Before a small audience of conservative activists at a convention center in Conroe, Texas Congressman Kevin Brady outlined the Republican plan to convince a skeptical national electorate that the GOP’s latest experiment with trickle-down tax cuts isn’t just another giveaway to corporate America and the 1 percent.
The plan is brilliant in its simplicity: make the tax cuts permanent and then keep cutting over and over again, deficits be damned. And then, when the budget deficits become too big to stomach, shred the social safety net.
“I want to do tax cuts every year that Republicans are in control of the House and the Senate,” Brady pronounced, unveiling a framework for the GOP’s second round of tax reform — dubbed version 2.0 — which he said would make rate cuts for individuals and families permanent. “The old culture in Washington, D.C., is to wait 30 years between fixing this tax code,” he said. “So 2.0, which is going to be followed by 3.0 and 4.0, like the updates on your phone, is going to be first led by permanence.”
The call for even more tax cuts comes just months after the passage of President Trump’s tax cuts in December. And there was perhaps nobody more instrumental to the plan than Brady, the longtime congressman from The Woodlands who chairs the chief tax-writing committee in the U.S. House.
Brady and his GOP brethren put aside concerns about federal budget deficits and fast-tracked a $1.5 trillion package of largely unfunded tax cuts over 10 years with the promise that it would unleash an economic boom of epic proportions and ultimately pay for itself.
Such projections are delusional, according to nearly every credible economic forecaster, to say nothing of the fact that every other previous GOP experiment with trickle-down tax cuts — from Ronald Reagan to former Kansas Governor Sam Brownback — has failed to pay for itself. In fact, the tax cuts, coupled with a massive recent spending bill approved by Republicans, are already driving historically high budget deficits.
The centerpiece of the Trump tax cuts is the permanent slashing of the corporate rate from 35 percent to 21 percent. Meanwhile, citing the constraints of Senate budget rules, Republicans designed the more modest individual rate cuts to phase out in eight years.
Oddly enough, Republicans have found that giving corporations and the rich a windfall while offering temporary relief to everyone else is a tough political sell heading into the 2018 midterms. An April Gallup poll found that 52 percent of Americans disapprove of the Trump tax cuts and just 39 percent approve.
At the town hall event hosted by Americans for Prosperity, an astroturf political organization financed by the Koch brothers, the congressman claimed that the problem is simply that working and middle-class people just don’t know they’ve benefited from the new law. “It’s not that [their paychecks] didn’t go up,” Brady said. “They didn’t know to check.”
The public’s inability to see the munificence of the tax cuts has prompted the GOP and its allies to do damage control. In March, Americans for Prosperity announced a $20 million campaign aimed at convincing voters that the tax cuts, and the GOP pols who so bravely enacted them, are indeed good.
Brady said the House Republicans’ plan is to push to make the individual rate cuts permanent in time for the November elections. “Democrats argued they were against the [original tax] bill because those provisions weren’t permanent,” Brady told the Observer. “This gives them a chance to actually act on what they’ve been talking about.”
It’s a thinly veiled political messaging tactic. Nobody sincerely believes that Republicans can and will pull that off before November. Unlike the Tax Cuts and Jobs Act, which, because it used the budget reconciliation process, only needed a simple majority in the Senate, new tax legislation would need Democratic senators to get on board (which won’t happen). But that’s not the point.
The ploy would allow the GOP to say they’re trying to ensure your family’s tax cuts don’t disappear while Democrats are playing partisan politics.
It’s all part of the GOP’s strategy to buttress against a predicted Democratic wave in the House. Brady said he expects House Republicans to introduce a bill before members head home to campaign during August recess, conveniently allowing embattled incumbents to drape themselves in rhetoric about “family friendly” tax legislation and Democratic intransigence.
“When [voters] know they’re keeping more of what they earn, they’re going to support conservatives — and more importantly, they’re going to fight against those who try to take that money back from them,” Brady said at the event.
In a brief interview after the event, Brady brushed away concerns that a bevy of corporations have announced layoffs since the tax cuts, including Texas-based AT&T and Kimberly-Clark, or have pumped savings into stock buybacks at the expense of improving employee wages and benefits.
He also rejected the notion that tax cuts are part of the deficit problem, instead blaming Democrats for past spending excesses. “I think ultimately with the growth of the economy, most if not all of this small investment will be paid for and recouped,” he said. “So there are deficits; they’re there because of the spending in Washington, not because of tax reform.”
Here, Brady is hinting at the phase that comes after endless tax cuts: using self-inflicted concerns about ballooning deficits as cover to gut the social safety net. Plans to restrict access to welfare programs and cut Social Security and Medicare spending are also underway, Brady boasted.
“[Entitlement reform] is like tax reform,” he said. “It’s big, you’ve gotta work multiple years to get it into the right position and then you’ve gotta move on it.”