Even though he lost the popular vote, Donald Trump is the legitimate president-elect, and I share both Hillary Clinton’s admonition to keep an open mind and President Obama’s wish for Trump’s success.
But this is not the time for amnesia. Trump’s campaign may not have featured much in the way of concrete policy, but he and his team did make a number of promises, including a first-100-days agenda, some of which reads like a hit list against progressive priorities. The agenda raises two questions. First, can he pull it off? Second, will he choose to do so? Since his victory, Trump has made some conciliatory sounds, but we cannot yet know how seriously to take him. He clearly has no reservoir of trust from those who opposed him. Moreover, some of what he’s saying, particularly about Obamacare, doesn’t make sense. So let’s examine the first question: What long-held conservative goals can President Trump achieve? The answer, which may surprise those who were banking on Washington gridlock to come to the rescue and block Trump’s agenda the same way it blocked Obama’s, is that with Republican majorities in both congressional chambers, he may be able to repeal Obamacare, enact a big trickle-down tax cut and roll back many progressive achievements. (For the international-trade version of this discussion, see here.) Trump’s tax-cutting plan was scored by the Tax Policy Center as losing $6 trillion over 10 years, with most of the benefits (47 percent) accruing to the richest 1 percent. Surely, Senate Democrats would filibuster such a proposal, blocking it from getting the 60 votes it needs, right? And based on its impact on the debt, wouldn’t Republican budget hawks on the right also block this plan? The Democrats could try, but as long as at least 50 Senate Republicans hang together, they could pass this tax cut with a simple majority under an arcane budget process known as reconciliation, which preempts the filibuster. Ironically, reconciliation was introduced in the 1970s as a way to streamline the clunky budget process, control spending and reduce deficits. It hasn’t always worked out that way. Yes, there’s a sub-rule that says any bill passed under reconciliation cannot increase deficits outside the 10-year budget window. But that just cued Senate Republicans under George W. Bush to pretend that the two big tax cuts they passed in his first term ended after a decade.Of course, when the time came for the cuts to sunset, Republicans accused Democrats of pushing for a massive tax increase, and to this day, the vast majority of those cuts remain in the system. And as far as deficits go, allegedly conservative deficit hawks turn into chicken hawks when it comes to tax cuts. I’ve had senior Republican members of Congress tell me that, arithmetic be damned, spending increases raise deficits; tax cuts do not.
To be clear, Democrats have tapped reconciliation as well. Most recently, they used it to pass the Affordable Care Act, which is also ironic, as I suspect that even before they use reconciliation to jam through their tax bill, Trump and the Republicans will use it to repeal Obamacare. By repealing the Medicaid expansion, the subsidies in the exchanges, the coverage mandates and the taxes that support the program, they will finally be able to accomplish this goal, at great expense to the millions of Americans who will lose health coverage. And at least from what I’m hearing from Capitol Hill, they don’t intend to wait until they have any sort of replacement plan. There’s been some talk of turning Medicaid into a fixed block grant to states, a really bad idea that would seriously undermine the program’s ability to respond to need. Trump has said he’d like to preserve the ACA requirement that insurers cover those with preexisting conditions. Great. But for that part of the law to work, you need healthy people to subsidize sicker people. That implies mandates, and if you mandate coverage, you must have individual subsidies and “community rating” (no individual underwriting). Without such provisions, the preexisting-condition requirement is meaningless, as eventually premiums for those people will be unaffordable. In other words, pulling one or two threads out of the ACA is a lot harder than Trump realizes.
Next, on his first day in office, Trump has pledged to cancel “every unconstitutional executive action, memorandum and order” issued by Obama. Whether or not such actions were actually unconstitutional will not matter, of course (some immigration/environmental orders were challenged on constitutional grounds, but the economic ones were not).Consider the overtime rule, a new measure by the Obama administration that updates the long-ignored salary threshold below which people must be paid time-and-a-half when they work more than 40 hours a week. The measure goes into effect Dec. 1, and it could take the Trump administration as much as a year to unwind it. But when it does so, an estimated 4 million low- and middle-wage workers will lose their eligibility for overtime pay. Similarly, I expect Trump to roll back anti-inversion tax rules that the Treasury Department just put in place to make it more expensive for multinational corporations to pretend to incorporate in other countries, when all they’re really doing is moving their tax mailboxes abroad to avoid U.S. corporate taxation. I expect this to occur even if Trump is able to lower corporate tax rates to 15 percent — there are numerous tax havens out there with even lower rates. If Trump chooses this path — and I’m not even getting into deportations or the Supreme Court — it will not only represent the reckless application of presidential power. It will show many of his supporters that his populism was merely for the campaign. His actual policies would help rich families like his own far more than the displaced factory workers who bought the candidate’s economic message. His trickle-down tax cuts would reduce the tax bill of a middle-income family by $1,000, on average, while saving multimillionaires in the top 0.1 percent an average of $1 million. If he goes after health care and overtime coverage, he’ll be targeting programs that mostly help low- and middle-income Americans. Should he make it easier for companies to invert and thus avoid taxes, he’ll be boosting multinationals’ profits and incentivizing them to leave the country on paper, not encouraging them to boost jobs here at home. We can’t yet know if Trump will pursue these actions, but we do know that he can. And for many of his constituents, that may lead to a rude awakening.
