Unless you’ve been living under a very big rock at the bottom of a very deep hole at the base of a very large crater on the planet Mars, you probably know there is a very wide chasm separating the Republican and Democratic Parties with respect to domestic policy.
The Democratic Party believes the middle and lower classes have had it tucked to them since the era of Ronald Reagan and the emergence and eventual marketplace triumph of trickle down politics. They point to more than 40 years of stagnant Real Wages, the constant and dispiriting race to keep up with the cost of living in which every step means falling farther behind, and the ever-widening and maddening gulf between the haves and the have nots, the one-percenters and everyone else. Party leadership and President Biden believe something has to be done and now is the time to do it. Ergo, the Build Back Better bill (BBB) currently ricocheting around the halls of Congress.
The Republican Party and its leadership disagree. In a nutshell, they say the whole thing costs too much and will bankrupt the country.
They took a somewhat different stance when they were in power and, with no Democratic support, passed the Tax Cuts and Jobs Act of 2017, which many consider the quintessential example of trickle down economics in American history. Under this legislation the nonpartisan Congressional Budget Office (CBO) reported that individuals and pass-through entities like partnerships and S corporations would receive about $1.125 trillion in net benefits (i.e. net tax cuts offset by reduced healthcare subsidies) over 10 years, while corporations would receive around $320 billion in benefits. The CBO estimated that implementing the Act would add an estimated $2.289 trillion to the national debt over ten years (emphasis added)( “CBO-Appendix B: The Effects of the 2017 Tax Act on CBO’s Economic and Budget Projections, page 129)
Republicans, said the CBO report was hogwash. Treasury Secretary Stephen Mnuchin went so far as to say the Act would pay for itself in ten years and lower the national debt.
Unfortunately, things haven’t worked out that way. Almost every major analysis correctly predicted revenues would fall and debt would increase. Analysis of first-year results released by the Congressional Research Service (the best research service you perhaps have never heard of) in May 2019 found:
- “a relatively small (if any) first-year effect on the economy”
- “a feedback effect of 0.3% of GDP or less,” such that the tax cut did not pay for itself
- “pretax profits and economic depreciation (the price of capital) grew faster than wages,” meaning shareholders benefited more than workers
- inflation-adjusted wage growth “is smaller than overall growth in labor compensation and indicates that ordinary workers had very little growth in wage rates”
- “the evidence does not suggest a surge in investment from abroad in 2018” as proponents of the Act had asserted it would
- “While evidence does indicate significant repurchases of shares, either from tax cuts or repatriated revenues, relatively little was directed to paying worker bonuses”
So, with that kind of batting average it seems a bit precious for Republicans to summarily dismiss the BBB bill and line up the firing squad to kill it. On the other hand, they proclaim agreement with the “goals” of the BBB, while offering no practical applications to achieve the desired results. Just goes to show that since the founding of the country parties in the minority, no matter who they are, have demonstrated a terrific ability to denigrate what the majority proposes without any responsibility for proposing and implementing their own solutions.
But pity the poor Democrats within the Biden Administration. They’re having to fight the war on three fronts. First, there is the inevitable and total Republican opposition; then they have to appease the Progressive wing of their own party; and they have to do all this while at the same time dealing with a certain Senator from West Virginia. Let us not forget that this is the man who fathered the CEO of Mylan Pharmaceuticals, Inc., who, with Gordon Gekko enthusiasm, in 2016 raised the price of life saving EpiPens from $100 to $600 for a two-pack. Why? Because she could. I only mention this because of the old adage about the apple and the tree.
Given Senator Manchin’s knife-through-the-heart death blow to BBB this past Sunday on Fox News, one might be forgiven for thinking that if democrats keep bringing up the bill they’ll be fulfilling Einstein’s definition of insanity.
But, hold on a minute. I suggest the erstwhile coal magnate has gone a bridge too far and given the Democrats a magnificent opportunity. After his announcement, he was almost universally excoriated for it. Even the Coal Mining Union called him out on it. Obviously, this affected him, because the next day he seemed to back off a bit. Therefore, if the democratic muck-a-mucks are magnanimous and warm-hearted and forgive him publicly for this unfortunate error in judgement―sort of welcome him home as the Prodigal Son―he may be grateful enough to work with the President and, with a couple of face-saving tweaks, produce a bill all democrats can support, maybe even a few Republicans when they see the writing on the wall.
I’ve always thought the key to success is the ability to outlast the opposition. Elihu Root said it better. He was Secretary of State and Secretary of War in the Roosevelt Administrations, Theodore’s not Franklin’s. He said, “Men do not fail; they give up trying. Failure is a necessary step toward success.” Mr. Root also won the Nobel Peace Prize in 1912.
Democrats would do well to remember Root’s words.
What do you think?
Tags: legislation