GOIN’ IT ALONE

How Donald Trump Somehow Failed to Sell Massive Tax Cuts to Democrats

The president has tried sticks and he’s tried carrots. Nothing has worked and it might not matter.

Photo Illustration by Lyne Lucien/The Daily Beast

In early September, President Donald Trump traveled on Air Force One from Washington, D.C., to North Dakota. The official purpose of the trip was to sell his party’s massive tax cut package to the public. But his audience was just one person.

Accompanying Trump on the trip was Sen. Heidi Heitkamp (D-ND). A moderate Democratic lawmaker up for re-election next year, Heitkamp was an obvious target for the White House. And during his speech, the president did his best to woo her.

“Everybody’s saying, ‘What’s she doing up here?’” Trump said at an oil refinery in Mandan. “But I’ll tell you what: Good woman.”

A few days later, Trump hosted Heitkamp and a bipartisan group of senators at the White House to discuss tax reform yet again. Heitkamp left the dinner calling the discussion a step in the right direction. She then went on a tax reform listening tour across her state, which voted for Trump by nearly 40 percentage points in 2016.

On Tuesday, Heitkamp—gathered with more than a dozen of her moderate Democratic colleagues—all but announced that she would oppose the bill, albeit while stressing that the final product remains to be written by Republicans.

“I’ve been asking all along, what is it? And I still don’t know what it is. It’s still a moving target. I’m deeply concerned about a number of provisions,” Heitkamp said on Tuesday. “Every member of Congress is going to be a winner [under the legislation]. But I’ve got constituents who are not going to be winners who make a lot less than I do. And so we’ve got to have this tough conversation.”

The failure of Republican leadership to win over Heitkamp’s vote may not, in the end, scuttle its tax overhaul legislation. But it has given the party a far narrower legislative window in which it can operate. It has also raised questions about the risky political calculations made during the push for this particular bill.

“They were ripe for the picking,” Jim Manley, a former top staffer to Majority Leader Harry Reid (D-NV) said of Heitkamp and other moderate Democrats. “Knowing those folks, a least a handful were desperate to find a way to vote for this thing if they could. But there is no pressure to do so. Zip. These guys rolled the dice on a totally partisan bill and may blow it.”

Republicans set up the legislative process around tax reform in a way such that they would not have to rely on Democratic votes. Using budget rules known as reconciliation, the measure would require just 50 votes for passage, so long as it didn’t increase the debt more than $1.5 trillion over a 10-year period.

But, at least at the onset, it was widely believed that a handful of Democratic senators would vote for the measure. Heitkamp is far from the only vulnerable Senate Democrat up for re-election in 2018. Sens. Joe Manchin (D-WV) and Joe Donnelly (D-IN) hail from states Trump won by 42 percent and 19 percent, respectively, in 2016. Each either signaled openly their desire to work with Trump on taxes or accompanied Trump to a tax reform event, as Heitkamp did.

But as the legislative process progressed over the summer and fall, the pressure on them to support the bill greatly diminished. Heitkamp appeared to pin much of the blame on the White House, adding that she and her fellow moderates were “promised” a better process. But others  said that failure was the fault of Senate Republicans. A spokesman for Manchin told The Daily Beast that though he had talked with White House legislative liaison Marc Short and Trump’s top economic adviser Gary Cohn, he had not had a conversation with Senate GOP leadership for months.

“It is hard to sell us something if they don’t let us in the store,” the aide said.

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A spokesperson for Heitkamp said much of the same.

“She has had many meetings with top White House officials and the president about tax reform, but not one Republican member of Congress has reached out to her about tax reform,” the spokesperson said.

Republicans may, in the end, not need Heitkamp, Manchin, Donnelly, or any other Democrat. They could lose two of their members and still advance the bill to a conference committee with the House of Representatives. History, however, suggests that they should have been able to craft a bill that allowed them more wiggle room for final passage.

When former President George W. Bush put together his own tax cut package in 2001, for example, 10 Democrats crossed the aisle to support the bill, including the then-chairman of the Finance Committee, Sen. Max Baucus (D-MT), and even incumbent Sen. Dianne Feinstein (D-CA)—no one’s idea of a tax cutting conservative.

Back then, there was immense political pressure on Democrats to vote for cuts, out of fear that not doing so could be used as an electoral cudgel against them in the upcoming midterm elections. Sixteen years later, the political dynamics are far different. In an interview with The Daily Beast several weeks ago, Senate Minority Leader Chuck Schumer (D-NY) said there were two issues that motivated voters the most in internal polling. “The number one issue people wanted was reduced drug prices,” he explained. “Number two was don’t cut taxes on the wealthy. It is a different world than it was in 2001.”

Even Democrats who voted for the Bush tax cuts concede that point. But they note that the two measures are also demonstrably different. The bill that the Senate is currently considering, for instance, reduces corporate tax rates on a permanent basis and individual rates on a temporary one.

“Even some Republicans question what the effect this tax plan will have on taxpayers and doubt that it will be beneficial to middle income families but don’t doubt that it will be favorable to the top one percent,” former Sen. Ben Nelson (D-NE), who voted for the Bush tax cuts, said in an email to The Daily Beast. “The trickle down argument for the cuts in the business tax rates are disputable, while the cuts are permanent. Individual tax reductions are temporary. People don’t trust the Beltway rhetoric.”

Aside from the substance of the bill, Democrats also have opposed it on matters of process. Major provisions were still being agreed to as of Tuesday, including substantial alterations to property tax deductions and subsidy payments to health insurers. Lawmakers, nevertheless, were set to vote on the measure by week’s end.

Sens. Tim Kaine (D-VA) and Claire McCaskill (D-MO) both said on Tuesday that some of their GOP colleagues had privately expressed dissatisfaction to them with the way in which the legislation has been crafted.

“I’ve had a lot of conversations with Republican colleagues who hate this process. They hate it for the reason that [Sen.] John McCain (R-AZ) took the floor and said they tried to jam something down the American public’s throat with one party on something as important as health care—and tax reform is every bit as important—then you probably should fail,” Kaine said.

Despite these concerns, Republicans seemed poised on Tuesday to get the bill through the Senate. Some of the party’s more skittish members—notably, the deficit hawks—said that their concerns with the bill were being addressed. And the measure subsequently cleared a crucial legislative hurdle in the Senate Budget Committee. It is possible that the likelihood of passage could compel some Democrats to ultimately get on board.

“My sense is that there is potential for a bit of a cascade should Republicans do the necessary lifting on their own,” said Liam Donovan, a Republican strategist. “It could get you from 50 to 53 or so. Generally I think the pressure is nonexistent until this thing is assured.”

But even then, Donovan added, the defining political feature of the tax debate may very well be that vulnerable Democrats felt such little pressure to support it at all.

In August, Trump traveled to Missouri and insisted, while there, that voters should unseat McCaskill if she didn’t back his tax bill. On Tuesday, McCaskill called the legislative process behind the bill a sham, while gently mocking Republicans for their desperation in supporting it.

“They are under tremendous political pressure. This is all about them getting a tax bill passed to show that they can run government. And many of them are so focused on that political pressure that they remain uncomfortable with the reality that lies underneath that political pressure,” McCaskill said. “This is a public way of saying to all of them: we will be here to work with you once this fails because it should on its merits because it’s that bad.”

Trump is returning to Missouri on Wednesday. And, once more, he will be deploying more sticks than carrots. Aides say he will use the occasion to call out McCaskill for not backing the bill.