Republican Strengths Turn Out to Be Weaknesses
(Bloomberg Opinion) -- Republicans knew the hurdles they were facing when they looked ahead to the 2018 midterms. Off-year elections are usually arrayed against the party in power, and the party’s leaders anticipated that Donald Trump would be a problem in swing districts. They thought these hurdles would be offset, however, by their positions on health care, an issue they've dominated since 2010, and by the tax cuts they enacted.
It's not working out.
The tax cuts, which Trump signed five months ago, are losing support. Each of the last seven national polls, according to Real Clear Politics, show more Americans disapprove than approve of the Republicans' self-styled tax-reform measure. The average negative margin is seven points.
Obamacare, an albatross for Democrats during the past four elections, is more popular since the Republicans tried to sabotage it. The burning issue of high drug prices won't help. Instead of cracking down on the pharmaceutical industry, as he promised to do during the 2016 campaign, Trump backtracked and instead proposed modest measures cheered on by the industry.
The Kaiser Health Tracking Poll found that Obamacare, after years of poor ratings, went into favorable territory a year ago. Most voters don't want the law repealed, and huge majorities oppose any cuts in Medicare or Medicaid.
After failing to replace the Affordable Care Act, Trump and congressional Republicans have tried to gut it, failing to deliver on promised fixes. This year, the administration sharply cut back public information about enrolling in the health-care exchanges, yet almost 12 million Americans still signed up.
Premiums are increasing sharply. It will be tough for Republican candidates in competitive districts to blame Obamacare, as they did in previous elections. Instead, by repealing the individual mandate and other actions, the Republicans can be blamed for causing some of the increases in premiums. They are learning the Colin Powell Pottery Barn rule: "You break it, you own it."
The biggest issue may be spiraling drug prices. A Senate report this year found that the costs for the most commonly used drugs have risen 10 times more than the general inflation rate. By retreating on a plan to let Medicare negotiate drug prices, Trump handed Democrats a campaign issue. The one lifeline for Republicans may be that left-wing Democrats are pushing a government-run single-payer plan. Republicans are on comfortable ground attacking that, getting off the defensive.
If health care is pretty much a loser for them, Republicans still hope they can successfully argue that the tax cuts have created the economic boom. The party and supportive interest groups are spending a ton of money plugging the virtues of the plan and assailing Democrats who voted against it.
While the average middle-class family will get about a $75-a-month tax cut — more than the “crumbs” Nancy Pelosi, the House Democratic leader, described — the plan is above all a giveaway to corporate America and the wealthiest taxpayers. The largesse hasn't been shared. Since the tax cut was enacted, the economy has averaged almost 200,000 additional jobs a month; that's barely up from President Barack Obama's last year.
Wages remain stagnant. Howard Gleckman, a senior fellow at the Tax Policy Center, notes, "There's little evidence that firms are passing the tax cuts on to workers in the form of higher wages or new hires." Some Republicans like Florida Senator Marco Rubio acknowledged this before being pressured to pull back.
More and more anomalies and crazy contradictions are emerging about the carelessly written bill. Michael Graetz, a Columbia law school professor and leading expert on tax policy, cites the provision that seems to allow contractors but not employees to deduct business expenses: "Whether my dog's walker is an employee or an independent contractor may depend on whether I tell her specifically what time and where to walk my dog and who supplies the pooper scooper or doggie bags.”
This gives fodder to Democratic candidates who charge, correctly, that the measure is a huge budget-buster, creates glaring new inequities and loopholes, and overwhelmingly favors the wealthy. Rather than just opposing tax cuts, a number of Democrats want to give more cuts to middle-class workers and take them from the affluent.
The Republicans' biggest canard is their contention that this partisan sop to the rich is analogous to a bipartisan, revenue-neutral measure in 1986 that sharply lowered tax rates by closing loopholes for special interests. Both are tax reform, the Republicans claim. That’s like saying both Warren Buffett and Bernie Madoff are investors. We know which plan added value, and we know which one is a scam.
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