Friday, October 06, 2017

Can Tax Reform Really Save the Republican Regulars in 2018?

A series of recent news articles over the past few weeks describes sinking morale within the ranks of Republican congressional leaders and their allies. The failure of the Graham-Cassidy health care reform bill in the Senate, combined with the victory of Roy Moore in the Alabama Republican Senate primary, has increased the sense on Capitol Hill that an angry bloc of Republican voters is ready to punish party incumbents for failing to implement the ambitious conservative legislative agenda that Paul Ryan and Mitch McConnell promised last winter.

Normally, the congressional leaders of a president's party could at least expect the White House to come to its defense. But we are not in normal times. President Trump, of course, has repeatedly and angrily expressed his frustration with the congressional GOP in general and McConnell in particular. His erstwhile political strategist Steve Bannon, freshly exiled from the West Wing, is now apparently dedicating himself to the recruitment of challengers to "establishment" Republicans in next year's House and Senate primaries. Vice President Mike Pence is usually considered a loyal party man—at least in comparison—but his own chief of staff was secretly recorded this week encouraging high-dollar donors to rebel against insufficiently pro-Trump Republicans by withholding financial support and even actively backing intra-party challengers.

Amidst this increasingly menacing haze, Republican regulars are now fixing their eyes on tax reform as a potential escape hatch. The repeated defeat of health care legislation has only raised the perceived stakes for the passage of a major tax initiative. "Republican leaders are making no attempt to mask their fear," reported the New York Times on Thursday, "predicting that failure to pass a tax overhaul in the coming months will lead to a wipeout in next year's midterm elections." The argument is simple enough: if tax reform falls apart the way health care reform did, incumbent Republicans will have no major accomplishments to tout, and disgruntled conservatives will respond in 2018 by supporting insurgent challengers in Republican primaries and/or by declining to vote in the November general election.

But accepting this logic requires viewing tax reform as itself a sufficiently valuable prize in the eyes of Republican-leaning citizens that its passage alone is likely to represent the difference between loyalty to the current stock of party incumbents and widespread disaffection or rebellion. There are at least two reasons to be skeptical of this assumption.

First, it's not at all clear that active Republican voters in the Trump era are as energized by the potential enactment of tax reform as they are by the prospect of repealing Obamacare, building the border wall, and achieving other currently-stalled party priorities. Will the simmering anger that many Republicans have expressed toward their own party's congressional leadership for the past decade really be extinguished by the passage of a single bill on a subject that has hardly dominated popular conservative debate in recent years?

Second, the actual plan that is emerging from negotiations between congressional leaders and the White House focuses largely on reducing the tax burden of businesses and very wealthy individuals; millions of middle-class and upper-middle-class citizens would receive a minimal reduction or even a net increase in their tax liabilities. Proponents argue that the plan would produce additional economic growth that would in turn ultimately boost wages and employment rates for the non-rich; even if those predictions come true in the medium-to-long term, however, it is unrealistic to expect perceptible economic payoffs to arrive in the months between the signing of the bill and the November election. Whatever the merits of the Republican plan might be, it's simply not a measure designed to provide immediate benefits to the average voter.

A somewhat stronger case for the electoral advantages of tax reform emphasizes three indirect ways in which passage could aid the Republican cause in 2018. For one thing, reform is a popular goal among the party's most generous financial donors—many of whom are apparently withholding their usual contributions at the moment as a form of protest against Congress's lack of productivity so far. If tax reform reopens some roomy wallets that are currently closed, it could help Republican incumbents compete financially against upstart primary challengers and opposition Democrats alike.

In addition, observable progress on major tax legislation over the next few months might help convince a few wavering incumbent Republicans to seek another term in 2018, while a lack of legislative success might similarly encourage those members to consider retirement—leaving behind open seats in Congress that would be vulnerable to capture in the next election by anti-leadership Republicans or Democrats.

A final way in which passage of tax reform might help congressional Republicans politically is that it might get Trump off their backs a bit—or, at least, leave him somewhat less disagreeable than he would be if reform were to fail. The worst-case scenario for Republican House and Senate leaders is an out-and-out civil war with a president who, weakened though he may be in a more general sense, clearly holds most of the power within his own party. Giving Trump a bill to sign hardly guarantees that he will be a loyal asset to fellow Republicans in 2018, but failing to deliver one virtually ensures that he will be a vocal critic of his own party's congressional membership.

All three of these indirect consequences of tax reform could well exert a limited degree of influence over Republican electoral fortunes, but it's hard to see how their combined impact would be significant enough to represent the difference between a good and a bad 2018 midterm for the party. Other external factors such as Trump's job approval rating, the success of Democratic candidate recruitment efforts, the drawing of House district lines, and the staggered terms of the Senate are poised to be much more powerful determinants of next year's outcomes, while the long-term trend of increasingly successful right-wing revolts against "establishment" Republicans is likely to continue whether or not McConnell and Ryan can muster sufficient support for a single piece of legislation.

Republican incumbents are understandably nervous about their prospects in 2018, but that doesn't make tax reform a "make-or-break" proposition for party regulars. We should therefore be wary of analysis that frames tax reform efforts primarily through an electoral lens rather than emphasizing its much more consequential substantive effects and implications for congressional governance and policy-making. If Republican regulars are indeed fatally vulnerable next year in primaries or general elections, passing tax reform will not save them; if they still maintain a clear path to victory, it will likewise not be foreclosed even if legislative success eludes them.