Pat Toomey, the supply-siders’ field marshal in the Senate

For one thing, by agreeing on a budget, they unlocked the special legislative procedure that allowed them to circumvent a Democratic filibuster. And by allowing for $1.5 trillion in revenue losses in that budget, they created fiscal space for the tax cuts they’d been dreaming of for years: Lower corporate rates, lower individual rates, a shrunken estate tax, and much more.

The budget deal was just one of several Toomey interventions that proved critical to passing the GOP tax bill. “He was like the field marshal, so to speak,” said Stephen Moore, an adviser to top Republicans and supply-side evangelists.

Although he doesn’t have the national status of some of his conservative Senate GOP colleagues, Toomey has worked behind the scenes and used the levers of power in the Senate to enforce and advance supply-side conservatism during the Trump era.

On taxes, financial regulation, Obamacare and free trade, he’s managed to set the right edge for the Senate Republican caucus, all while representing a purple state. He has helped President Trump as much as anyone when Trump has pursued free-market policies.

But, unlike erstwhile supply-side conservatives who have accommodated themselves to populism this Congress, Toomey is not simply following the Trump train down the tracks. Instead, he’s providing congressional resistance to the president’s protectionist trade agenda.

AN AGGRESSIVE PLAN FROM THE START

While other Republicans were still simply finding their footing in the new Trump-dominated landscape, Toomey began drafting a plan for the unified GOP government to undo just about all of President Obama’s domestic legacy.

Toomey, having just won reelection in a come-from-behind victory, plotted for Republicans to undo Obama’s healthcare law, his tax hikes and his Wall Street reform, all without wasting time trying to gain Democratic support.

Even before Trump took the oath of office in January of 2017, Toomey began pressuring his GOP colleagues on the Senate floor to sidestep a Democratic filibuster and undo big provisions of the Dodd-Frank Act, using the procedural tool of budget reconciliation. That tool allows legislation to pass with only a simple majority in the Senate, and Republicans would use the same procedure for health care and tax legislation.

The GOP would eventually fall short of repealing Obamacare or Dodd-Frank. But in both cases, Toomey shaped GOP policy and then later won more modest victories.

Senate Republicans’ doomed Obamacare replacement, for example, contained a major healthcare spending reduction won by Toomey. The bill would have tied federal funding for Medicaid, the low-income health program administered by states, to the number of people in each state. That funding then would have been capped to grow with overall inflation, rather than with medical prices, resulting in huge spending reductions over time.

Amid everything else that was going on at the Capitol at that time, few people registered the significance of what Toomey had done — although conservative columnist George Will, one of the few to take notice, described it as “this century’s most significant domestic policy reform.”

Republicans initially rejected the idea of much lower Medicaid spending. Toomey convinced them, or at least most of them, by arguing that it is simply unsustainable for a spending program to grow faster than the economy in perpetuity.

Ultimately, the GOP failed and the reform wasn’t signed into law. But Toomey would later succeed in repealing at least part of Obamacare as part of the tax bill.

TAX MATH

The tax legislation zeroed out Obamacare’s individual mandate penalties, thanks to an amendment added by Toomey and Arkansas Republican Tom Cotton.

The mandate elimination was also another idea that scared many Republicans, who were fearful of importing the politics of healthcare — a loser — into the push for tax cuts. Eventually the whole Senate GOP bought into the idea after the budget math was explained: Repealing the mandate would mean fewer people signing up for subsidized healthcare plans, creating savings that could be used for tax cuts.

Unlike the Obamacare repeal, the tax overhaul did clear the Senate and reached Trump’s desk, a process kicked off by the Toomey-Corker budget deal.

Before the deal, when Republicans were first turning to taxes after giving up on healthcare, their leaders shared a goal that the tax bill should not add to deficits. Any revenues that would be lost through lower rates would have to be recouped by eliminating a commensurate number of special tax breaks, credits, deductions and loopholes. Politically, it was a treacherously difficult task, one that eluded Congress for a generation.

Both McConnell and House Speaker Paul Ryan had called for such revenue-neutral tax reform. They did so partly for procedural reasons: Under the budget reconciliation rules, a money-losing tax overhaul would have to be made only temporary.

A hurdle emerged when some supply-side Republicans calculated that it would cost the Treasury at least $5 trillion over 10 years to enact all of the tax cuts that Republicans wanted, including the 20 percent corporate tax rate, estate tax repeal, and individual tax reductions.

Republicans could only come up with around $3 trillion in tax breaks they would eliminate, even if they killed the most popular credits and deductions. There was simply no way to close the $2 trillion-plus difference.

