In the spring of 1991 President George H.W. Bush looked unstoppable. Following Operation Desert Storm his approval rating hit 89 percent, the highest ever recorded by Gallup. Yet, that wasn’t enough. What did Bush in, as Clinton adviser James Carville famously quipped, was “the economy, stupid.” Team Clinton wagered that the sluggish recovery from the 1990-1991 recession would loom largest in the minds of voters. They were right.
Today, as Republicans struggle with an internal civil war and identity crisis the tax bill and a growing economy may be their saving grace. A recent Quinnipiac University Poll found that Americans have never felt more positive about the economy. According to Quinnipiac, 63 percent of American voters say the economy is “excellent” or “good,” while 34 percent say it is “not so good” or “poor.” This was the highest positive rating for the economy since Quinnipiac began asking the question in 2001.
However, the poll also suggested that voter attitudes about the economy aren’t translating into public support for President Trump. Voters disapprove of Trump’s handling of the economy by a margin of 51 to 44. Meanwhile, the tax bill itself is hardly wildly popular. In fact, Harry Enten at FiveThirtyEight.com described it as “historically unpopular” compared to other tax packages since 1981.
Still, Republicans believe Trump will eventually assume psychological custody of the economy in the minds of voters (all incumbent presidents receive a disproportionate share of the credit or blame for the economy’s performance). At the same time, Republicans hope voters will credit the tax bill with more money in their pockets. If these realizations converge the Carville Rule may reign. In politics, economic growth, for better or worse, covers over a multitude of sins.
These realizations are by no means inevitable. Not only is the tax bill unpopular, polls by Marist, the WSJ/NBC and CNN all suggest voters believe the “wealthy” are getting a better deal than the “middle class” by a nearly three to one margin.
Even though center-left sources like the Tax Policy Center estimate the average family will save $1,610 in 2018 (see reputable tax cut calculators from the New York Times and MarketWatch) the GOP’s perception problem may not be fixed by increasing paychecks or account balances. Early in the tax reform process Democrats made a decision to invest in an alternative narrative rather than an alternative bill. Democrats have been ruthlessly devoted to their demagogic narrative. Republicans will have to make a substantial investment of time and resources in order to prove to middle class voters they should be credited with improving the economy and putting more money in their pockets.
Beyond the fact that the bill really does cut taxes for the middle class, Republicans have two other reasons to be optimistic.
First, the passage of the tax bill was a silent coup for the Republican wing of the Republican Party. House Speaker Paul Ryan (R-WI), the party’s intellectual and policy leader, helped bring together the party’s traditional supply-siders and nascent “reformocons” around a bill that included the right balance of tax cuts for businesses, corporations and families. Ryan effectively coordinated with the White House and Senate to get the bill over the finish line. In so doing, Ryan and Republicans effectively defined Trump’s “economic nationalism” on terms very favorable to traditional conservatives.
Now that tax reform is Trump’s singular legislative accomplishment, his “America first” themes have more in common with Reagan/Kemp aspirational and opportunity-based conservatism than Steve Bannon’s incoherent neo-isolationism. The tax bill defined “economic nationalism” as growing our economy and improving America’s global competitiveness rather than offering a symphony of dog whistles and conspiracy theories that do nothing to stimulate growth and help families and workers displaced by new technologies and globalization.
This silent coup was no trick, grand scheme or manipulation. It represented the triumph of ideas that work in the real world. No one seems happier about this development than Trump himself.
Second, Republicans are better positioned than they may seem because politics is about contrast and choices and Democrats have little to offer. While the Democrats’ investment in a narrative war shouldn’t be underestimated, Republicans have the high ground when it comes to substance and ideas. They have a law. Democrats didn’t even offer a plan.
Instead of offering an alternative, “resistance” warriors like U.S. Senator Elizabeth Warren (D-MA) produced a snarky class warfare video with U.S. Senator Al Franken (D-MN) about the bill. Sanders, for his part, bizarrely argued that Republicans were “looting the Treasury” by letting people keep more of their own money.
