President Trump and congressional Republicans are desperate to pass tax reform, which they are unveiling Thursday after laying out the broad outlines of the proposal in September. But Republicans need good news even more now, what with Trump’s struggling presidency taking another hit after special counsel Robert Mueller charged three of his 2016 campaign aides with crimes.
So what Republicans probably need is for some Americans to really like this tax plan — or at least for everyone not to hate it. In other words, they have to turn the tax debate into something more like what happened when the Senate debated and ultimately approved the nomination of Neil Gorsuch to the Supreme Court in the spring. They can’t afford the tax debate becoming a debacle like the GOP efforts to repeal Obamacare this summer and fall.
The pattern so far in Washington this year — admittedly more anecdotal than based on hard data — is that Trump and the Republicans are able to move forward on issues that are divided simply along partisan lines but struggle when they face opposition coming from a number of directions. Republicans had the votes to muscle the Gorsuch nomination through the Senate, despite strong congressional Democratic opposition. They were aided by conservative groups that focus on many disparate issues joining together in pushing for Gorsuch.
In contrast, the various GOP Obamacare repeal proposals were aggressively contested not only by congressional Democrats but also by four other constituencies: the media, which debunked GOP claims that the bills would protect Americans who had pre-existing conditions from either losing coverage or facing higher costs; the public, which polls showed was overwhelmingly opposed to Obamacare repeal; and nonpartisan experts, from medical and health policy organizations (which questioned whether the legislation would the improve health care system) to the Congressional Budget Office (which calculated that the repeal effort could leave millions without health insurance.) Lastly, while many conservative activists stayed on the sidelines during the Obamacare repeal debate, liberal outside groups organized events across the country trying to kill the bill.
I acknowledge the obvious differences between health policy legislation and Supreme Court nominations, which, for starters, only have to be approved by the Senate. But like the health care bill and the Gorsuch nomination, Republicans can get the tax package passed without a single Democratic vote — if they can keep their party united behind the measure. Republicans have very narrow margins, particularly in the Senate, and they can’t afford a repeat of health care — where the bill was so hated that Maine Republican Sen. Susan Collins had people literally cheering her (at a July 4 parade and later at an airport) for opposing the legislation.
So here’s a look at the various constituencies that could affect the tax debate, where they are positioned now and how that could shift over the next two months. (We are considering them in alphabetical order.)
The Democrats never fully unified against Gorsuch, with three senators from states that Trump won in November (Indiana’s Joe Donnelly, North Dakota’s Heidi Heitkamp and West Virginia’s Joe Manchin) eventually voting for his confirmation. Again, Gorsuch would have been approved no matter what, since all 52 Senate Republicans backed him. But with Gorsuch, Republicans at least could present the veneer of bipartisanship. In contrast, all 48 Democratic senators essentially opposed the Obamacare repeal push from the beginning.
All indications are that Democrats in the Senate (and the House) are unified again, casting the Republican tax plan as a giveaway to the rich. (Not a single Democrat in either chamber backed the budget resolution that set up the process to pass a tax bill through the so-called reconciliation process, by which Republicans need only 51 votes in the Senate to get legislation passed.)
Why does Democratic unity matter? Well, first, in terms of passing a bill, this stalwart Democratic opposition means that Republicans need the votes of all but two of the 52 senators (with Vice President Mike Pence casting a tie-breaking vote) and all but 22 of the 239 GOP House members. A small, rogue band of Republicans can easily stop or stall the bill. Second, in terms of the public debate on taxes, it would probably help the GOP if it could cite a single Democrat in Congress who supports the proposal. And that prospect seems unlikely right now.
So coming into the process, this dynamic seems more like the health care fight than the Gorsuch nomination.
Almost immediately after the GOP released the broad outlines of its tax plan in late September, the Tax Policy Center put out an analysis describing how the proposal gave huge tax cuts to the rich, rebutting the GOP message that the policy would mainly benefit the middle class. I expect analyses of the more-detailed legislation released Thursday to find that it, too, benefits wealthy Americans more than congressional Republicans and the Trump administration want to acknowledge. Nonpartisan economic experts are also skeptical of Republican claims that the legislation’s corporate tax cuts will create huge economic growth and substantially raise American wages.
