The GOP budget resolution is an immoral documents. Democrats have a better idea. (More)
“Every budget is a moral document”
So declared Jim Wallis in his 2006 book God’s Politics. In a categorical sense, that’s true. But in a descriptive sense, some budgets are immoral documents … and the Republican budget resolution passed this week is one of them.
The budget resolution adopted by the US Senate last week, and by the House of Representatives on Thursday, is not a law. It cannot be signed or vetoed by the president, and the policies it recommends are just that – recommendations.
But it still matters. The budget resolution changes the rules for passing certain legislation, especially in the Senate, and this resolution in particular will allow Republicans to pass $1.5 trillion in tax cuts (or more, depending on how they choose to do the math) over 10 years with only 51 votes.
The budget also stands as a vision of what the Republican majority wants to do, and perhaps would do if it had eight or nine more votes in the Senate. It tells you what programs they’d protect and which they’d expand, what groups would see funding boosted and who would be left holding the bag. Its underlying numbers tell you how serious the party leaders are about their stated goal of balancing the budget.
The agenda the resolution outlines is radical. The federal welfare state would be rolled back in just about every dimension, with health care programs particularly affected. All non-Medicare health programs would see a cut of $1.3 trillion, or nearly 30 percent, by 2027, according to the Center on Budget and Policy Priorities.
Medicare would be cut too, to the tune of $473 billion. There is $1 trillion over 10 years in mystery cuts to mandatory programs, cuts that would in practice almost certainly hurt programs for the poor.
You read that right: $1.5 trillion in tax cuts, almost all going to the richest Americans — offset by at least $1.5 trillion in spending cuts for health care, almost all of which would fall on hardworking families. Plus another $1 trillion in cuts to other programs for the poor.
The budget resolution didn’t actually write a budget or change tax law. Instead, it was a procedural resolution that allows the Senate to pass their ‘tax reform’ under filibuster-proof reconciliation rules. So they’ll need only bare majorities in both the House and Senate. If they can get majorities, that is:
But as they rush forward, lawmakers have not resolved basic questions about how the tax overhaul would affect the wealthy, the middle class or lower-income earners. Still unresolved were several questions: whether the legislation would moderate the expected benefits for the wealthy; whether it would cap or eliminate popular middle-class tax breaks like the state and local tax deduction or the tax benefit of 401(k) retirement plans; and how dramatically it would expand a child-care tax credit that helps working-class families. Also on the table were several critical questions about how the corporate tax code would change.
Among the sticking points, as that Washington Post article notes, is a proposal to eliminate the federal deduction for state and local income taxes:
A Republican proposal to eliminate or scale back a deduction that allows individuals to deduct state and local income taxes from their federal payment turned into a major sticking point in Wednesday’s budget vote. Twelve Republicans from the high-tax states of New York, New Jersey and Pennsylvania, where many voters stand to be hit hard if the deduction were eliminated, voted against the budget.
Most Senate and House Republicans are fine with that, because GOP-led states tend to have low or no state and local income tax, so taxpayers in red states don’t get to use that deduction anyway. Put simply, Republicans want to take more from the poor and give it to the rich … and take yet more from blue states and give it to red states. Talk about “picking winners and losers.”
It’s not just the budget, as the Post’s Catherine Rampell explains:
Republicans claim to believe no company is too big to fail. The almighty market must be allowed to work its magic, and firms with defective business models should face the consequences.
Yet over the course of this year, President Trump and Congress have worked to prop up lots of defective firms. By which I mean: Companies whose business models are contingent on scamming customers, shortchanging workers and suckling the government teat.
Just this week, the Senate limited consumers’ ability to fight back against financial firms that have cheated them. Which is of course an implicit subsidy to firms whose profits depend on cheating.