One liberal commentator, Andy Ostroy of the Huffington Post, said U.S. Senator Tim Scott (R-SC), who is black, was being used as a prop at a White House event celebrating the bill’s passage even though Scott played a central role in helping pass the bill. Ostroy later apologized.
The Left’s attacks against Scott, this year’s recipient of the Jack Kemp Foundation’s Kemp Leadership Award, are troubling, and illuminating, because Scott is responsible for ensuring the final package included the “Investing in Opportunity Act.” The bill is designed to help the more than 50 million Americans distressed communities by allowing companies to defer capital gains in exchange for investing in distressed communities.
The bipartisan Investing in Opportunity Act is a narrative disruptor for Democrats who want to portray Republicans as anti-poor. One of the bill’s original sponsors is Cory Booker (D-NJ) who said in a joint statement with Scott last year:
“The Unites States is filled with the world’s brightest innovators and an unmatched entrepreneurial spirit. However, millions of Americans live in communities facing the crisis of closing business, lack of access to capital, and absent entrepreneurship. The Investing in Opportunity Act is a new approach to connecting struggling communities with the private investment they need to thrive.”
Yet, instead of supporting tax reform or working in a bipartisan fashion to improve the bill, Booker offered paint by numbers partisan pabulum. In a September statement Booker said: “The Trump tax plan is great for people like Donald Trump—the wealthy and the well-connected. It’s unjust and unfair for everyone else.”
The problem isn’t that Republicans are partisan. The problem is Democrats are becoming an extreme party of no ideas. No Democrats supported tax reform in 2017. In 1986, however, 33 Democratic Senators voted for tax reform, which passed the Senate 74-23. The policy goals didn’t change. Democrats changed.
The Washington Post reported in 1986:
Sen. Bill Bradley (D-N.J.), one of the first advocates of lower rates and fewer breaks, said, “As an unbiased observer, I’d say this is the most significant tax bill since 1954 and maybe since 1913,” when the income tax was created.
Today, Bradley and Blue Dog Democrats like Lloyd Bentsen and Fritz Hollings, who also voted for the tax bill in 1986, would be pariahs. Bradley and Booker have little in common other than being from New Jersey. Progressive fundamentalists like Elizabeth Warren and Bernie Sanders are setting the terms of the debate.
The good news for Republicans is that a party that constantly plays internal one-upmanship with Warren and Sanders isn’t well positioned for victory. Making rich people poorer does not make poor people richer. The Democrats’ macabre version of trickle down economics is to nourish the poor by bleeding the rich. This has never created prosperity. Democrats are offering not a transfer of wealth from rich to poor but a transfer between elites. Many modern Democrats are more interested in gaining power than eliminating poverty.
The Left also offers feigned moral outrage about Republicans blowing a $1 trillion hole in the deficit with their tax plan. What they don’t mention is Sanders’ agenda he campaigned on in 2016 would have cost $18 trillion, nearly the equivalent of our $20 trillion national debt. Instead of condemning Sanders’ spending spree Democrats opted to pander to Sanders’ base.
Voters also need to be reminded that the Obamacare individual mandate tax penalty, which the Republican tax bill eliminated, was disproportionately hurting people who earn less than $50,000. Meanwhile, Obamacare itself has dramatically increased premiums for middle class families, especially those earning over $80,000. That’s what Democratic compassion produces for the middle class.
Contrasts matter. In 2018, Republicans will have a record to run on. Democrats will have a record to run from.
A lot can happen between now and November 2018. But if the economy continues to do well, and if Republicans can convince voters the Republican tax bill saved them an extra mortgage (or Obamacare premium) payment or two, Republicans may be far more resilient than many expect. A wave could be forming for Democrats, but the Carville Rule may well carry the day for Republicans.