House Democrats Should Put These Deals on the Table

(Bloomberg Opinion) -- With Democrats set to take over the House, it's easy to get the sense that they have only one goal: to go after President Donald Trump and his administration. Using their subpoena powers, they will hold oversight hearings and investigate corruption, as they should.

But all those Democrats in the new House will be missing opportunities to help themselves and the nation if that is their exclusive focus. Instead, they should work with Republicans and send some bills to the president.

Why? Divided government can serve the nation well. Divided government fosters legislative achievement because each party can blame the other for parts of a new law that their voters find unpalatable.

Take three examples. The famous 1986 tax reform — which simplified the tax code, broadened the tax base and lowered tax rates —  was enacted under divided government, with Ronald Reagan in the White House, Republicans controlling the Senate and Democrats in the House majority. Compromises that led to significant changes to Social Security occurred in 1983 when Republicans controlled the White House and the Senate, and Democrats had the House.

When Congress reformed the welfare system in 1996, Republican Newt Gingrich was speaker of the House, Republicans were in power in the Senate, and Democrat Bill Clinton was president.

The most fertile ground for compromise in the next Congress would find Democrats trading permanent legal status for the “Dreamers” in exchange for funding Trump’s “wall” along the U.S. southern border. Around 700,000 immigrants who were brought to the U.S. illegally as children are enrolled in the Obama-era DACA program (Deferred Action for Childhood Arrivals), which is currently shielding them from the threat of deportation.

But they need a permanent solution. Some Republicans are hoping for $5 billion for a “border wall system” of enhanced security. There’s a deal to be had here, with plenty of details left to negotiate. 

House Democrats are planning to hold hearings on the new tax law, and want to focus on how the law could be changed to provide more tax relief to the middle class. In a press conference Wednesday, the president said that “if the Democrats come up with an idea for tax cuts — and I’m a big believer in tax cuts — I would absolutely pursue something even if it means some adjustment.” The president even said he was open to raising the corporate tax rate.

In my view, the corporate tax rate should stay where it is. But some increase in the tax burden faced by high-income households — by further broadening the income tax base — to provide tax relief for the working class could make sense.

Better still would be to provide them with more economic opportunity. A major failing of the new tax law was the absence of an expansion of federal earnings subsidies for low-income, working adults without children. The new Congress might be able to work with the president to correct this omission.

There are opportunities to work together on infrastructure policy that include measures to reduce the bureaucracy associated with projects. Under President Barack Obama, Republicans were outspoken deficit hawks. Under Trump, Democrats have voiced concern about the deficit. At a minimum, the new Congress could agree not to make the deficit worse. It would be possible for the parties to work together on lowering the cost of prescription drugs, as well.

Apart from legislation, Republicans and Democrats should come together to support and protect the investigation of special counsel Robert Mueller.

Politics will make this difficult, because any Democratic compromise on legislation — not on Mueller, whose congressional support should not be compromised — inevitably means giving Trump a victory. And I have no doubt that the president will continue his streak of outrageous and dangerous behavior. As we get closer to the 2020 election, he will only become a bigger obstacle to bipartisan compromise.

But even if it means handing the president a bill-signing ceremony or two, Democrats will need a record of accomplishment to present voters in 2020 that goes beyond investigations and actions against him.

Republicans and Democrats alike might remind themselves — and the American people — that Congress is a co-equal branch of government. By working together on legislation to address some of the nation’s many pressing concerns, there’s a chance that Congress might lead the country at least some distance out of our current hostile, partisan stalemate, restoring some civility and sense of common purpose.

That’s a chance worth taking.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Michael R. Strain is a Bloomberg Opinion columnist. He is director of economic policy studies and resident scholar at the American Enterprise Institute. He is the editor of “The U.S. Labor Market: Questions and Challenges for Public Policy.”

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