In response, Toomey advocated for the budget to allow for $2.5 trillion in deficits. Knowing that a revenue-losing tax cut could not be permanent under reconciliation, Toomey had been campaigning since the spring for a creative workaround. His suggestion was to lengthen the budget timeframe from the typical 10 years to 20 or 30 years — unusual, but not prohibited. A tax cut of that length, even if technically temporary, would be permanent for businesses’ investing purposes.

“We can’t let a fixation on deficit predictions or arcane budget rules get in the way,” Toomey argued at the time.

Corker, meanwhile, a self-described fiscal conservative, wanted the revenue losses to be $0. Seeing the differences between the two senators, McConnell in August directed the two of them, both members of the Budget Committee, to find a compromise.

After several weeks, the two settled on the $1.5 trillion figure. That was the outer limit of what Corker thought could be made up by faster economic growth if they went on to write a tax bill that sparked enormous new business activity. From the Toomey perspective, the $1.5 trillion limit would mean giving up some of the tax cut goals the GOP started out with, but would still allow for a lot.

In the end, the bill would include many, if not all, of the supply-side priorities. By the time Sen. Ted Cruz, R-Texas, held a Capitol Hill press event in mid-September to demand a hard-right tax bill filled with a wish list of cuts, Toomey was already nearing the deal with Corker to achieve what he wanted.

BITING OFF AS MUCH AS POSSIBLE IN FINANCE

In the area of finance, Toomey didn’t get his way. The chairman of the Banking Committee, Mike Crapo, R-Idaho, chose instead to work with Democrats to pass a centrist regulatory relief package, rather than attempt to ram through a partisan rollback of Dodd-Frank.

Nevertheless, Toomey found other avenues to push the envelope on deregulation.

Toomey is “doing as much as he can behind the scenes to wring out every last possible benefit of having full Republican control in Washington,” one financial services lobbyist remarked.

For example, in May, Congress passed and Trump signed a measure ending an Obama-era crackdown on discriminatory auto lending by non-dealer finance companies, a regulatory rollback facilitated by Toomey.

The elimination of the regulation was procedural ingenuity.

The Congressional Review Act allows for Congress to strike down new agency rules through a simple majority vote, without a filibuster. What makes it complicated is that the auto lending regulation wasn’t officially a rule, and it wasn’t new. Rather, it was regulatory guidance that the Consumer Financial Protection Bureau had published in 2013 informing third-party auto financiers that they were subject to laws preventing discriminatory lending.

Republicans had long complained that the 2013 move was an example of Obama overreach, with an agency flouting the law to impose controversial regulations on an industry — auto dealers — that it was prohibited by law from regulating.

In 2017, Toomey found a way to take action. His office requested that the Government Accountability Office issue a ruling whether the CFPB guidance could be treated as rule for Congress’ purposes, an idea exhumed from the legislative record of 2008, when Democrats tried to kill a memo published by the George W. Bush Department of Health relating to the implementation of the State Children‘s Health Insurance Program.

When the GAO said that the guidance did constitute an official rule, Congress passed a Congressional Review Act resolution striking it down as if it were a new rule, with the eager support of the finance and auto dealer industries.

The maneuver raised a prospect that frightened Democrats: Congress could reach deep into agency archives and pull out old regulations to kill.

ALWAYS CONSERVATIVE, NEWLY POWERFUL

Toomey has always been a conservative lawmaker. He amassed a right-wing record as a congressman from 1999 to 2005, and then ran the Club for Growth, an outside group that backs staunch conservatives and opposes primary Republicans who deviate from low-tax, low regulation orthodoxy.

But now he is in a position to wield tremendous influence over fiscal policy, and has the experience to do so. His power could grow even greater next year, if Republicans maintain control and he ascends to the Banking Committee chairmanship, as some members and lobbyists speculate he might.

When Club for Growth president David McIntosh, then representing Indiana, served with Toomey in the House, the two new lawmakers would joke that their conservative efforts were undercut by higher-ups cutting deals in some backroom from which they were excluded. Last year, as Toomey was working on deals on healthcare, taxes and finance, he joked to McIntosh that the backroom is real — and the dealing is even worse than they both suspected.

Toomey “plays the inside game almost better than anybody I’ve ever seen,” said James Wallner, a former GOP Senate aide who now researches legislative procedure at the R Street Institute.

He works, Republicans said, not by trying to position himself in the ideological middle, but rather by staking out his own conservative positions, developing strong arguments for them, and then working to find compromises with his colleagues. He spends more time than most senators thinking through the issues the same way a debater would — testing lines of argument and preparing for rejoinders in order to present a coherent case for his positions — rather than just talking points.

Toomey was one of a group of four senior Finance Committee Republicans who took responsibility for explaining the tax plan to other Republicans and easing their qualms. The group spoke with senators individually, or when they came across a particular issue, the four would sit down with one or multiple members — conservative, moderate, or in between — in McConnell’s office to talk it through.

