If there’s one thing that Republicans can agree on, it’s tax cuts. On lower taxes, there are no regional disagreements, no ideological dissenters, no schismatics jockeying for control of the party. On taxes, Republicans all sing from the same hymnbook written by the sainted Reagan, in broad harmony.
Why, then, do their stumbling efforts on taxes look so eerily like the shambolic process of repealing and replacing Obamacare? Why does it seem so possible that the whole thing is going to end the same way: with Republicans slinking away in defeat from one of their core campaign promises?
On Tuesday, House Republicans announced that their tax bill, which had been expected Wednesday, would be delayed until later in the week. It did arrive on Thursday … with the caveat that it may be rewritten over the weekend.
These sorts of last-minute announcements are not exactly unheard of during the messy legislative process. But the list of things Republicans dithered over seems remarkably long. As of Wednesday, they still hadn’t agreed on what to do about the state and local tax deduction, what to do about 401(k) accounts, or how to keep wealthy individuals from abusing the new special low rate for pass-through entities. Which is to say, they are agreed on the tax cuts; what they can’t seem to do is agree on how to pay for them.
Why such difficulty? One story we can tell is structural: It’s harder to do tax cuts now than it was in 2001, or the 1980s. Reagan got his tax cut through by dint of the famous “magic asterisk” – savings to be named later. Bush was lucky enough to push his tax cuts at a time when we still had a budget surplus. Thus, both of them got to focus on the fun stuff – giving taxpayers back their money – while avoiding the hard questions: Who, exactly, are you going to spend less on to make up for the lost revenue?
Today’s Republicans do not have such luxury. The budget is not in surplus, in part because of the aforementioned Bush tax cuts, but mostly for other, structural reasons. And we all saw how the magic asterisk played out in the early ‘80s, so they’ll find it hard to get away with that one again.
Meanwhile, bipartisanship has collapsed, so they have neither hope nor interest in making a deal with the Democrats, who are likely to filibuster any attempt to cut taxes. To avoid the filibuster, they’ll have to push their tax bill through a budget process called reconciliation, which further restricts their options – for example, the bill cannot increase the deficit beyond the 10-year forecast window.
That structural account has some truth to it: Today’s Republican tax-cutters really do have it harder than their forebears did. But that doesn’t explain why this process seems so … haphazard. They are not quibbling about minor details, or even one big stumbling block; one day before the bill was supposed to be out, a number of its biggest and most controversial provisions were still simultaneously under negotiation.
But we can also tell a different story about these facts: a story about how much presidential leadership matters.
When Trump was elected, I found myself asking old Washington hands a question: How well could the government run itself without Trump’s participation? He had shown little interest in the policy parts of the presidency during the campaign, and it seemed unlikely that he was suddenly going to develop a governing philosophy and a late-life interest in the contents of wonky briefing books. Could he just end up as a figurehead, attending signing ceremonies and ribbon-cuttings, while the real business of government went on without him?
The response was derisive laughter. American government, they said, didn’t and couldn’t work that way. I reserved judgement until I saw how things developed, and having seen it, I concede that they were correct. The absence of leadership from the president himself – shaping priorities, guiding the process, using his political capital to secure a deal and sell it to the American public – has left a power vacuum at the heart of the legislative process. And that vacuum threatens to suck even the most agreeable, obvious, and dearly held Republican ambitions into the void.
Even when the president wants to do a tax plan – as he clearly does – he is insufficiently focused on the process to assist in making it happen. His assistance appears to consist of occasionally tweeting about things he would not like to find in the bill, things that would probably be better communicated in private. Meaning he will have a hard time coming out in favor of some provision that he was days earlier excoriating. This will complicate the one job he must do, if Republicans want to get tax cuts through: convincing the public that it’s a good idea.
Republicans are struggling on taxes for the same reasons they’re struggling on everything else: They are less of a party than an uneasy alliance of warring factions with little in the way of a common cause. Unless they find some leadership to hold them together, they are likely to end up where such alliances usually do: broken on the wheel of history.
Megan McArdle is a Bloomberg View columnist. She wrote for the Daily Beast, Newsweek, the Atlantic and the Economist and founded the blog Asymmetrical Information.