A Mixed Bag of Policy, Politics, and that Tax Bill

President Donald Trump at long last got a major piece of legislation to sign into law Wednesday, after the Republicans in congress rammed through a massive tax cut bill, but it remains to be seen if it will eventually count as a win. Trump and all those congressional Republicans are expecting the public will come to love the law, but for now it’s polling horribly and the Democrats are scoring the political points.

The bill runs more than 500 pages, and from our on-the-side-lines perspective it’s a rather mixed bag. Our guess is that the overall effect on the economy will be salutary, although not to the extent that the Republicans are hoping for, and that as usual the benefits won’t be equably distributed across the country, although not so inequitably as the Democrats are urging people to fear. Both parties should probably be hoping that it’s all largely forgotten by the time the next votes are cast in the mid-term elections.

The main feature of the bill is a slashing of the corporate tax rate from a world’s highest 35 percent to a more-typical-by-world-standards 21 percent, as  frankly and ill-advisedly admitted during a celebratory meeting with the congressional Republicans at the White House. Until then Trump had peddled the obvious fiction that the bill’s main feature is a big beautiful Christmas gift to America’s middle class, and he might come to wish he’d told the truth from the outset.

Although the Democrats were quite right to argue that few corporations pay that highest-in-the-world rate, it’s still true that all those deductions merely whittled that rate down and still left American corporations at a disadvantage in the competitive world market, and although it’s not likely to benefit the overall economy to the extent Republicans are hoping it won’t hurt and bit and will surely do some good. The stock markets had a slight downturn on Wednesday, but that’s because investors had already added in the anticipated passage of the bill during its recent record-setting runs, and we’ve no doubt there would have been a bloodbath of red if the bill hadn’t passed.

There’s a certain segment of the Democratic party and the more general left that resent anything that benefits corporations, but even such Democrats as President Barack Obama recognized that the economy can’t do without them for now and were also on board with a corporate tax cut. If that had been touted as the main feature of the bill, the Republicans might have coaxed a few votes from Democratic representatives and senators in districts and states where corporations are major employers and majors donors, which would have given some bipartisan cover in case things go wrong.

The bill also delivers some tax cuts to the middle class, although not all of it, and even many of the beneficiaries might conclude that it’s not as big and beautiful a Christmas gift as was promised. Despite all the populist rhetoric on both the left and the right the hate top 1 percent pay bear about half the country’s tax burden, the top 20 percent pick up 85 percent of the tab, and a full 60 percent pay either no federal income taxes or so little that any further cuts would only amount to little. If you’re in that 50-to-80 percent segment of the population that is paying you might get a notable if not princely amount each year until the cuts expire, but if you live in a nice house in a high-tax state or haven’t gotten around to having children or are paying rather receiving alimony or have other certain circumstances it might just turn out to be a tax hike.

How that turns out in the overall mid-term voting remains to be seen, but we will hazard a guess that those Republicans holding crucial House seats in such states as California and New York and Illinois are going to regret getting  rid of the state and local property tax deductions. The sorts of Republicans you find in those well-heeled districts with high-priced houses are already inclined to abhor the boorishness of Trump and his burn-it-down populism, and without a stake in a party-line Republican tax bill they won’t have any reason to support the party.

In those less well-heeled and more reliably Democratic districts the law is likely to further enflame the ever-raging fires of class resentment, no matter how salutary the overall economic consequences. All of those congressional Republicans have always denied that the law delivers a far bigger tax cut to the rich than it does the middle class, and Trump has assured his true believers that he’s going to take a huge hit because of it, but these arguments not only verifiably but also obviously untrue. The expert analyses of the bill vary wildly, and you can believe whichever you want based on how they share your ideological leanings until you complete your tax forms, but all of them agree that someone richer than you is going to reap bigger benefits than you.

That doesn’t bother us, as we’re the penurious but Republican sorts who harbor no class resentments, and we still hold out hope of snatching some small benefit from any overall salutary effect on the economy, but we do wish that Trump and all those congressional Republicans hadn’t so brazenly lied about it. The arguments for income inequality are complex and hard to make, but President Ronald Reagan persuasively made it during a longer and more thorough debate for his even bigger tax cut bill, and they always work better than a bald-faced lie. Trump’s lie that all the businesses he scandalously hasn’t divested himself of won’t benefit is particularly galling, and we can’t begrudge the Democrats the political points they’ll score because of that.

