Congressional Republicans are about to pass, and President Donald Trump is about to sign, a tax bill that violates Trump’s campaign promises, does little for the middle class, ignores decades of party orthodoxy on tax cuts, and is unpopular with voters.
Still, Republicans are celebrating one of their few achievements. They may be right to do so; as a political matter, the alternatives are worse.
In the unlikely event that they can’t resolve differences between House and Senate tax legislation, Republicans would head toward midterm elections after a year in control of all the levers of power with just one major achievement: the confirmation of Supreme Court Justice Neil Gorsuch. That would deprive Republican incumbents in 2018 of any positive argument for re-election.
“We can’t afford to fail,” said Sen. Lindsey Graham, the South Carolina Republican, articulating party leaders’ conviction that passing a bill matters more than what’s in it. They’ve exaggerated any substantive benefits to the economy because failure would have disappointed Republican donors and committed Republican voters.
Trump wanted a victory, whatever it took; he fumes at being justly dubbed one of the least successful first-year presidents. Key provisions of the tax bills would also enrich him personally, along with his family – it’s impossible to say by how much because he has refused to release his tax returns, but estimates have put the benefit to him at well over $20 million. The savings to his heirs from eliminating the estate tax could top $1 billion. (If you believe his claim that the bill will cost him “a fortune,” then you also probably believe that he won the popular vote last year and drew the biggest inaugural crowd ever.)
The bills violate some of Trump’s main campaign promises. He vowed that the rich would not get a tax cut, but they’ll get a big one. He said that tax cuts wouldn’t increase the deficit; congressional analysts have determined that it would, adding $1 trillion to the national debt even after accounting for increased economic growth. He promised not to touch Medicare, but the tax bill would force reductions. If Trump had a sense of humor he might emulate the colorful mid-century governor of Louisiana, Earl Long, who when asked what to tell voters about a broken campaign pledge replied, “Tell ‘em I lied.”
Tax policy isn’t what moves Trump’s most enthusiastic supporters one way or the other. The tax legislation won’t deliver much in the way of pocketbook benefits to the white working-class voters whose ballots in key Midwestern states sent him to the White House. But it won’t cost them significantly either, at least not on April 15. Hits to university scholarships, public transportation and other subtler effects are less easily traceable to a congressional vote for tax cuts, or at least that’s the calculation.