This dynamic clearly resembles the health care process more than the Gorsuch nomination, where nonpartisan legal experts generally agreed with the Republican contention that Gorsuch was qualified for the high court.
The national media is already voicing skepticism about the Republicans’ arguments that this legislation is not a tax cut that benefits the wealthy, similar to how the press handled GOP claims about Medicaid spending during the Obamacare repeal debate.
And here’s another aspect about the media’s role to consider: There was significant coverage of the Obamacare repeal process in local newspapers, much of it just as negative as national coverage — and at times more precise in detailing how Medicaid cuts would affect specific communities. If certain proposals in the tax plan — particularly ending the deduction for state and local taxes — receive sustained, negative coverage in local media, that could hurt GOP efforts to pass this bill.
On the other hand, some of the proposals in the tax plan, like its increased child tax credit and its overall reduction of tax rates, could get more favorable coverage, particularly in personal finance stories.
This is another dynamic that looks potentially problematic for Republicans, but I don’t suspect the coverage will be as negative as during the Obamacare repeal process.
Here’s where things definitely get better for the Republicans: A wide array of conservative-leaning groups say getting a tax bill passed is a huge priority for them. They are planning to spend millions on TV ads in hopes of pushing members of Congress in both parties to get behind this legislation.
There are liberal groups, like the Center for American Progress and MoveOn, both of which strongly opposed Obamacare repeal, that are likely to mobilize against the GOP tax plan. The question for liberal groups, though, will be whether they can ramp up their members’ intensity to what it was during the health care debate. “Folks this tax battle is Trump’s Waterloo. We can win it. Before anything Mueller does. EYE. ON. THE. BALL,” wrote CAP’s Topher Spiro in a Twitter message on Monday.
So this dynamic looks more like the Gorsuch nomination, with two blocs contesting the issue rather than the one-sided anti-Obamacare-repeal drumbeat, with conservatives potentially more motivated than progressives for the fight.
But Republicans still could have a problem: outside groups that are usually nonpartisan jumping into the fray because tax policy can affect their bottom lines. The National Association of Home Builders announced last week that it would oppose the tax bill, arguing that the changes to tax deductions would discourage Americans from buying new homes. NAHB is promising to help defeat the measure, though it’s not clear if they really have the ability to move public opinion or votes in Congress.
In September, Republicans briefly considered the so-called Graham-Cassidy bill to repeal Obamacare. A CBS News poll on the eve of the planned vote showed that just 20 percent of Americans — and only 46 percent of Republicans — supported the legislation, while 52 percent of the country disapproved. Most of the GOP Obamacare repeal proposals were similarly unpopular.
On tax reform, the numbers are better — but just by a little bit. A recent Reuters/Ipsos poll found that, among those who had heard about the broad outlines of the GOP tax plan, just 28 percent supported it, with 41 percent opposing it and 31 percent saying they didn’t know. About 56 percent of Republicans supported the legislation.
That’s not a great starting place for Republicans. (On the eve of the Gorsuch vote, a Quinnipiac survey showed that about 50 percent of Americans supported his confirmation, compared with 35 percent who did not.) But you could imagine that Republican Party leaders, Trump and conservative groups all consistently praising the bill for the next few weeks could make it more popular among Republican voters, who generally favor tax cuts. And that could rub off to some degree on the broader American public.
Tax reform is the third huge legislative fight of the year. The Republicans won on Gorsuch, and the Democrats prevailed on health care. Which side will be victorious in this case is still very much undecided.
Most of the factors above do not bode well for the Republicans. They also have a bunch of obvious disadvantages: internal divisions on the specifics of tax policy; a very unpopular president attached to the legislation; and a self-imposed deadline that gives them only eight weeks to pass the bill.
On the other hand, they have the margins to pass this without any Democrats. They seem to have a sense of urgency around this bill. And remember, even on health care, Republicans passed an Obamacare repeal effort in the House and were only one vote short in the Senate.
Altogether, the safest thing I can say is that the tax bill has a better chance of passing than the health care bill did — but a worse chance than the Gorsuch nomination.