In mid-November, when Ron Johnson, R-Wis., announced that he would oppose the tax bill because it put small businesses at a disadvantage, it was Toomey who took the lead in working through the hold-up and saving the bill, said Moore. “People don’t realize how close we came to not getting that bill passed,” he remarked.

Johnson, who began his career as an accountant, was holding out for bigger tax breaks for businesses that file as individuals, such as sole proprietorships and partnerships. He feared that without bigger tax breaks, such “pass-through” businesses would be left at a disadvantage to the C corporations that were slated to get a tax rate of near 20 percent.

A C corporation, under United States federal income tax law, refers to any corporation that is taxed separately from its owners and it is distinguished from an S corporation, which generally is not taxed separately.

Toomey was able to speak to Johnson at at technical level. Their offices exchanged many versions of spreadsheets comparing effective tax rates for different business structures and scenarios. Eventually, Republicans found a way to increase the break for pass-through businesses to a size big enough to switch Johnson to a “yes” vote.

CREDIT FOR BEING RED IN PURPLE

The same approach that he’s used in the Senate has served Toomey well in Pennsylvania, a commonwealth much less conservative than his voting record.

“Pat Toomey’s political strengths in Pennsylvania and his success in the Senate really have the same source,” said Jon Lerner, the lead consultant for Toomey’s 2010 and 2016 campaigns. “They both come from his combination of super high intelligence and uncommon personal decency.”

Lerner suggested that Toomey wins support from voters who don’t necessarily agree with his conservative worldview because they see that he comes by it honestly and through study.

His success has been a source of frustration to state Democrats who have been unable to convince voters, so far, that he is as conservative as he is.

“Senator Toomey and his Republican friends have spent the past two years pushing a tax plan that hurts the middle class by increasing their taxes, stripping them of their healthcare and protections for pre-existing conditions, and laying the burden of debt on their children,” said Brandon Cwalina, a representative for the Pennsylvania Democratic Party.

For Republicans, though, Toomey’s ability to amass a hard-right record in a purple state means that he should get extra credit.

“His job is harder because he’s got to do more to sell his views to his constituents,” said Phil Gramm, a former Texas senator and staunch supply-side fiscal conservative.

Gramm, a former academic economist, said Toomey was the congressional leader on free-market orthodoxy, in a group with only Rep. Jeb Hensarling, R-Texas. He noted, though, that Hensarling faces little risk back home in the Dallas suburbs of being seen as too far to the right.

Toomey bought himself a lot of space on economic issues by departing with other conservatives on the gun issue. In the wake of the Sandy Hook Elementary School shooting in Newtown, Conn., he introduced legislation in 2013 with Democrat Joe Manchin of West Virginia to expand background checks. The effort cost him with some right-wingers and risked alienating voters in rural Pennsylvania, but “gave him credibility in the suburbs,” said McIntosh.

TRUMP AT A DISTANCE

Another key strategy in his 2016 race was to keep Trump at an arm’s length, infamously declining to say whether he’d vote for him until right before polls closed.

Perhaps no legislator has done more since to aid Trump’s legislative victories on taxes and banking. But now Toomey is poised for conflict with Trump over his trade agenda.

Last month, the Senate voted 88-11 on a non-binding resolution calling on Trump to get approval from Congress before imposing tariffs using authority supposed to be used for national security purposes. Trump has used that authority to impose broad steel and aluminum tariffs and threaten more levies on trade counterparties.

The vote won’t actually tie Trump’s hands. Republican leaders have avoided forcing members to take a vote defying the president.

Yet the resolution, authored by Toomey and Corker, presents a model for Congress to act if, in the future, Trump goes so far that reluctant Republicans have no choice but to cross him.

“It’s time for Congress to reassert its constitutional responsibility on trade,” Toomey said after the vote. “We’ve crossed the Rubicon,” on Trump’s trade policies, the Pennsylvania senator Politico in June.

It’s a particularly risky stance for Toomey given Pennsylvania’s heritage as a pro-union, pro-protectionist economy. Pennsylvania’s other senator, Democrat Bob Casey, has been more welcoming of Trump’s tariffs and less supportive of legislation to limit Trump’s tariffs power.

“For him to be out in front on things like free trade and sort of rejecting populism in favor of free market economics is a really big deal,” said Jason Pye, vice president of legislative affairs for FreedomWorks, a libertarian advocacy group.

Toomey’s partner on the tariffs legislation, Corker, is from a state that is traditionally more supportive of free trade. Corker’s also retiring after this year, and won’t have to answer for defying Trump to primary voters.

One reason he’s banded with Toomey on the issue, a person close to Corker said, is that they developed a particular regard for each others’ intelligence and improved their working relationship in the long discussions last year during the negotiations leading to the $1.5 trillion tax cut number.