Republicans finally seem to be figuring out that taking health care from the poor to pay for tax cuts for the rich isn’t exactly popular.
Indeed, less than 20 percent of people support the Senate’s plan, which would do just that. It has been enough to make some Republicans start considering what for them is the ultimate heresy: What if they didn’t cut taxes as much as possible for wealthy investors? What if, instead, they used some of that money to cover a couple million more people and keep costs down a little more for everybody else — kind of, you know, like Obamacare does?
Now, as big a positional shift as that would be on health care, it actually wouldn’t be one on taxes. That’s because whatever taxes Republicans don’t cut in their health-care bill, they can cut in their tax reform one. That might sound pretty obvious, but it’s not. Republicans had thought that they couldn’t do that — at least not in a way that was worth doing — because of the special rules for passing a bill with less than a filibuster-proof majority in the Senate. They’ve realized, though, that they can just . . . change those rules, and do one big tax cut later rather than breaking it up into two smaller ones. That certainly seems to be what Sen. Dan Sullivan (R-Alaska) was hinting at when he said that Obamacare’s taxes on investment income “should not be repealed in this bill.” Notice that he’s not saying that they should not be repealed at all — just that now is not an auspicious time.
The idea, of course, is that cutting taxes for the rich after you’ve taken health care from the poor doesn’t look as bad as doing them all at once, because one isn’t explicitly paying for the other. It’s the difference between class antagonism and class war.
But, again, that’s only as far as appearances go. If Republicans really do make it easier for themselves to cut taxes, then they can get all the ones they want even if they don’t get any now. How would that work? Well, the important thing to understand is that Republicans can cut taxes with just 51 votes in the Senate instead of the 60 it takes to beat a filibuster as long as they meet one, and only one, condition: that they don’t add to the deficit outside of the budget window. Their tax cuts, then, either have to be fully paid for, or else arrive with an expiration date.
Republicans, though, don’t want to waste control of government they may seize only once every 15 years on tax cuts that would last only 10. They want a more permanent victory than that. Which, strange as it may seem, is where their health-care bill comes in. Republicans, you see, know there aren’t enough tax loopholes they’re willing to close to pay for all the tax cuts they’re waiting to enact. So they need to find other “pay-fors” on which they could agree — pay-fors such as health-care spending cuts. Think about it like this: If Republicans use $700 billion of Medicaid cuts to cover the cost of their tax cuts, then that’s $700 billion in tax breaks they don’t have to get rid of.
That, at least, was the plan until they found an even more politically palatable way to pay for their tax cuts than by taking an ax to Medicaid. That’s not paying for them. Why would they do that when it would mean their tax cuts would have to be temporary? Because it turns out that they can change the definition of “temporary” to something that’s a lot closer to permanent. The trick is that although their tax cuts have to be paid for past the budget window, there’s nothing that dictates the length of that budget window. It’s 10 years now, but it could be 15 or 20 or even 30 years if they wanted it to be — and some of them, like Senate Finance Committee Chairman Orrin G. Hatch (Utah), do.
Not paying for their tax cuts would really solve their problem for how to pay for their tax cuts. Republicans could stop trying to throw 15 million people off Medicaid to cover the cost of cutting the tax on investment income from 23.8 to 20 percent for people making $250,000 or more. Or trying to come up with any tax loopholes they’d be willing to close — something that has eluded them so far — let alone a few trillion dollars’ worth of them. Instead, they could get back to their Bush-era basics: passing a deficit-financed tax cut and then announcing how much they hate deficits whenever Democrats win back the White House. After all, why go through the unpleasant business of paying for things when you could skip all that and still get tax cuts that would last until almost the middle of the century?
Or, as Republicans call it, fiscal responsibility.