By that, Rampell means the repeal of a new Consumer Finance Protection Bureau rule that prohibited mandatory arbitration clauses in consumer lending. Those fine-print clauses force customers to accept an out-of-court process where, in most cases, the lender hires an arbitrator to resolve disputes with customers. Guess who’s side the arbitrator usually chooses?
That rule just dealt with mandatory arbitration clauses in certain financial contracts. Congress and the administration have delayed or dismantled other regulations curbing forced arbitration in disputes involving nursing homes, for-profit schools and sexual harassment claims against government contractors.
This year, the House also passed a bill that would make it more difficult to bring class-action cases in general.
This exposes the bait-and-switch of ‘libertarian’ dogma. On the one hand, they say regulation is ‘too intrusive’ and class action suits are a better remedy for businesses that abuse customers or workers, or businesses that spew pollution into other people’s air, land, and water. On the other hand, they say class action suits are ‘frivolous litigation’ and must be stopped with ‘tort reform.’
Rampell’s list goes on:
Republicans have lately pursued other measures designed to limit the private-sector financial consequences faced by corner-cutters.
On the very day Equifax announced its massive data breach, the House held a hearing on legislation to cap actual and statutory damages for class actions involving credit agencies at $500,000, and to eliminate punitive damages.
Republicans have also made it easier for firms that can’t make ends meet honestly to score government contracts.
They did this by killing an Obama-era order requiring companies bidding on government contracts to disclose if they’ve recently broken any labor laws.
Trump and congressional Republicans, for example, deployed the Congressional Review Act to roll back many of the Obama administration’s 2016 regulatory actions. Thanks to Trump:
— It’s easier for mining companies to dump pollution into streams.
— It’s easier for oil companies to bribe foreign governments.
— It’s easier for broadband internet providers to sell their customers’ user data.
— But it’s now harder for state governments to set up low-fee retirement accounts so people could save money without getting ripped off.
Trump doesn’t tweet about it much, but it turns out that making it harder for people to avoid financial rip-offs is something of a passion for the Trump administration. He has, for example, gutted enforcement of an Obama-era rule that would have made it illegal for financial advisers to deliberately rip off their customers.
As New York Magazine’s Jonathan Chait wrote, Republicans seem convinced that Americans want plutocracy:
Last night, the Republican Congress voted to overturn a rule protecting consumers from fraud committed by financial institutions. This is fully in keeping with the spirit of Republican government under Trump. What is less remarked upon, perhaps, is the lack of concern this pattern of behavior has generated among Trump’s Republican partners, who seem to regard their policy agenda as somehow helpful to their political survival.
The human mind is an incredibly adept tool for generating reasons to turn one’s own self-interest into a moral argument. The Republican Congress has turned this normal process of rationalization on its head. They have taken actions they truly consider to be morally correct, and convinced themselves that they are following their own self-interest.
Republicans have been chanting relentlessly for months that they must pass a tax reform or else lose their majority. The Republican tax plan is, in fact, comprehensively unpopular. Only 28 percent of the public supports it. The public wants the tax code to impose higher rates on corporations and higher-earners, and they believe (correctly) that the Republican plan would do the opposite.
Our own resident faculty noted how, on issue after issue, the God-King and Republicans follow a 9-11% fringe. Yet, as Chait notes, they’re convinced that tiny fringe is the majority:
Yet somehow Republicans have convinced themselves that their popularity depends upon passing this unpopular plan that would carry out unpopular goals. In place of a coherent argument for why the voters will reward them for doing so, they typically substitute the tautological claim that Republicans believe in tax reform because Republican believe in tax reform. “Tax reform is what we are about,” Mitch McConnell “explains.” “If there’s anything that unifies Republicans, it’s tax reform.”
And while the tax cut provides the centerpiece to this agenda, it is not the only element. Paul Ryan is promising to oppose a bipartisan plan to make insurance payments that are needed to hold down premiums. They will therefore cause insurance premiums to rise dramatically and immediately for several million customers. The public overwhelmingly wants Republicans to make Obamacare work rather than scuttle it, but Republicans instead appear fixated on the prospect that voters will punish them for violating their promise to repeal the law.
