Here’s the existential question that Senate Republicans have raised with their vote for a $1.5 trillion tax cut that is heavily weighted toward the wealthy: Do they care about the deficit, as they have proclaimed for decades, or do they not? What do they stand for?
Based on the gigantic hole the tax cut would blow in the budget, the answer would seem to be obvious. Rather than parlaying the country’s strong economic performance into deficit reduction, Republicans are planning to make it worse by delivering a tax cut that is excessive and poorly focused.
Anyone who remembers the Obama years will recall that some congressional Republicans demanded offsets for any new spending, even in moments of crisis such as Hurricane Sandy delivered to New York and New Jersey. Yet, now that they control both the White House and Congress they have, without explanation or embarrassment, abandoned that position so that they can deliver on one of their most favored pieces of party dogma: There is no such thing as a bad tax cut.
But there is, and the current plan offers abundant evidence of the fact. This isn’t reform. It doesn’t seek to balance who benefits from the cuts or to understand what their consequences may be.
What it does do is use a parliamentary budget maneuver that will allow the party to approve its tax plan with only 50 votes, avoiding the need for any Democratic support. What started out as a plan to enact broad-based tax reform became a push to cut taxes – mainly for the wealthy, as it turned out, despite promises to the contrary from President Trump.
In the end, it was a fiscal free-for-all, as Republicans declined to do the hard work of paying for what they wanted and instead produced a tax plan that would open a yawning $1.5 trillion gap over 10 years.
Even Sen. Lindsey Graham, R-S.C., who is normally one of the Senate’s most level-headed members, couldn’t help himself. Indeed, he flatly acknowledged that politics were driving the matter.
“This is the last, best chance we will have to cut taxes,” said Graham, a member of the Budget Committee. He warned that the consequences would be ruinous if the party failed: “That will be the end of us as a party,” he was quoted in the New York Times, “because if you’re a Republican and you don’t want to simplify the tax code and cut taxes, what good are you to anybody?”
But they are planning to cut taxes in a way that could be ruinous to the country. Graham’s question should have been, “What good are you to anybody but those whose only concern is to lower their own taxes regardless of the harm it may do?”
None of this is to say that comprehensive tax reform or even certain tax cuts wouldn’t be useful. But they have to make sense. As President Ronald Reagan found out, the supply-side theory, in which tax cuts pay for themselves through economic growth, didn’t work. He ended up supporting tax increases after the deficit began to swell.
Similarly, Kansas ended up with an economic disaster following a radical tax cut program pushed by Gov. Sam Brownback in 2012. By contrast, the U.S. economy soared in the early 1990s after President Bill Clinton successfully raised taxes.
None of these is necessarily a strict matter of cause and effect. Some tax cuts could stimulate the economy and some increases could hinder it. It’s a matter of placing your bets after carefully reviewing the options.
But it’s not about moving recklessly in either direction. That’s what the Senate has done and, if forecasts are correct, what the House is about to do, as well. Their failures on health care reform have, no doubt, left them desperate to do something they can brag about.
This isn’t bragging material. What they will have to do is explain why, with the examples of Reagan and Brownback before them, they refused to make thoughtful decisions about the country’s economic health.