This Is the Long Game of Republican Economics

Corporate tax cuts are just the first step.

Jonathan Ernst / Reuters

Here is a brief modern history of Republican attitudes toward the deficit. For eight years under an Obama presidency, Republicans foretold of a debt apocalypse and urged lawmakers to slash deficits by trillions of dollars. Under Trump, both GOP-controlled houses passed a corporate tax bill that economists predict will grow deficits by at least $1 trillion in the next decade. Then, within hours after the tax bill passing the Senate, Republicans stepped up efforts to cut welfare spending on low-income Americans because, in the words of Sen. Orrin Hatch, “we don’t have any money anymore.”

This flip-flop—or, more accurately, a flip-flop/flop-flip—might strike some as a trivial double-reversal, or just quotidian hypocrisy. But it’s a microcosm of the GOP economic agenda, which has made regressive deficit-busting tax cuts the centerpiece of the party’s national agenda while using fears of the deficit as a stalking horse to attack progressive spending.

This is the long game of Republican economics, and it is the opposite of a secret. In fact, it is a published document. For years, House Speaker Paul Ryan, with broad party support, has proposed budget blueprints that both cut corporate taxes, thus returning trillions of dollars in post-tax income to business owners and investors, and slashed government spending on health care and anti-poverty programs.

Now Republicans seem poised to enact much of that very agenda. With corporate tax cuts nearly out the door—pending some ironing out in conference between the House and Senate—Republicans are turning their attention to the welfare system, arguing that neither the deficit nor the economy can afford current programs that help the sick or poor. In a recent radio interview, Ryan told radio host Ross Kaminsky that Republicans will try to reduce spending on Medicare, Medicaid, and anti-poverty programs in 2018, despite the absence of a filibuster-proof majority in the Senate. “We’re going to have to get back next year at entitlement reform, which is how you tackle the debt and the deficit,” he said. Meanwhile, The Wall Street Journal and The Washington Post report that the GOP might start by targeting the Supplemental Nutrition Assistance Program (also known as SNAP, or food stamps), the Temporary Assistance for Needy Families program (TANF), Social Security Disability Insurance, or Medicaid.

There are two major Republican arguments against anti-poverty spending and social insurance—an affordability argument and an efficiency argument. One Republican claim against these programs, as Senator Hatch and Ryan have previewed, will be that there is not enough revenue to support them. It’s a strange claim that’s even more strangely timed. Whether or not the U.S. is approaching a debt crisis in the next decade—I honestly don’t know—it seems bizarre to raise this alarm after passing a bill that greatly increases the debt. It’s like a husband who, after years of obsessing about the family’s finances, buys a Lamborghini on a lark, drives home, and rants to his wife about the mortgage.

A second angle of attack against anti-poverty spending will claim that welfare reform will alleviate poverty and grow the economy by forcing low-income layabouts back to work. “Sometimes we need to force people to go to work,” Representative Rod Blum, an Iowa Republican, said. “There will be no excuses for anyone who can work to sit at home and not work,” Representative Clay Higgins, from Louisiana, concurred. President Donald Trump, who once promised “I am going to take care of everybody,” has embraced and embellished the argument that welfare makes people lazy and rich. “The person who is not working at all and has no intention of working at all is making more money and doing better than the person that’s working his and her ass off,” he said at a speech last week in Missouri. (Ironically, the biggest winners of the GOP tax bill would be the lazy rich, since rich heirs and passive business owners would see their effective tax rates plummet.)

Economic research does not quite square with the Republican assessments. The welfare queen is a pernicious American myth. The left-leaning Center on Budget and Policy Priorities has published numerous reports showing that SNAP does little to discourage work among its recipients. Other research has shown that food stamps lift millions of non-seniors out of poverty, more than any program other than the Earned Income Tax Credit. To cut SNAP as a sequel to slashing the corporate income tax would be a rather explicit reverse–Robin Hood, fattening the after-tax income of the rich as a prelude to further impoverishing the poor.

Why are Republicans doing this?

Not to burnish their popularity, surely. There is no evidence of public pressure to cut welfare spending in this growing economy. Meanwhile, just 29 percent of the public approves of the corporate tax cut, according to the latest Quinnipiac poll. That makes it one of the least popular pieces of legislation in the last 30 years. (The Affordable Care Act, also quite controversial, received around 40 percent support according to most pollsters in March 2010, when it was signed.)

Perhaps the Republican economic agenda does not appeal to the public because it was never meant to do so. Rather, it is exquisitely designed to mollify a class of corporate-libertarian donors, like the Koch brothers, who are members of a coordinated multidecade effort to make tax cuts on the rich and the destruction  of welfare programs their core agenda.

The idea that donors are dictating GOP economic agenda is not some leftist conspiracy theory. It is the official testimony of the Republican Party. To quote evidence from a previous piece:

  • “My donors are basically saying, ‘Get it done or don’t ever call me again,’” Representative Chris Collins, a New York Republican, told The Hill.  

  • The “financial contributions will stop” if the GOP fails to deliver corporate tax cuts, Senator Lindsey Graham, a Republican from South Carolina, told NBC News.

  • “The donor class … has concluded that the inaction of this administration and Congress is totally unacceptable,” Josh Holmes, the former chief of staff to Senator Mitch McConnell, told CNN.

  • “(Donors) would be mortified if we didn’t live up to what we’ve committed to on tax reform,” Steven Law, the head of Senate Leadership Fund, a super PAC, told the New York Post.

It seems harsh to say that Republican politicians are mere servants to plutocracy. But when several members of the same organization independently claim the exact same motive, one is obligated to believe them.

Liberals wailed after the Senate passed the tax bill last week. Their reaction isn’t entirely wrong, perhaps, just premature. A corporate tax cut is not the end of the republic. But it’s not the end of the GOP economic agenda, either. The latter will only conclude with a war on the multidecade effort to protect the poor, sick, and old through federal social-insurance programs that, despite their prodigious and rising cost, have largely succeeded in doing so. If Republicans are as triumphant in their second effort as they were in cutting corporate rates, the wailing may be justified.