Divide and Conquer
Obama Can Best Weaken the GOP by Courting Its Traditional Business Backers
The president’s proposal to cut the corporate rate may go nowhere, but it does drive yet another wedge between the GOP and its traditional business base, writes Michael Tomasky.
So the president came out yesterday with another economic proposal that isn’t going anywhere. I don’t mean to sound snarky. Some people are snarking about it, or lamenting it anyway. But I see it differently. At this point it goes without saying that anything Obama proposes is DOA. So he can’t get that done. But he can get something else done: Pry the nutso GOP away from its traditional constituencies one by one, so that all they’re left with is the Tea Party lunatic fringe. It’s the only play Obama really has at this point, and while it might not pay dividends for him, it will help the Democrats running in the midterm elections, the next president, and the country over the long term.
Yesterday’s proposal was as follows: Obama offered to lower the corporate tax rate to 28 percent (from the current 35 percent) in exchange for some infrastructure investments. Republicans have been clamoring for a lower corporate rate since forever. Even many Democrats support this—the U.S. corporate rate is among the developed world’s highest, and the idea that the rate should be lowered in exchange for closing some capacious corporate loopholes has long been an idea that a lot of Democrats are fine with. But fundamentally, it should be something that gets Republicans’ juices flowing. They’re the party of corporate America, right?
And not only is this GOP-friendly. Even on the investment side, the proposal is geared toward projects that the Republican Party hasn’t shown utter contempt for in the past. As Jared Bernstein noted yesterday, the investment is directed almost wholly away from the public sector—no money for teachers, who to Republicans are just another group of bought-off Democratic voters. As Bernstein summarizes the package: “We’ve got a big drop in the corporate rate that doesn’t add to the deficit, for which the Republicans have only to swallow a paid-for jobs program in areas they’ve historically supported.”
Sounds pretty damn reasonable. But none of this is likely to matter. It’s the same old story: If Obama’s for it, they’re agin’ it. Especially if it’s tied to the kinds of socialistic demands for infrastructure investment that have long been backed by the United States Chamber of Commerce, among other socialist organizations. So the chances of a deal are slim to none. Or none to negative.
There are those who might say that it just makes Obama look impotent to keep proposing these things only to the see GOP say, Are you kidding? I guess they have a bit of a point. But I think his only strategy by now is to put offers on the table that make the Republicans look increasingly extreme and unreasonable, so that the American people see more and more clearly what the problem is.
And not just the American people in general—in this case, corporate leaders in particular. Presumably, corporations are going to support Obama’s plan by and large; hard to see why they’d oppose something that lowers their taxes (although it’s true that specific companies in specific areas will fight to retain their loopholes). Corporate leaders have had plenty of patience with Mitch McConnell. But how much patience are they going to have with a McConnell who blocks a tax cut for them?
Maybe still a lot, I don’t know. But this is now the only way left to penetrate the GOP’s wall of obstruction: Drive the wedge right between the congressional GOP and its usual power centers. Corporate America wants immigration reform. It wants lower tax rates, and it (or a large majority of it) will happily accept infrastructure reform as part of a package. Obama wants those same things. The Republicans are against them. Surely at some point, some corporate leader or leaders will step forward and say enough. Even that probably won’t make congressional Republicans move; they are married to the most rabid section of their base, and they are not going to budge.
Let them stay there. Let them stay there through immigration reform, refusing to pass anything, or anything meaningful and serious. And now, let them stay there in opposition to the lowering of corporate tax rates. If that isn’t material for midterm campaign, and for the next presidential campaign, then nothing is.
It’s a tragedy that the country has to be dragged down to this troglodytic level. McConnell is a nihilist who cares nothing about outcomes, just about being reelected himself and trying to win a Republican Senate majority. (But to what end? Just to block more stuff?) John Boehner is a follower, not a leader. But I believe and take comfort in this: They just can’t carry on this way forever. You can’t block background checks supported by 85 percent of the American people; some kind of action on climate change, which large majorities also support; comprehensive immigration reform, which the people (and the business elites and evangelical leaders) back; and corporate tax reform paired with investment and not have it all come back and bite you someday. If Obama can’t get them to the table, he can at least spent three years dangling carrots in front of them, letting them say no, and making sure the American people see.