They seem to believe they can defy public opinion on all of these issues, perhaps thinking Fox News and talk radio will beguile voters into not connecting the dots. But that may not happen, as New York Magazine’s Eric Levitz reports:
Blue America’s greatest fear about the Trump-era (after nuclear annihilation, anyway) is probably that the president and his party are going to get away with all of it: trying to make health care more expensive for much of their own base; letting banks fleece their customers and coal companies contaminate their neighbors’ water; the callous, inept response to Puerto Rico; coddling white supremacists; betraying core U.S. allies; running the EPA as a fossil-fuel-industry think tank; insulting war widows; selling their legislative agenda to the highest-bidding libertarian billionaire; elevating cruelty toward the vulnerable into a patriotic duty — and at the end of the day, they won’t face consequences for any of it.
After all, the GOP has taken pains to insulate its voting base from reality. Much of this country scans the radio dial and hears five different flavors of conservative talking points; turns on the local evening news and gets a broadcast scripted by a pro-Trump media company; looks to Tucker Carlson during prime time for fair-and-balanced coverage. It doesn’t matter what Republicans actually do – real Americans don’t read the “fake news.”
This dire assessment may yet prove correct. But it’s worth noting that a growing body of polling data suggests that it won’t.
Levitz cites a series of polls showing that most Americans are indeed connecting the dots, and they don’t like the picture that emerges. You can get a sense of that from FiveThirtyEight’s average of the God-King’s approval ratings and 2018 generic ballot polling. If those trends hold through next November, Democrats could well retake both the Senate and House.
A new proposal by Democratic Sens. Michael Bennet (CO) and Sherrod Brown (OH) would change that. The American Family Act of 2017 would dramatically expand the child tax credit, which currently offers up to $1,000 a year for families with significant earnings but little or nothing for many poor people, to pay:
— $3,000 per year, or $250 per month, per child ages 6 to 18
— $3,600 per year, or $300 per month, per child ages 0 to 5
The benefits would be distributed monthly, in advance, so that families can pace out their spending and smooth their incomes. Because the CTC, like the earned income tax credit, is currently paid out through tax refunds, it sometimes leads to a perverse situation in which families use it to pay down debt they never would’ve had to incur if they’d gotten the money earlier.
The benefits would be indexed to inflation, unlike the current child tax credit, and phased out for high-income families. And as Dylan Matthews explains at that link, the effects would be dramatic:
For middle-class families earning $40,000 to $100,000 a year, the plan would result in a huge increase in monthly income, especially when kids are young and need diapers, cribs, strollers, and new clothes to replace quickly outgrown old ones.
But arguably the most important effect of the plan would be to cut child poverty in the United States almost in half.
That’s part of a Democratic tend toward concrete policies to help families, Matthews writes:
Samuel Hammond, a poverty policy expert at the left-libertarian Niskanen Center think tank and a prominent advocate for expanding the child tax credit and implementing a child allowance, is very encouraged. “My hope is that we’ve created a kind of arms race for pro-family and -children cash-based policy,” he says.
He continues: “With the Patty Murray bill, and Democrats in general pushing child care, there was a version of this narrative shaping up: Republicans want to help families by letting them keep more of their paycheck, Democrats want to subsidize their interest group. I think the Bennet-Brown proposal breaks that narrative. It says, ‘No, we care about families too. But we go big.’ I mean, to call it a one-up is an understatement. Both Brown and Bennet have supported CTC expansions before, but this is a step up even for them.”
For all the blather about the God-King’s ‘populism,’ his and Republicans’ actions are still the red side that graphic at the top of this article: pampering the rich at the expense of hardworking families.
Democrats think the budget should truly be a “moral document,” with tangible policies that help struggling families. And voters may just give us a chance to do that.
Good day and good nuts