Democrats Should Aim To Replace An Even 100 GOP Congressmembers

The DCCC launched an on-line ad campaign against something like 40 Republicans, including 9 California targets: Jeff Denham, Devin Nunes, David Valadao, Steve Knight, Ed Royce, Mimi Walters, Dana Rohrabacher, Darrell Issa, and Duncan Hunter. I'm sure there's a reason they're not including House Majority Leader Kevin McCarthy (R-CA) in the campaign (nor for that matter Paul Ryan. Oh, that's right, Pelosi doesn't believe in targeting Republican leaders; I almost forgot. Sunday's NY Times included an OpEd by David Leonhardt, The GOP Is Fooling Itself On Taxes about the corner the party has backed itself into on tax policy-- all in the name of "a win"-- any win. The theory is that "If they somehow fail to pass a tax cut, they will anger their base and their donors and look incompetent to swing voters. But," wrote, Leonhardt, "the actual bill that the House passed last week-- and the modestly different plan the Senate is considering-- is a dreadful piece of policy. It would cause the deficit to soar and, as a result, probably reduce economic growth. It would also raise taxes for millions of middle-class families. And most Americans realize that the tax plan is dreadful. Only 16 percent of adults said they thought the plan would reduce their own taxes, according to a Quinnipiac poll released last week. On the same day the poll came out, several Republican senators criticized the plan, which suggests it may be in jeopardy."

There is no easy way out for the party at this point. In coming days, Senate leaders will probably claim to take steps to fix the House bill’s flaws. But they won’t be able to, absent a complete rewriting. The core of the plan is the problem.

How did Republicans do this to themselves?

Above all, they refused to heed the lessons of 2016-- of Trump’s shocking romp through the primaries and even more shocking general-election win. In a time of deep economic dissatisfaction, among members of both parties, Republican leaders insisted on basing their plan around an enormous tax cut for the wealthy. Doing so pleased their donors and trickle-down true believers, but it is worth pausing for a moment on the cynicism of the plan. In substance, it is almost the direct opposite of the party’s middle-class rhetoric.

“The G.O.P.,” Henry Olsen, a conservative policy expert, recently said, “really wants to do nothing other than cut taxes for businesspeople and the top bracket based on what can only be called religious devotion to supply-side theory.”

Once Republican leaders filled their plan with tax cuts for the wealthy, they didn’t have much money left for the middle class. In the Senate, Republicans were so desperate to find money that this past week they released a new version of the bill that made virtually all of the middle-class tax cuts temporary. They expire before the bill’s final year, 2027.

An assortment of middle-class tax increases-- again, to help cover the cost of the tax cuts for the wealthy-- last for the full life of the Senate bill. As a result, it ends up being a tax increase on households making less than $75,000, according to the only rigorous analysis so far, by the Senate’s Joint Committee on Taxation. For families making somewhat more than $75,000, the tax cut is modest and likely temporary, given the deficit. The plan, says Martin Sullivan, chief economist at Tax Analysts, a highly regarded research group, has “stunningly meager tax benefits for middle class.”

The best hope for stopping the bill is the handful of Republicans willing to think beyond raw partisanship. They include Susan Collins and John McCain, who helped defeat the health bill, and Bob Corker and Jeff Flake, who aren’t running for re-election and consider themselves fiscal conservatives. (Ron Johnson, of Wisconsin, has came out against the bill, although he did the same on the health care bill, before flip-flopping.)

True, another failed attempt at major legislation would be a big political problem for the Republicans. But passing a hastily written, deficit-busting bill that harms the middle class would not be great, either. It’s impossible for these senators to solve their party’s political troubles. They may as well do the right thing.

What the Republicans seem most worried about is that their wealthy donors will abandon them if the don't pass a tax cut for wealthy people. They assume people-- voters-- will forget the details and they can keep repeating over and over, "we cut taxes," as you hear Ryan already braying ad nauseum. All that has to happen for this to work is something that's never worked before: trickle down (what George H.W. Bush called "Voodoo Economics"). Last week, Paul Waldman reminded Washington Post readers that the theories that Mick Mulvaney was espousing on CNN's State of the Union Sunday (see clip above) are all wrong.

The new plan is meant to deal with two critical constraints. The first is that the budget resolution the Senate passed allows this bill to increase the deficit by no more than $1.5 trillion over the next 10 years. The second is that the bill can’t increase the deficit at all in the 10 years following that. They need to repeal the mandate because doing so gives them $338 billion in savings to work with, according to the Congressional Budget Office.

But the CBO also says that repealing the mandate will result in 13 million fewer Americans with health insurance-- hence those savings, which won’t be spent on expanded coverage-- and increases in premiums of an additional 10 percent a year. Some people won’t realize that they’re eligible for free or heavily subsidized insurance and, without the mandate to prod them, won’t get it, and as young and healthy people pull out of the market, the remaining pool will be older and sicker, leading to premium spikes, the exit of insurers from the market, and a potential “death spiral.” There are some Republicans, including the president of the United States, who are actually dumb enough to think voters will blame Barack Obama for this.

But that’s just one element of this tax cut that is going to be incredibly unpopular. Remember that point about not being able to increase the deficit at all after 10 years? Because they want to make the corporate tax cut permanent-- since it’s the real centerpiece of this whole effort-- here’s what they’re going to do:

[Senate Republicans] also announced that the individual tax cuts in the plan would be made temporary, expiring at the end of 2025 to comply with Senate rules limiting the impact of legislation on the long-term deficit. A corporate tax cut, reducing the rate from 35 to 20 percent, would be left permanent.

