Will Centrist Dems Give Trump His Tax Cuts?

(Bill Clark/CQ Roll Call via AP Images)

Representative Kurt Schrader of Oregon on March 25, 2015

While the Republican Party battled itself during its attempt to roll back Obamacare, Democrats in the House and Senate formed a united and unwavering front of “No” votes. Not one red-state Democrat in the Senate nor a single centrist in the House peeled off. That’s rather impressive, considering that 34 House Democrats voted against the Affordable Care Act in 2010.

There are a few reasons for this. Very few of those conservative Democrats have kept their seats, and the remaining congressional Democrats have moved leftward in recent years, to the point that preservation of the ACA has become a unanimous priority for Democrats. Also, the extraordinary levels of grassroots activism from groups like Indivisible, MoveOn, and ADAPT put intense pressure on Democrats in both the House and Senate to resist any sort of bipartisan overtures.

Perhaps most important, the visceral ramifications of gutting Obamacare—people losing coverage because of pre-existing conditions, paying higher premiums, losing access to Medicaid, and so on—injected a profound and all-too-rare sense of morality to the political debate.

But as the Trump administration pivots to tax cuts (the Republican Party’s raison d'être), the moral lines and potential ramifications are not as intuitively vivid—and Democrats are not nearly as unified. The Trump administration is trying to use this to its advantage.

The president’s chief economic adviser, Gary Cohn, and Treasury Secretary Steven Mnuchin—two of the so-called Big 6 tax-cut architects—have reportedly been quietly courting as many as 20 Wall Street-friendly Blue Dog Democrats in the House, who may still believe that the benefits of deregulation and tax cuts will trickle down to the middle and working classes. The core of the Trump tax plan is to halve the corporate tax rate, slash the top marginal income rate, and create a lower rate for pass-through entities.

“We’d prefer bipartisan support for the tax plan,” White House Director of Legislative Affairs Marc Short told Politico earlier this month. “We still think we can earn the support of [Democrats] on the tax package.”

At least some seem eager to get on board. “The door is open, and this should be a bipartisan issue. I hope they consider us,” Oregon Democratic Representative Kurt Schrader told Politico.

Unlike the broader Democratic caucus, “centrist Democrats are more focused on doing what can be done to lower the corporate rates and the rates for [small businesses],” said Illinois Democrat Dan Lipinski, a longtime Chicago centrist.

In an August 1 letter to President Trump and GOP leaders in Congress, Senate Minority Leader Chuck Schumer layed out the requisites for Democrats to consider a bipartisan tax reform packages: no tax cuts for the wealthy and no adding to the deficit. The message was clear: Don’t count on Democrats to do your dirty work.

But while 45 Democratic senators did sign on to the letter, three red-state members refrained: North Dakota’s Heidi Heitkamp, Indiana’s Joe Donnelly, and West Virginia’s Joe Manchin. The Trump administration has signaled that it will soon begin trying to peel off those senators, too. All are up for re-election in 2018 and many of those Blue Dog Democrats come from competitive swing districts. They are all eager to point to ways they’ve rebuked their own party’s liberalism.

What better way than to do that than to support the crusade for tax cuts, providing bipartisan cover to Trump’s claim that reducing corporations’ tax burdens will quite literally trickle down to workers?

Problem is, they don’t. Research shows that about 70 percent of the benefits go to the top fifth of households (which are more likely to have a stock portfolio), with nearly half of that going strictly to the top 1 percent.

But while the clear human impact of the attempted health-care rollback helped keep conservative Democrats in line, those Democrats seem less concerned about the human toll of trickle-down tax cuts. No matter how Republicans say they’re going to pay for their tax cuts, their plan will increase the deficit. That in turn will open the door for austerity in the future. And of course, those cuts will ultimately end up on the backs of poor and middle-income Americans.

On top of that, in this new age of political populism, cutting taxes for the rich is not the smartest of political calculations for Democrats trying to woo swing and sometime voters. Post-election polling finds that the majority of Americans already think the economy favors the rich, and that Congress shouldn’t lower taxes on the wealthy and corporations, or even across the board, if it means raising the deficit. In a Quinnipiac poll, 57 percent of respondents rejected the notion that tax cuts for the top create jobs.

There’s a very real possibility that Republicans’ attempt to unilaterally pass tax cuts through the budget reconciliation process will break down along similar fault lines in the health-care fight. If that happens, Democrats should once again stand firm against Trump’s agenda, and not look for ways to facilitate corporate tax cuts.

Of course, that’s more easily said than done. As we see, thanks to the Blue Dogs, the allure of trickle-down economics may be lamentably bipartisan. 

Tax Cuts for the rich. Deregulation for the powerful. Wage suppression for everyone else. These are the tenets of trickle-down economics, the conservatives’ age-old strategy for advantaging the interests of the rich and powerful over those of the middle class and poor. The articles in Trickle-Downers are devoted, first, to exposing and refuting these lies, but equally, to reminding Americans that these claims aren’t made because they are true. Rather, they are made because they are the most effective way elites have found to bully, confuse and intimidate middle- and working-class voters. Trickle-down claims are not real economics. They are negotiating strategies. Here at the Prospect, we hope to help you win that negotiation.

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