The law also repeals the provision of the “Obamacare” law that requires citizens to purchase not only health coverage but health care coverage of a certain type that may or may not be needed, which was the part we most hated about that hated law, but that’s also a mixed bag. Trump brags that he’s kept a campaign promise to repeal Obamacare, which is true enough because eliminating it’s individual mandate will ultimately sink the whole project, but because he hasn’t kept his campaign promise to replace Obamacare with something big and beautiful that will cover everyone at at a far lower cost it’s likely to end up with a lot of people losing coverage and many people more for what they’ve still got.

We do expect the effect on gross domestic product and unemployment numbers will be salutary, though, and hold out hope that some better health care policy will ensue from the coming calamity, so the Grand Old Party might yet survive all the public disapproval of the moment. During their big celebration party at the White House the congressional Republicans took turns lavishing praise on Trump in terms so obsequious they would have embarrassed a North Korean general, on the other, and in the long run the party will suffer consequences for such brazen lies as that.

— Bud Norman

When the Law Isn’t the Law

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The law is the law, according to an old saying frequently used to hector people into obeying the damned things, but that doesn’t seem to be the case with Obamacare.

Yet another White House edict has delayed for yet another year enforcement of the law’s clearly stated requirement that all businesses with at least 50 employees but fewer than 100 provide health care coverage or pay a hefty fine, and after all the other delays of troublesome portions and the waivers to the friendlier constituencies and the assorted regulatory re-interpretations of other clearly stated requirements one can only conclude that the law is whatever the president says it is on a given day. This isn’t a law at all, at least in the sense the term has been understood since Hammurabi had the bright idea of writing laws down so that everyone could discern their meanings and act accordingly, but we expect that anyone other than the president and his more well-heeled campaign contributors will nonetheless be expected to obey whatever the president says it is on a given day.

Putting aside questions of constitutional propriety, as Americans are increasingly wont to do, the administration has practical political reasons for the delay. The White House’s stated reason is that businesses “need a little more time to adjust to providing coverage,” and there probably are a few companies that could use another year or so to figure out what might be expected of them. Judging by the botched computer system that the government unveiled after three years and hundreds of millions of dollars the government could likely use a little more time to adjust as well, however, and those Democrats running in the upcoming mid-term elections will also be grateful for the opportunity to make some adjustments of their own. The employer mandate provides a powerful disincentive for any company with 49 employees to hire another one, and even if the government has persuaded enough people to stop seeking work to push the unemployment rate down to 6.6 percent the economy is still enough of an election issue that the Democratic Party doesn’t need the headache. After the Congressional Budget Office predicted 2.5 million Americans will stop working rather than relinquish their Obamacare subsidies the Democrats have recently been forced to make the argument that those dole-dependent non-workers will be “free to pursue their dreams,” and mounting a defense of socking a rare start-up with hundreds of thousands of dollars in costs for hiring a fiftieth employee is a chore that is best put off another year.

Although it’s not so politically damaging as enforcing the employer mandate, not enforcing the employer mandate still provides the Republicans with some plausible arguments. The move bolsters the Republicans’ oft-repeated claim of a “lawless president,” and with the widely-hated individual mandate still in place they can also gripe that the president is giving breaks to businesses but not individuals. The latter point is hard to argue with but unlikely to be effective, as Republicans have been permanently stereotyped as lackeys of big business, but it’s still good to see them making it. Those “big” businesses with 100 or more employees have also been granted a sort of exemption, although it’s too convoluted to explain here, and with loud repetition of the point the Republicans might succeed in depressing the vote among those corporation-hating Occupy types who are forced to pony up for policies that don’t want or need. The former point might be more saleable, and will also be of use in explaining why the Republicans don’t trust the president to enforce any sort of immigration reform law they might otherwise agree to, but it remains to be seen how many Americans still expect the president to abide by even his own laws.

