Trump, GOP lurching toward another failure
By JARED BERNSTEIN | Special to The Washington Post | Published: November 1, 2017
House Republicans were supposed to release the details of their tax cut plan on Wednesday, but as of Tuesday night, it appears that they will push the release to Thursday, as they struggle to find ways to offset the cost of their plan. This sort of process — introducing major tweaks at the last minute, writing the bill in secret while touting its alleged benefits, throwing out new “payfors” at the last minute in hopes that lobbyists won’t have time to fight against them — is unprecedented.
In a way, so what if they’re a day late? History will not record this hiccup. But that glazes over the larger point. Except for health care reform — the last big issue President Donald Trump and the Republicans tried to legislate — I’ve never seen such lurching on such a portentous issue. The federal government collects about 17 percent of GDP in taxes, over $3 trillion per year; health care spending is of a similar magnitude, split equally between the public and private sectors. And their health care debacle came after seven years of endlessly inveighing against the Affordable Care Act, hundreds of wasted hours of debate and dozens of phony, showboating repeal votes that the Republicans knew would not pass.
This is terrible governance, brought to us at the hands of a majority political party that has mastered the art of getting elected, while remaining clueless as to what to do once in power.
But hold up a second. Why should I complain about this? If team Trump/Ryan/McConnell can’t move legislation that guts health care, adds tens of millions to the ranks of the uninsured, transfers trillions in tax revenue to the wealthiest households and multinational corporations at the expense of the middle class and the poor, that’s a feature of their legislative fecklessness, not a bug, right?
Yes and no.
First, it ain’t over, either for health care or especially tax cuts. There’s a lot the Trump administration can and does engage in to sabotage the Affordable Care Act, including the president’s ongoing threats to eliminate payments to insurance providers that subsidize coverage for low-income participants in the insurance exchanges.
On taxes, Republican tax writers are having a bear of a time stuffing $5 trillion in cuts into the $1.5 trillion of increased deficit spending they wrote into their budgets (these are 10-year figures). So, as noted, they’re lurching around looking for payfors. They argued for months about a “border-adjustment tax” before punting as key lobbies feared the tax would raise the price of imported goods. They’ve gone after tax-favored retirement savings, state and local tax and mortgage interest deductions, and now they’re talking about possibly phasing in some of their cuts and leaving the top tax rate on income where it is instead of lowering it.
For the record, some of these ideas are good, and, depending on how they are structured, are worth analyzing and even supporting, were they not being used to pay for this set of wasteful, regressive tax cuts. It’s true that our tax code wastefully subsidizes activities that would occur even without the subsidy, like home-buying or retirement saving by the wealthy. But a few days ago, when the tax writers announced a cap on 401(k) savings plans of $2,500 (down from $18,000 to $24,000, depending on the age of the saver), my first thought was “why on earth would you ding middle-class savers to offset the cost of repealing the estate tax?!”
The answer is that this is what happens when you lurch. And while their incompetence could ultimately preclude their passing such an ill-conceived plan, that’s not a bet we should have to take. If I see a drunken driver careering down the road, I take little solace in the hope that he won’t hit somebody.
Similarly, I take little solace from the fact that their punishing health care reform plan failed by one vote or that they’re having trouble squeezing their plan into their budget. My colleagues and I will of course continue to fight tooth and nail to prevent the damage to economically vulnerable people inherent in these plans. We will also vigilantly monitor their scorekeeping, as their payfor problems are likely to push them to tap phony growth assumptions and timing gimmicks to mask a fiscal hit that may well far exceed $1.5 trillion.
But we also must look at the bigger picture.
As I said above, this isn’t about being a day late with their tax plan. It’s about the fact that our electorate has handed the keys of governance to the most nonrepresentative, factually challenged and potentially harmful politicians I’ve seen in my lifetime. The extent of the damage they can inflict on the economy, the income distribution, our fiscal accounts, the culture, the media and whatever sense of community and “we’re-in-this-together” is yet to be seen. Some institutions, particularly the courts, are holding firm. And Trump has awakened a resistance movement that looks to me to be building real muscle.
But do not let their bumbling mask how dangerous they are to our nation.
Jared Bernstein, a former chief economist to Vice President Joe Biden, is a senior fellow at the Center on Budget and Policy Priorities and author of “The Reconnection Agenda: Reuniting Growth and Prosperity.”