Monday, December 18, 2017

Passing Through to Corruption

Unless something drastic happens, this will be the week Republicans ram through a tax cut that adds more than a trillion dollars to federal debt while undermining health care for millions. They will do so by violating all previous norms for major legislation, having held not a single hearing and rushed to a vote before the new senator from Alabama could be seated.

The question is, why are they doing this? For this bill isn’t just a policy crime; it also seems to be a political mistake. It will, however, be good, one way or another, for the bank accounts of quite a few Republican members of Congress. Is that why it will pass?

About the politics: Normally, politicians willing to add a trillion dollars to the debt can hand out enough goodies to make their plans popular, at least for a while. The George W. Bush tax cuts heavily favored the rich over the middle class, but they contained enough clear middle-class tax cuts to have broad public approval, at least at first.

This bill, however, faces heavy disapproval. Ordinary voters may not be able to parse all the details, but they have figured out that this bill is a giveaway to corporations and the wealthy that will end up hurting most families. This negative view isn’t likely to change.


Nevertheless, Republicans have persisted. Why?

One answer may be that they really believe that tax cuts will unleash a huge economic boom. There’s almost complete consensus among experts that it will do no such thing — but the G.O.P. has been waging war on expertise in all fields. (Among the terms reportedly banned by the Centers for Disease Control and Prevention are “evidence based” and “science based.”)

So you get people like the Republican congressman who told CNBC’s John Harwood that his colleagues told him there are models predicting huge gains (there aren’t), that he doesn’t know what those models are, but that he trusts his party’s line.

Another answer may be that Republicans believe that legislative victories put “points on the board,” helping their electoral prospects, even if the bills are unpopular. Obama officials thought the same thing back in 2009 — but they were wrong: Major legislative victories on economic stimulus, health care and financial reform did nothing to stop disastrous losses in the 2010 midterm elections.

The final, and most disturbing, possible explanation for the behavior of Republican legislators is that they’re supporting legislation, knowing that it’s bad for both the country and their party, because it’s good for them personally.

Some Republicans have been quite open in saying that they felt compelled to push forward on corporate tax cuts to please their donors. But I’m talking about more than campaign finance; I’m talking about personal payoffs.
Raw bribery probably isn’t the issue, although insider trading based on close relationships with companies affected by legislation may be a much bigger deal than most realize. But the revolving door is an even bigger deal. When members of Congress leave their positions, voluntarily or not, their next jobs often involve lobbying of some kind. This gives them an incentive to keep the big-money guys happy, never mind what voters think.

One perverse effect of this incentive is that recent G.O.P. electoral losses may have strengthened the party’s determination to do unpopular things. Suppose you represent a mildly Republican-leaning district in, say, California or New York. Given what looks like a building Democratic wave, your odds of keeping that seat next year look low whatever you do — so it’s time to focus on pleasing your future employers on K Street.

And when it comes to the Senate, bear in mind that many senators are personally wealthy, meaning that they might be swayed by policies that enhance their personal fortunes. Which brings us to the “Corker kickback.”

Senator Bob Corker, citing concerns about the deficit, was the only Republican to vote against the Senate version of the tax bill. Now, however, he says he will vote for a final version that is no better when it comes to fiscal probity. What changed?

Well, one thing that changed was the insertion of a provision that wasn’t in the Senate bill: Real estate companies were added to the list of “pass-through” businesses whose owners will get sharply lower tax rates. These pass-through provisions are arguably the worst feature of the bill. They will open the tax system to a huge amount of gaming, of exploiting legal loopholes to avoid tax.

But one thing they will also do, thanks to that last-minute addition, is give huge tax breaks to elected officials who own a lot of income-producing real estate — officials like Donald Trump and, yes, Bob Corker.


Corker denies that he had any role in adding that provision. But he has offered no coherent alternative explanation of what changed his mind about voting for a bill that explodes the deficit.

We may never know exactly what happened with Corker. But there’s every reason to believe that Republicans in Congress are taking their cues from a president who openly uses his office to enrich himself. Goodbye, ideology; hello, corruption.



NYT

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