Over the summer, congressional Republicans unsuccessfully used an opaque process to pass legislation that would have taken health care away from millions of Americans. Today, with failed Obamacare repeals in the rearview mirror (at least for now), they have again teamed up with the Trump administration to cut taxes on the wealthy, corporations and foreign investors.
It does not seem that they learned any lessons from the health care failures: Congressional Republicans insisted on calling the same play again on taxes using the same process, bolstered by spurious and misleading facts despite little public support.
First, majority leaders in Congress are using reconciliation to take a one-party approach for tax cuts that allows passage of a bill with only 50 percent plus one vote in the Senate through an expedited process. Like on health care, congressional Republicans opted for the reconciliation process to get a bill to President Donald Trump’s desk without relying on any Democratic votes.
By eschewing Democratic input, the majority has abandoned any pretext that this tax bill will mirror the bipartisan tax reform of 1986, which garnered 74 votes in the Senate. Instead, their approach is much more akin to the 2001 and 2003 Bush tax cuts, which primarily benefited the wealthy while adding huge amounts to the deficit.
Next, House and Senate leadership are following the failed health care playbook of keeping legislation secret and limiting debate over proposed bills. Even though health care represents one-sixth of the U.S. economy, they rushed legislation through with little — or no — time for analysis.
In the House, the actual legislative language on health care was released and voted on in less than 10 days. Both chambers went months without public hearings with experts providing testimony until the Senate just held one in late September. In 1986, it took more than two years to accomplish on taxes what Congress is attempting to do in less than three months.
Taxes directly and indirectly affect every household and business, but it is not apparent that committee chairs will even hold hearings on their tax legislation to consider the wide-ranging implications. The tight schedule favored by House Speaker Paul Ryan for swift consideration and passage of the bill suggests not. Congressional leaders’ sole intent again seems to be creating legislation that can garner enough votes to pass rather than formulating sound policy.
For health care, Ryan and Senate Majority Leader Mitch McConnell used a centrally managed process of using special enticements for support on health care that earned names like the “Buffalo Buyout” and the “Polar Payoff.” This time, leadership included a provision in the budget resolution to allow the oil and gas industry to drill the Arctic National Wildlife Refuge potentially to secure support from independent-minded Alaska Sen. Lisa Murkowski.
Special interests like these are what make passing tax reform where tax burdens get shifted far more challenging than tax cuts where burdens get lifted. For this reason, proponents tout benefits like reductions in corporate tax rates and repeal of the estate tax, but they minimize other changes needed to offset those cuts.
For example, the elimination of several itemized deductions is expected to raise $1.25 trillion in revenue over 10 years. Ending deductions like the medical expense deduction can have substantial financial effects on those who would have taken them.
Overpromising and underdelivering was a common theme during the Obamacare repeal and now in the tax cut debate. Trump and his administration guaranteed the health care bill would be “every bit as good on pre-existing conditions as Obamacare” and “nobody will be worse off financially.” But the Congressional Budget Office found both assertions to be false.
On taxes, the Trump administration is trying to resurrect the long-disproven trickle-down economics argument that tax cuts for the wealthy will help everyone else. The most egregious example is a report from the White House Council of Economic Advisers estimating that the average household would earn $4,000 to $9,000 more annually as a result of corporate tax cuts, but even the economist whose research was cited said the report “misinterprets” and exaggerates his work.
Americans have taken notice of the ongoing effort to push bills that further benefits those who are well off at the expense of everyone else. Only 20 percent of respondents to a recent CBS poll supported the attempts to repeal Obamacare. And even before the House GOP lawmakers released their tax bill, just 25 percent in a poll said Trump’s tax reform plan was a good idea.
It is clear the American people oppose legislation for special interests created in backroom deals. If tax cuts don’t pass, maybe the congressional majority and the Trump administration will try something other than trying to ram through unpopular ideas for the next big agenda item.
Andrew Schwartz is an economic policy analyst at the Center for American Progress.
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