(Bloomberg View) — The ruling Republicans are trying to defy Washington’s political gravity: pushing through massive health care and tax overhauls crafted largely in secret, on a partisan basis, brushing aside congressional expertise and overcoming the policy ignorance of President Donald Trump with products of dubious quality, at best.
They want to do it twice, starting with the Senate’s struggle to change the Affordable Care Act this month. Senate Majority Leader Mitch McConnell sees this as a nuisance that must be resolved to get to the real priority: tax cuts, especially for the wealthy.
It’s doubtful that Republicans will succeed and send a health care bill to the White House. If they do, it will be a jerry-built political patchwork that few defend as good policy. It would fulfill a promise to the party’s base to repeal Obama’s signature law, though at the political cost of denying coverage to many supporters.
For Republican leaders, disposing of their health care problem, even unsuccessfully, would clear the decks for taxes. They will argue then that a big tax bill must be passed or the entire year will be a failure. If a 2018 budget is approved, they’d be able to consider taxes under a procedure that would only require Republican votes.
Passage of even a flawed health care measure might make it easier, however. Slashing spending for Medicaid, which principally helps the poor, the elderly and people with disabilities, would allow tax cuts of about $1 trillion over 10 years. That would mostly help the affluent, especially if Republicans eliminate the 3.8% tax on investment income over $250,000 imposed by the Affordable Care Act.
Then Republican tax cutters could slash deeper into corporate and individual taxes.
But while McConnell and House Speaker Paul Ryan insist that tax legislation will be easier for Republicans to pass than a health care overhaul, party schisms are already emerging. The small band of moderate Republicans is objecting to the substance and optics of giving goodies to the rich while slicing social programs. Fiscal hawks are fretting over spiraling deficits even as supply-side colleagues and those representing special interests believe most any tax cut is good.
“The tax bill will be a mirror reflection of what’s happening on health care,” said Rep. Richard Neal of Massachusetts, the ranking Democrat on the House Ways and Means Committee. “They are divided over everything.”
Ryan promises sweeping tax-reform legislation that won’t reduce government revenues, balancing reductions in tax rates with elimination of deductions and other preferences.