Republicans’ tax overhaul bill is set for final passage with no Democratic votes in the Senate or House, raising the risk that Democrats will undo parts of the legislation if and when they return to power.
In that respect, this week’s passage of the GOP tax bill parallels former President Barack Obama’s enactment of healthcare legislation in 2010, which garnered no Republican votes in the final version. The partisan bill helped create the Tea Party and gave rise to the Republican majority in Congress. With Tuesday’s vote, the GOP is now poised to undo a major part of Obamacare by zeroing out its individual mandate.
By pushing the tax bill through in a partisan, rushed process, Republicans “have guaranteed significant instability in U.S. tax policy for many, many years to come,” said Oregon’s Ron Wyden, the top Democrat on the Senate Finance Committee.
Sen. Chris Van Hollen, D-Md., warned that the bill would create tax cuts for big corporations while raising taxes on the middle class. “We don’t want to see that happen,” he said. “We’ll have to change some things.”
Speaking right after the House voted to pass the tax bill, House Speaker Paul Ryan, R-Wis., rejected the possibility that the measure could come under siege the way Obamacare did.
“I think the comparison’s a non sequitur, because the Affordable Care Act proved to be extremely unpopular,” he said. “The Affordable Care Act proved to reduce healthcare choices, to raise premiums, to make healthcare unaffordable. This is going to do the opposite. This is going to grow the economy, it’s going to increase paychecks, it’s going to increase take-home pay, and that, I believe, will be very popular.”
But Rep. Richard Neal, the ranking Democrat on the House Ways and Means Committee that is charged with oversight of taxes, suggested that the revision of the tax code will be vulnerable because of “a series of mistakes” Republicans made in drafting it to lessen its unpopularity, specifically citing the last-minute lowering of the top individual tax rate from 39.6 percent to 37 percent.
Neal also referenced the projections that the tax cuts are likely to add hundreds of billions of dollars to federal deficits in the next few years. The revenue losses from former President Ronald Reagan's 1986 reform also ultimately led to the legislation being partly rolled back after several years.
Senate Majority Leader Mitch McConnell also acknowledged the possibility of a reversal.
"Let me tell you what terminates these tax cuts. The Democrats taking the Congress next November would turn this into a very short tax bill," he said.
While the top Democratic taxwriters declined to say Tuesday that they would seek to repeal the tax bill or undo its major provisions, outside liberal activists who have ginned up opposition to the GOP tax push didn’t hesitate.
“I think in the years ahead, Democrats would be wise to treat this as something that should be rolled back and repealed,” said Tim Hogan, a spokesperson for Tax March, a group that has organized resistance to the bill. “That it is a ‘Trump tax’ that has energized the grassroots, and we should continue to harness that energy going forward.”
Hogan said that the movement will try to model its efforts on the activism of the Tea Party in 2010.
"I look forward to the day — and it will come -- that we reverse this devastating piece of legislation and bring real tax reform that truly helps working families and small businesses across the country," said Sen. Cory Booker, D-N.J., in a post-vote statement.
Although his association with the tax bill has deterred Democrats from joining with Republicans, President Trump did make a sustained effort to at least pressure Democrats on taxes. Over the past few months, he’s traveled to the home states of Democratic senators up for re-election in 2018 to talk taxes, including Claire McCaskill of Missouri, Joe Donnelly of Indiana, and Heidi Heitkamp of North Dakota.
It's a tricky gambit for the president, whose job approval ratings during his first year in office have not been very favorable. And the way the tax bill was written — including aggressive tax cuts for businesses and high income earners — shows it was designed to please the furthest-right members of Congress, not centrist Democrats.
“I was an easy pickup. Very easy pickup,” said Sen. Joe Manchin, the West Virginia Democrat with a voting record similar to that of centrist Republicans, said in a Politico podcast. “And a couple, two, three other Democrats would have been easy pickups, if they had just made an effort.”
Democrats agreed that the bill was structured not to appeal to their members who might have been tempted to go along with a GOP tax bill, as some were, for instance, with former President George W. Bush’s 2003 tax cuts.
“Once the decision was taken to make it a partisan bill, it collapsed everything,” said Neal. “So the fact that we held on here, I think, is pretty significant.”
From the perspective of conservatives, though, passing a bill with Republican votes was the better option.
Grover Norquist, the anti-tax activist and head of Americans for Tax Reform who has advocated for a tax code overhaul for decades, said that he was pleased that the bill would pass with no Democratic support. There are no moderate Democrats left, he reasoned, meaning that bargaining to gain Democratic votes by changing the bill would have entailed ceding too much.
Instead, he suggested that the new tax provisions would prove politically advantageous for Republicans, citing particularly the new special tax break for businesses that file through the individual side of the tax code, a category that includes millions of small businesses. “This is a newly politicized piece of the economy,” he said of the “pass-through” businesses like sole proprietorships and partnerships.
“Too many people have been given a taste of freedom and a taste of lower taxes,” Norquist added.
Republican lawmakers, too, said they were confident that the currently unpopular bill will prove to be a political asset once businesses and individuals start getting the tax cuts.
"If we can’t sell this to the American people, we ought to go into another line of work," said McConnell.