The president is apparently convinced that only the most hidebound traditionalists still care about such niceties as constitutional checks and balances, and on Monday he even boasted to the France’s admittedly socialist leader Francois Hollande that “the good thing about being president (is) I can do whatever I want.” Older readers might recall a post-resignation Richard Nixon explaining to a dumbstruck David Frost that “If the president does it, that means it’s not illegal,” but it’s hard to think of any presidential utterances since that have been quite so brazen. Nixon was almost universally derided for his comments, while Obama’s will be almost universally unreported, but one can hope that Americans will take notice that the law is the law for them but not for the president.

On the other hand, perhaps the precedent will allow some future president to waive the stupid Obamacare law altogether. Should that happen, however, we expect that the Democrats will once again become sticklers for the law.

— Bud Norman

Former president Bill Clinton, who currently serves in the unofficial capacity of the current president’s “secretary in charge of explaining stuff,” has lately taken on the difficult chore of explaining Obamacare. In recent speeches and interviews he seemed to be trying to explain how the health care reform law will work so wonderfully that everyone will eventually learn to love it, an impossibly difficult chore even for a charlatan of Clinton’s talents, but he wound up explaining why it won’t work at all.

You’d be hard-pressed to find the fatal flaw in the networks’ coverage of Clinton’s much-ballyhooed joint appearance with President Barack Obama, which was devoted mostly to a star-struck awe at the assembled celebrity and much chuckling at Hillary’s joshing introduction and the obligatory recitations of Obama’s “secretary in charge of explaining stuff” honorific. All the top reporters described Clinton’s defense of Obamacare as “detailed,” but they provided few of those details. Although there was some vague acknowledgement that Clinton described a few piddly problems with the law to prove his objectivity and principled partisanship, only the conservative press was gauche enough to mention that Clinton conceded “This only works, for example, if young people show up.”

Anyone with first-hand experience of today’s young people will immediately be alarmed that the success of such an ambitious and expensive program as Obamacare is contingent upon them showing up. Just try getting a timely cup of coffee from the tattooed twenty-something at your local bohemian haunt and you’ll note that their attendance record is spotty at best. When they do show up they’re usually distracted from the matters at hand by some illegibly abbreviated text message, or the monotonous pop music of the moment piped by earphones into their shaggy heads, and even at their most attentive they don’t seem the sorts of people you would want to base the success of a major federal initiative upon.

Worse yet, Clinton expects young people to not only show up but also to shell out significant sums of money for something they don’t want and likely won’t need. “We’ve got to have them in the pools,” Clinton said, “because otherwise all these projected low costs cannot be held if older people with preexisting conditions are disproportionately represented in any given state.” A more frank, and therefore less Clintonian, way of putting it is that Obamacare depends on healthy young people paying premiums for insurance they won’t use in order to pay for a hip replacement on some geezer they’ve never met and probably wouldn’t like. Young people can be quite sincere about social justice when it means that wealth is redistributed to them, but Clinton is seriously overestimating youthful idealism if he expects the youth of today to go along with this plan.

There’s a much-hated “individual mandate” in Obamacare that compels buying insurance, which will be even more hated when the young people are forced to look at the bill in between texts, but for the next several years the fines will be cheaper than the insurance and thus seem a better deal to a typical teenager or twenty-something. The average healthy young person might be persuaded that a low-cost policy insuring against automobile wrecks or out-of-the-blue diseases is worth buying, but such arrangements are now illegal. Lacking any legal or economic rationale for buying any of the restricted number of plans available under Obamacare, the only reason young people have for buying in is to show support for the president who is sticking them with a sizeable health care bill.

Any sore feelings among Obama’s young supporters will supposedly be soothed by the all the subsidies that are going to be offered, but those costs will fall on the taxpayers or the national debt that young folks will be expected to eventually pay and it won’t make Obamacare economically viable. The costs that Obamacare imposes on employers also make it less likely that young people will ever get a job that pays well enough or for enough hours to pay the health care costs, making it more likely that they’ll take the subsidies and send the costs to already overburdened or taxpayers or pay it off themselves later when the debt at last comes due. Many young people will simply stay on their parents’ insurance until they’re 26 years old, another big selling point of the Obamacare law, but only in the increasingly unlikely event their parents get to keep their jobs or their employers continue to provide insurance.

There’s still a faint hope that those crazed fringe Republicans can withhold the money for Obamacare, but there’s no chance at all the law will work as promised. Even Bill Clinton tells us so.

— Bud Norman

Left Goes Right, Right Goes Left

At some point in the last fifty years or so everyone in America seems to have switched sides.

