What will Republicans do about tax cuts if they win the White House and retain Senate and House majorities? Think of a big number. Then a bigger one. And keep going.
Josh Barro, of the New York Times’ politics and policy website, calls the Rubio-Lee proposal the “puppies and rainbows tax plan.” It’s an excellent analysis, except his conclusion.
Barro correctly identifies a split within the Republican Party over taxes, with one faction preferring traditional supply-side cuts intended to encourage economic growth, and a newer group pushing cuts designed to support families. He argues that Rubio-Lee simply combines both and creates a huge, budget- busting tax cut by adding “family-focused” measures such as an increase in the child tax credit to staples such as reductions to corporate tax rates. (For critiques of Rubio-Lee from reform conservatives, see Ross Dothat here and James Pethokoukis here.)
But then Barro goes off course:
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“If Republicans win the White House and hold Congress after the 2016 elections, it’s likely a tax cut will follow. But given the long-term budget outlook, it is not likely to amount to the several trillion dollars the Rubio-Lee plan would cost. When it becomes clear that a budget constraint exists, and that a new Republican administration can hand out only so many hundreds of billions of dollars in tax cuts, who will win: the puppy lobby or the rainbow lobby?”
The answer has been easy to guess ever since conservatives fully took over the Republican Party. The last two times they captured the White House with working majorities in Congress, it didn’t “become clear that a budget constraint exists” until well after huge tax cuts were signed into law. And it won’t next time, either.
In fact, it’s extremely likely that Jeb Bush will soon propose something that trumps the puppies and rainbows plan. How about: puppies, rainbows, nice summer days and motherhood? That what his brother did in a similar situation 16 years before. George W. Bush, like Jeb, was perfectly acceptable to the party on core policies such as abortion, but was a bit shakier on some peripheral issues, and wanted to run a relatively centrist general election campaign. The solution was to push farther than any of his major primary competitors on taxes, figuring that tax cuts were an important enough party goal that any skeptics would overlook other deviations from party orthodoxy.
Jeb Bush’s situation today is essentially a variation of his brother’s. If immigration, Common Core, and other issues are disqualifying, then Bush is toast. And he can’t really flip-flop on them now. What he can do – and likely will do – is to bet that no one really cares about that stuff (just as no one really cared about Mitt Romney’s credentials on health care in 2012). Or, to put it another way, several smaller issues are just tests for True Conservative credentials, and anyone pushing big enough tax cuts will pass that test with plenty to spare.
And if that’s what Republican candidates run on, that’s what’s they will do if they win. Elected politicians tend to keep their promises.
Of course, all of this assumes that very few Republicans care about federal budget deficits. For evidence of that assumption, all we have is the record of the last 35 years of U.S. political history. So expect big, unfunded tax cuts if Republicans win in 2016.
Jonathan Bernstein is a Bloomberg View columnist covering U.S. politics.