There are two ways of looking at what happened in the U.S. Senate late Friday night, and both are largely correct.
The first is that it was a shocking violation of norms and democratic principles – a major tax bill essentially rewritten by lobbyists on the fly, with little in the way of hearings and nothing in the way of expert testimony, rammed through with a fusillade of lies and distortions in the dead of night after key senators were bought off with assurances (e.g., Medicare cuts, health care stabilization and a DACA fix) that will likely never come to fruition.
The second is that this is a natural extension of the raw cynicism that has defined Republican politics over the last several years. To wit, after the vote passed – at roughly 2 a.m. – Senate Majority Leader Mitch McConnell, the most nakedly cynical man in modern political history, told reporters, contrary to all of the evidence right in front of your eyes, that "this was done through the regular order," a lie so brazen that, had it been proffered under different circumstances, would almost be impressive. After all, this was a nearly 500-page bill – with inscrutable handwritten scribblings in the margins, no less – that was handed out to members of Congress just hours before the vote. When Democrats made a motion to adjourn for the weekend, so Congress and the public could see what was about to happen, Republicans said no.
Then, on Sunday morning, McConnell told ABC's This Week, "I'm confident this is not only revenue-neutral to the government, but actually it's very likely to be a revenue producer."
In other words, corporate tax cuts will generate so much economic activity that it will more than make up for the $1.4 trillion hole the bill is punching in the budget over the next 10 years. Republicans have been insisting upon this fairy tale for months, absent any sort of evidence. Indeed, the most GOP-friendly analysis still predicted a $500 billion increase to the deficit; others, including from the Joint Committee on Taxation, Congress' nonpartisan scorekeeper, argued that number would be much higher. Indeed, shortly after the rushed vote, the JCT released its final score: Even accounting for growth, the tax bill would cost $1.45 trillion.
The idea that drastically lowering the corporate tax rate will somehow infuse the economy with so much energy – though the economy has been adding jobs for 92 consecutive months, the country is nearly at full employment, and corporations are seeing record profits and sitting on massive stashes of cash – that it will grow by leaps and bounds is an article of blind faith, not supported by data or history or common sense. Rather, it's a lie Republicans – including Sen. Marco Rubio – have been telling themselves and their constituents, so that they can still claim to be deficit hawks.
As Douglas Holtz-Eakin, the former head of the Congressional Budget Office, wrote in the Washington Post this weekend: "Never has a dynamically scored analysis concluded that a proposal would 'pay for itself with growth,' and no serious economist would make such a claim. At best, according to the prevailing consensus, the positive feedback effect from tax cuts would recoup in the range of 25 to 35 percent of the cost."
And that's important for what's coming next, assuming the House and Senate's tax reform bills eventually become law: All of a sudden, ballooning deficits will again be a major concern, and Republicans will suddenly be scolding us on how we just can't afford Medicare or Social Security or Medicaid or the Children's Health Insurance Program, let alone any big infrastructure bills.
But let's leave the deficit alone – as Dick Cheney once said, "Deficits don't matter" – and instead assess the Senate's bill on its own terms. Here is, in one sentence, what it is: a massive transfer of wealth from the middle and working classes to the wealthy, which will exacerbate the defining problem of our times – income inequality – to appease the Republican Party's donor class. That's it.
Sure, most taxpayers will see a cut next year – modest if you're in my income bracket, much larger if you're in David Siegel's. But over the next few years, for those earning $75,000 and below, that tax cut steadily evaporates. By 2027, nearly all of these taxpayers will actually face increases. Corporations, meanwhile, will see their massive tax reductions made permanent, even while income tax cuts end.
Along the way, the individual mandate will be repealed – thus causing some 13 million fewer people to be insured – and health care premiums will increase. For good measure, fetuses will now be recognized for tax purposes, churches will be able to preach politics from the pulpit, and oil and gas companies will be allowed to drill in the Arctic National Wildlife Refuge, because why not. Oh, and while they were at it, they threw a bone to Hillside College, a private Michigan university favored by Education Secretary Betsy DeVos that will be exempted from a tax on endowments, and parents of private-school kids, who will be allowed to use a tax-free savings account to pay tuition.
Ultimately, Mitch McConnell recognized something that Democrats haven't: Process complaints don't matter. Deficits don't matter, either. When passing the Affordable Care Act, Democrats went through months upon months of hearings, testimony, debate, amendments and rewrites; Republicans still complained that Obamacare was jammed down their throats. The Obama administration went out of its way to make the bill deficit-neutral, raising taxes on high earners to subsidize health care for the poor and head off Republican complaints about rising debt. The same thing played out with the stimulus. Democrats left it below what was really needed to assuage the self-appointed deficit hawks, and paid dearly for it in the 2010 midterms, when the economy had yet to roar back to life.
The tax reform bill is a victory for Republicans in desperate need of a legislative win. It's also a victory for the rich at the expense of everyone else. But more than that, I think, it's a victory for cynicism.
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