who voters trust to handle healthcare.
Those numbers illustrate the difficulty for Republicans in selling their accomplishments. The quotes from Rubio and Price, however, prove the point in a much more effective way.