In other words, if you happen to be one of the lucky people who come out ahead at first with all the complex changes to the tax code this bill makes, in 2026 your taxes will go up. It’s just getting better and better, isn’t it? So let’s review:

• The Republican tax bill raises taxes on somewhere between 16 million (Senate version) and 47 million (House version) American households; the difference is mostly because the Senate bill doesn’t get rid of as many deductions as the House bill.
• Most of the benefits of the tax bill go to the wealthy and corporations.
• It may raise taxes on people with large medical expenses, and parents who adopt children, and people with student loans, and graduate students (these provisions are in the House bill, which ends these deductions, but not the Senate bill).
• It raises taxes on people who live in states with significant state and local taxes, because it does away with this deduction (in both versions).
• Because it eliminates personal exemptions, it raises taxes on many families with multiple children (in both versions).
• It will increase insurance premiums and lead to 13 million fewer Americans with health coverage.
• It could trigger a $25 billion cut to Medicare because of existing budget rules.

If you had to sum it up simply-- for instance, if you were writing a Democratic attack ad in the 2018 election-- you could say that Republicans are raising taxes on millions of Americans and taking away health insurance from millions more, all to pay for a huge giveaway to corporations.

Of course, Republicans argue that giving corporations a tax cut will make us all enormously richer. This claim is laughable, since corporations are already earning near-record profits and unemployment is low; it’s not as though they’re starving for cash and once they get this tax cut they’ll rush to invest, create jobs and raise wages.

We now have a vivid illustration of this fact. Gary Cohn, President Trump’s chief economic adviser, was at a forum, and the moderator asked how many of the business leaders in the audience planned to increase investment if the tax reform bill passed. Only a couple of hands went up. Cohn said with a pained smile: “Why aren’t the other hands up?”

If we’re considering the politics of this bill, it’s also important to understand that very few people buy the Republican argument. In fact, most Americans think corporate taxes should be raised, not lowered. So not only are the details politically damaging, but also the core of the bill is something the public doesn’t want.

None of this means the bill won’t pass. Republicans have convinced themselves that no matter how bad the bill is, not passing anything is worse, so the chances that they’ll allow it to fail are small. But when that day comes, Democrats will know that Republicans just gave them yet another powerful issue to run on in 2018. Expect to hear them say, “Republicans have had complete control of Washington for the past two years-- and all they did was raise your taxes and yank millions from health coverage so they could lard another giveaway on corporations.” Something tells me that might be a pretty effective message.

Forbes ran a piece by Stan Collender yesterday, GOP Tax Bill Is The End Of All Economic Sanity In Washington, asserting that Ryan's tax scam "will be the start of a decades-long economic policy disaster unlike any other that has occurred in American history... [It] will increase the federal deficit by $2 trillion or more over the next decade (the official estimates of $1.5 trillion hide the real amount with a witches brew of gimmicks and outright lies) that, unless all the rules have changed, is virtually certain to result in inflation and much higher interest rates than would otherwise occur... It will "be enacted without anyone who votes for it having any understanding of the damage it could do to the economy. They have wishes, hopes and prayers but in reality nothing beyond the economic equivalent of pagan superstition... [I]f the GOP tax bill is enacted, Congress and the president this year will give up almost all ability to deal with the U.S. economy for at least a decade even when, as almost certainly will happen, there's a downturn. No one else will be able to fulfill this role. That's almost a textbook definition of economic insanity." This is what Paul Ryan has plotted his entire adult life and even if Randy Bryce defeats him in 2018-- as seems likely (you can help make that happen by tapping on the thermometer below)-- it will be too late for tech country's economic well-being.

Early this morning, The Atlantic published David Frum's musings on the Ryan Tax Scam, and though he's a proponent of corporate tax reform, he noted that "It’s a scandalous expression of upper-class and Sunbelt chauvinism that will melt away within weeks of the next Democratic electoral success. Even if it becomes law, as still seems improbable in the face of the plan’s terrible poll numbers, what firm would venture a long-term investment based on tax changes so likely unsustainable?”

And, so far, Pelosi has been incredibly successful in holding her entire caucus together in opposing this crap. Not even one stinking Republican-lite Blue Dog or New Dem-- not even Sinema, Lipinski, Peterson, Gottheimer or Cuellar-- has strayed across the aisle. Why is that important? The Democrats often find themselves unable to deliver effective messaging against congressional Republicans because these very Democrats cross the aisle and vote with Ryan and McCarthy. If the Democrats attack the GOP for passing legislation that Democrats from the Republican wing of the Democratic Party help them pass, it creates a schism inside the party and could possibly help defeat Democratic incumbents in elections, considered, in DC, the end of the world as we know it. Now, if Pelosi would just tell the DCCC to stop recruiting more Blue Dogs and New Dems, things will be a lot less complicated for the party going forward. But that isn't going to happen. Of the 11 candidates for 2018 that the DCCC has thus far officially endorsed, at least 8 are from the Republican wing of the party-- gun freak and New Dem Ann Kirkpatrick (AZ), Blue Dog Brendan Kelly (IL), Blue Dog Paul Davis (KS), New Dem Elissa Slotkin (MI), New Dem Angie Craig (MN), Blue Dog Dan McCready (NC) and Blue Dog Anthony Brindisi (NY). And, although neither Jason Crow (CO) nor Susie Lee (NV) has been officially endorsed by either the New Dems nor Blue Dogs yet, I know that stink of Republicanism emanating from both of them. Help fight Blue Dog-ism by tapping on the thermometer on the right and contributing what you can to solid progressive candidates.