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The GOP Tax Cuts Are Such a Blatant Scam That They Might Change the Whole Conversation

Are Democrats finally learning to refuse to play the “pay-for” game?

Joshua Holland

April 17, 2018

Mitch McConnell holds a news conference to talk about the Republican tax plan in Washington, DC, November 28, 2017.(AP Photo / J. Scott Applewhite)

On this Tax Day, let’s pause for a moment to appreciate how difficult it is to craft a massive tax cut that the American public doesn’t like. Republicans recently managed to do just that, passing a tax “reform” scheme that finances over $1 trillion in cuts skewed overwhelmingly toward corporations and the wealthy through deficit spending and is projected to cause 3 million Americans to lose their health coverage as a result.

The tax bill did gain in popularity after it was passed in December, mostly because Republican partisans were happy that their party, which controls all of Washington, finally managed to pass a significant piece of legislation. But as New York magazine’s Eric Levitz pointed out, several polls have found that it then became less popular once it went into effect in January. Three recent polls have found that the cuts remain under water in terms of public opinion by a margin of 8-9 percent.

That shouldn’t come as much of a surprise; the average $4,000-per-household raise in after-tax income with which Republicans sold the tax bill never materialized. An analysis by the Tax Policy Center found that an average household earning between $49,000 and $86,000 will see a cut of around $930 per year, almost half of which will be wiped out by rising gas prices (not all of which can be attributed to Trump or his party, but, as USA Today notes, “fears of political instability in the Middle East, including the prospect of U.S. military strikes in Syria, and trade tensions with China” are a big part of the story). Fewer than one in three respondents to a recent survey by CNBC said they’d noticed any bump at all in their pay.

But it’s the brazenness with which the Republican Party abandoned any last remaining pretense of caring about deficits or federal spending that may come back to haunt them, and mark a shift in the political landscape around taxes and spending. It goes further than the $1.9 trillion in additional deficits, including higher payments on the national debt, that the Congressional Budget Office (CBO) projects will result from the tax bill over the next 10 years. When the nonpartisan number crunchers evaluated the fiscal impact of all of the legislation passed since mid-2017, including new spending, their analysis found that the GOP will add $2.6 trillion to the deficit over that period. What’s more, as Catherine Rampell noted in The Washington Post, that assumes that the economy will continue growing apace, and that the “temporary” individual tax cuts will expire according to the written law. But recent history suggests otherwise—most of George W. Bush’s budget-busting cuts were made permanent under Obama. In CBO’s worst-case scenario, “deficits would be larger by an average of a full percentage point of GDP, rising by a total of $2.6 trillion to yield a cumulative deficit of nearly $15 trillion” over the next 10 years.

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Then, having created massive deficits for as far as the eye can see, House Republicans had the chutzpah to try to pass a constitutional amendment that would bar future Congresses from running any deficits at all. It’s a remarkably stupid policy. Running deficits isn’t inherently a bad thing if the purpose is to stimulate the economy during a recession or address a national emergency. The problem with these deficits is that they come at a time when the economy is growing and mostly just enrich the wealthy and pump up corporate profits.

The degree of hypocrisy on display here is such that even the most obtuse pundit can no longer pretend that the right’s rhetoric about “fiscal conservatism” is anything but a cudgel to use against Democratic priorities. Back under Obama, Paul Ryan warned that the only way to “avoid a Greek [debt] tragedy here at home” was to “chart [a] new course & cut spending now.” Then, he bashed the Affordable Care Act for adding to the deficit and endorsed the claim that failing to “address exploding path of fiscal deficits would be morally irresponsible.” This week, he dismissed the CBO’s analysis and insisted that the trillion-dollar deficits resulting from Republican policy were actually inevitable solely as a result of “entitlement spending.” Conservatives are already calling for cuts to safety-net programs to address the deficits their party created over the past year.

We’ve seen this all play out before. The Bush tax cuts, like Trump’s tax scam, were sold on the premise that they would stimulate the economy to such a degree that they’d actually pay for themselves. But as this classic chart put together by the Center or Budget and Policy Priorities illustrated, that claim defied basic math.

But Trump’s tax bill, a maximalist expression of Republican priorities, might just mark a shift in the political landscape around taxes and spending. A remarkable exchange between Senator Brian Schatz (D-HI) and Ella Nilsen from Vox suggests as much. Nilsen was talking to Schatz about his debt-free-college proposal, and asked the senator how much it would cost. “I don’t play the pay-for game. I reject the pay-for game,” he said. “After the Republicans did the $1.5 trillion in unpaid-for tax cuts, and as we’re doing a bipartisan appropriations bill which is also an increase in federal spending.… I just reject the idea that only progressive ideas have to be paid for. We can work on that as we go through the process, but I think it’s a trap.”

It is a trap, and it has always been a trap, and this is the right answer. Obviously, the cost of legislation will be part of the discussion at some point in the process—when CBO scores an actual bill—but Republicans articulate their priorities and just dismiss the budget projections that they don’t like. Democrats can take a lesson from that, and if Schatz’s response is any indication, perhaps they do.

The one bright spot in these otherwise perilous times is that Trump has exposed the dark reality of much of the right’s views on race, criminal justice, immigration, and the rule of law. With their tax scam, congressional Republicans have made sure that we also have just as much clarity about what “fiscal conservatism” really means. Time will tell how that plays out in the policy debates to come.

Joshua HollandTwitterJoshua Holland is a contributor to The Nation. He’s also the host of Politics and Reality Radio.


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