Last night Senate Republicans ran into a problem with their tax cut bill. Even using the voodoo economics of dynamic scoring (assuming tax cuts will spur economic growth that will lead to higher tax revenues), the bipartisan Joint Committee on Taxation reported that the bill will add $1 trillion to the deficit over the next ten years. Several true deficit hawks in the Republican ranks objected to that. So leadership went to work tweaking the bill and hope to vote on it today. We’ll see how that goes.
It is worth keeping in mind that Senate Majority Leader Mitch McConnell is on a tight timeline. Not only does he have to get this one settled and move on to pass a spending bill by next Friday in order to avoid a government shutdown, he has another deadline looming. If the tax bill passes the Senate, it has to be reconciled with the one that passed in the House, and then brought back to both bodies for another vote. McConnell is trying to get all of that done by December 20th, when the next Senator from Alabama will be seated. Should Democrat Doug Jones win that race, Republicans would have one less vote to work with.
A lot has been documented about how the Senate tax bill is horrendous public policy. But other than acknowledging that the Republican constituency that is demanding these cuts consists almost entirely of their donors, there hasn’t been much talk about the political consequences of either passing or failing to pass this bill. Last night Josh Marshall weighed in on that.
Republicans have not held any hearings on this legislation. They do not even have an actual text of the legislation. To keep the process moving forward they’ve disregarded basically all the technical analyses of the legislation. They’ve determinedly put their fingers in their ears when there’s any mention of the bad outcomes we know about pretty clearly in advance – like a big tax increase for most families in a slew of blue states which still have a lot of Republican representatives…
They are in the midst of hitching their political fortunes to a bill even they don’t know the contents or the consequences of. A lot of those will be bad for a majority of the population. ..Most see the bill as an effort to help the wealthy at the expense of everyone else. That’s the prism people will view it through as we learn the details. That’s a very treacherous place to be for the in party going into what looks to be a tough midterm election.
He’s basically saying that over the next year, voters will see the consequences of this bill and take it out on Republicans in the 2018 midterms. This is one of the few times that I completely disagree with Marshall.
Voters love it when politicians talk about tax cuts. But based on my experience, they don’t tend to notice when changes actually happen. I know that is hard for a lot of us policy wonks to believe, but it is especially true for lower income Americans, where changes in the tax code usually have minimal impact. So the first thing to keep in mind on the politics of this is that most of the changes won’t matter to average Americans.
The one thing some people might notice is that, when they go to fill out their tax forms, there would be changes to what they can/can’t deduct (i.e., state and local taxes). That could cause some backlash. But those will not hit for preparing tax returns this January-April. They will go into effect in 2018 for taxes filed January-April 2019.
In addition to how this will directly affect voters in terms of their individual taxes, it is very likely that the complexities Marshall writes about will have negative impacts on the economy. The challenge that poses is that it could be difficult to make a direct correlation between those consequences and the tax cuts.
As a result, if Republicans manage to pass this bill, they will go into the 2018 midterms with two political benefits:
- The fact that they finally passed a major piece of legislation, and
- The ability to crow about giving people a tax cut with zero accountability on that assertion until 2019.
I actually think they’ll get more of a benefit from #1 than #2 because being cast as failures would resonate with a lot of voters—especially their Republican base.
As I’ve been saying for a while now, all signs are pointing towards a blue wave in the 2018 midterms. Regardless of what happens with this tax cut bill, those elements will remain in place. But Republicans will avoid adding another blow to that list if they can get this monstrosity passed. Those are the political consequences they face today.