Expect to see the word “crumbs” a lot this year as Congress heads into the first off-year elections since President Trump took office.
It’s the favorite shorthand term for Democrats such as House Minority Leader Nancy Pelosi to describe the bonuses and other benefits workers will receive as a result of the Republicans’ tax legislation. According to the party, they are little more than paltry leftovers from the tax cuts that wealthy individuals and corporations will see.
Trump and his allies counter that the “crumbs” are anything but, and they’re looking forward to talking about just how much extra money voters will be receiving from the tax cuts.
“Since that tax cut was enacted, more than 1 million workers have already received a tax cut bonus — something that, frankly, nobody even thought about. We didn’t think about it. Nobody thought about it. We just knew a lot of good things were going to happen,” Trump told reporters Jan. 10. Nearly 180 companies have given their workers bonuses or pay raises, crediting the cut in the corporate tax rate from 35 percent to 21 percent.
Democrats have been openly contemptuous of the corporate largesse. “In terms of the bonus that corporate America received versus the crumbs that they are giving workers to kind of put the schmooze on is so pathetic,” Pelosi told reporters Jan. 11.
Whose economic narrative will win out in the November elections will likely determine whether the Republican congressional majority will weather what is looking like a rough year, thanks to a wave of retirements and Trump’s dismal approval ratings.
Republicans have been on the defensive regarding tax cuts and pocketbook issues for years. They struggled to stop former President Barack Obama’s move to let President George W. Bush’s tax cuts expire. Meanwhile, Democratic calls for a higher minimum wage have gained major traction in the states.
When congressional Republicans passed their tax legislation in December, they had no Democratic support. Trump’s allies argue the opposition made a strategic mistake as the GOP now owns a recovering economy, which they will be able to use as a campaign issue. Gallup polling shows that the economy remains voters’ top issue, with jobs coming in third.
“Democrats went so far out on their attacks on the tax cut bill. Instead of saying just that it was weighted to the rich, they argued there was no tax cut component at all for voters,” said Grover Norquist, president of the conservative Americans for Tax Reform. “Instead, most people will see a tax cut every two weeks for the rest of the year … Democrats will have a hard time reversing themselves and saying these are somehow Obama’s doing.”
About 80 percent of taxpayers will take home an estimated extra $2,100 in 2018 under the new IRS withholding tables, according to the nonpartisan Tax Policy Center. The adjustments to withholding are expected to start appearing in workers’ paychecks in February.
In addition, nearly 180 corporations have announced they are giving bonuses to their employees — bonuses that they have said the tax cut made possible. Major employers such as Walmart, Bank of America, AT&T, American Airlines, and Comcast are giving workers payouts of at least $1,000. Fiat Chrysler will 60,000 workers $2,000 checks.
Some companies also are giving permanent raises, again saying the tax cut made them possible: Walmart will raise its minimum pay level to $11 an hour. SunTrust, Wells Fargo, and Capital One will raise theirs to $15.
All told, an estimated two million people at about 160 companies large and small will see some form of boost their employers have directly tied to the tax legislation.
That is on top of an economy boasting a 4.1 percent unemployment rate, down from 4.8 percent in 2017, according to the Labor Department. The tight labor market is finally raising wages, too, with compensation costs rising 2.5 percent over the same period.
However, voters might forget the bonuses, which are one-time checks, as well as the change to their withholding by the time the election rolls around. Democrats are quick to point out that during the debate over the tax legislation, Trump promised that the bill would translate to raises of $4,000, so the benefits in most cases still fall short of that.
A statement put out by the Democratic National Committee pointed to reports that Comcast laid off 500 workers. AT&T, according to its union, the Communication Workers of America, let go of 4,000 employees, though the company has said it will hire 7,000 more because of tax reform. The same day the DNC released the statement, Walmart announced it would close 63 Sam’s Clubs and potentially lay off thousands of employees.
“Despite Republican claims, most corporations are not responding to the Trump tax [bill] by raising wages or handing out bonuses. And the handful that have announced one-time bonuses only committed a small fraction of their savings, while many have even laid off workers,” said DNC spokesman Daniel Wessel.
Democrats think that returning the debate to the minimum wage — the federal rate is just $7.25 an hour, while states such as California and New York are raising theirs to $15 — will have greater resonance with voters.
“Instead of giving relief to the working families who need it the most, as he had promised, that tax cut bill gives [a] massive permanent tax cut to the wealthiest Americans and the largest, most profitable companies in exchange for temporary and modest cuts for some individuals,” said Sen. Kirsten Gillibrand, D-N.Y., who is up for re-election this year and is being talked about as a potential challenger for Trump in 2020.
Just how much benefit the taxpayers are getting from the cut is a debate that the Republicans say they are comfortable to have. “If Democrats want to hold a grudge against American workers and families for finally getting ahead, that’s a choice they’ll have to live with,” said a GOP congressional aide.
