Pedal, Meet Metal
The Republican Turnaround Starts This Week With Health Care and Tax Reform
Yep, it’s been a disastrous start for Trump and the GOP. But that may be about to change—and a lot faster than most people think.
The Republican game plan for summer is on course, despite the fury about Russiagate, staffing in the Executive Branch, exciting results of the four special elections for the House, and the unbreathable Washington climate of distrust, disorder, and dishonor.
While the Democrats storm about the president’s temperament and tweets, and especially as Obama administration veterans tell tales about how they scolded the Kremlin for “meddling” in the election, the winners from Nov. 8, 2016, are beavering away with their majority position and their candid mandate on the economy.
After so many sparkling distractions by Russiagate’s venerated special counsel, Robert Mueller, it is useful to restate the simple, unwavering, conservative Republican ambition.
The first step is to transform into law of the land the American Health Care Act that was passed by the Republican House on May 4.
The AHCA then goes to reconciliation to solve the differences between the House version, which favors the “repeal” side of the GOP-despised Affordable Care Act, and the Senate version, which leans toward the “replace” side of the ACA.
The second step of the GOP plan begins in the reconciliation, and it includes components of the Trump administration’s tax-reform proposal.
There is an opinion under discussion at the White House that, since the AHCA is a fiscal bill, there is no restriction to attaching another fiscal bill to the reconciliation. The Republican plan includes a possibility of attaching elements of President Trump’s business-tax reform.
Larry Kudlow of CNBC reports that the Republican leadership, including Freedom Caucus Chairman Mark Meadows of North Carolina, are in discussion about attaching to the AHCA bill what Kudlow and his colleague Steve Moore of Heritage have dubbed “Three Easy Pieces” of business-tax reform.
“First, cut the corporate tax rate for large and small,” Kudlow explained last week, “including pass-throughs, from 35 to 15 [percent]. Would have an electric effect on investment. That’s large and small. Seventy percent of the benefits go to the wage earners. Middle-class tax cut.
“Second, all new investment would be expensed immediately. Right off. Tremendous.
“And finally, repatriate whatever. Three trillion dollars overseas. American companies bring their cash home. A one-time toll of 10 percent, and that’s all.”
The Republican opinion is that these two bold fiscal steps, health care and tax reform, will satisfy the critical campaign promises of 2016 and will make 2018 a strong showing to return Republican majorities to the Hill.
What can go wrong? The challenge to the GOP plan is the legislative calendar. There are less than two dozen days for the Republicans to hash out the AHCA reconciliation before the August recess. Returning after Labor Day, there are only 64 days left in the year to do the heavy lifting of a proposed Omnibus bill for all of tax reform, business and personal, in addition to renewing the debt limit and passing a budget.
The solution to such a small window for the Republicans is to forgo the August recess in order to solve reconciliation and attach to it the “Three Easy Pieces.” Meadows is a strong advocate of staying in Washington and gaining the much-needed days for debate on health care.
“The entire Republican Party favors the business-tax cuts large and small,” Kudlow told me. “The whole party. In fact a lot of Democrats favor it. Health care was a big disagreement among Republicans. There will be no big disagreement on the tax cuts.”
It is a simple path to success. A small caveat is that the Democrats will object to the AHCA, because of the Congressional Budget Office scoring that could render it a budget-buster.
However, there is a solution under discussion between the Hill and the White House.
“Legally, technically,” Kudlow explained of the planning in GOP leadership, “you can attach the tax-cut bill to the health-care bill. They’re both fiscal bills, OK, that’s the key point. You do not have to use the CBO estimates for the economy… You don’t have to use the 10-year scorecard window. Pat Toomey of Pennsylvania is proposing 20 years. That will take care of all the revenue needs. All of them.”
The plan is now entirely in the hands of Republicans, who have the votes, the resolve and the skill to succeed without need of any Democratic opinions or votes.
The Democratic leadership is completely informed of the Republican game plan.
After last Tuesday’s efficient Republican victories in Georgia and South Carolina, disgruntled Democratic members of Congress have spoken out against leaders such as Minority Leader Nancy Pelosi for devoting so much energy and time to disdaining Trump instead of developing an answer to the GOP fiscal dyad of health care and taxes.
Joe Rago of The Wall Street Journal editorial board told me two weeks back that the GOP Senate was enjoying the calm of constructing its version of AHCA while the Democrats and the major media were frantic on the front pages about Trump and Putin.
The latest anxious Democratic voice is Senate Minority Leader Chuck Schumer of New York, who can see the game getting away from him as surely as he can read the melodramatic headlines about Russiagate’s hypothetical colluding, blackmailing, hacking, obstructing, interfering, meddling.
“Democrats need a strong, bold, sharp-edged, and commonsense economic agenda,” Schumer declared on TV, adding “It’s what we are missing, and it’s not going to be baby steps—it’s going to be bold.”
The irony is that Schumer is describing exactly the GOP plan to win by Labor Day.
Just in case Schumer’s frustration with the Democratic obsession with Trump was not obvious, the New York senator added, “When you lose an election, you don’t blame other people. You blame yourself.”