The notion occurred to us during a recent conversation with an old friend about fluoridating the local water supply. Fluoridation of the water supply has lately been a hot topic here in Wichita because this is one of the biggest cities in America that doesn’t do it, and a couple of public advocacy groups have recently launched a well-financed public relations campaign to rectify that oversight. So far as we can tell the pro-fluoridation forces are the usual gang of high-minded public health do-gooders, but we’ve been surprised to notice that most of the opposition to fluoridation, once a cause associated exclusively with far right wackos, seems to be coming from far left wackos such as our friend. We have no strong opinions regarding the issue, and will continue to drink from the taps regardless of the outcome of the debate, but we couldn’t restrain ourselves from teasing our friend about how she’s gone all John Birch Society on us and then taunting her with our best imitation of Sterling Hayden’s “precious bodily fluids” monologue from “Dr. Strangelove.”

Fluoridation is by no means the only issue where the right and left seem to have simultaneously crossed over to a new position. We’re also old enough to remember a time when the defense of Israel was a cause dear only to the hearts of liberals, with Hollywood’s lefties churning out such pro-Israel fare as “Exodus” and “Cast a Giant Shadow,” while conservatives were skeptical of the chances that a Jewish state could ever flourish in the Middle East. The young lefties of our acquaintance are largely unaware that this was ever the case, and indeed most have been surprised to learn that a liberal icon such as Robert Kennedy was killed by a Palestinian assassin because of his staunch support of Israel, while even the rare young conservative typically assumes that his side has been supporting Israel all along.

The liberal enthusiasm for Israel seems to have begun to wane around the same time that nation realized its survival depended on the sort of high-tech military that only a modern and capitalist economy can sustain, and gave up its fantasy of an agrarian socialist kibbutz society. We also suspect that one casualty of the war of ’67 was Israel’s status as an underdog, and that ever since the bomb-throwing Palestinians have had a more compelling claim to the all-important status of victim. The growing conservative support for Israel is likely a consequence of the Catholic Church’s sincere efforts to atone for its past anti-Semitism and the evangelicals’ increasing philo-Semitism, both positive developments as far as we’re concerned, as well as the common sense observation that Judaism is by no means the most troublesome of the religions that have come out of the Middle East.

Anyone old enough to have witnessed the hippie era will recall the left’s former aversion to law enforcement, better known by such slang as “pigs” and “the fuzz,” and will therefore be surprised to note that it is now conservative organizations that most outspokenly oppose “no knock raids” and efforts to outlaw self-defense against rogue police officers. Free speech was once a rallying cry of the left, which now spends its energy crafting campus speech codes and efforts to outlaw anything that might be construed as hateful, but the now the First Amendment absolutists are found almost exclusively on the right. The “individual mandate” requirement that Americans purchase health insurance originated in such conservative think tanks as The Heritage Foundation but become a conviction of the left, which has lately stopped trying to argue that the uninsured are hapless victims and has reverted to the conservative’s more persuasive argument that the uninsured are lazy freeloaders, while conservatives have now adopted the view that they simply want to be left alone to deal with the consequences of their own decisions.

Even such fundamental concepts as individualism and the common good seem to have found new homes along the ideological spectrum. The counter-cultural left once preached the gospel of doing one’s own thing and rebelling against the stifling conformity of conventional wisdom, but now it cheers on a president who explicitly argues that the credit for an individual’s success belong entirely to the collective and that the fruits of that success belong mostly to his government, while the right is waving Gadsden flags and arguing for the primacy of the individual no matter how crude he might seem to respectable opinion.

Such shifts can be expected every time there is a change of party in the White House and Congress, of course. The liberals who were once so ashamed by a war in Afghanistan, a detention camp in Guantanamo Bay, and drone strikes in Pakistan are now predictably silent about the same moral offenses, while conservatives remain ideologically consistent but not nearly so proud and enthusiastic as they were during a previous administration. The legal validity of executive privilege has similarly changed with a change of party in the White House. Since Obama’s inauguration we have noticed that the “Question Authority” bumper stickers have disappeared from the Volvos and VWs and started to appear on pickups.

Such inconsistencies are a normal and thus far tolerable feature of democracy, but the recent realignments seem to represent a more permanent tectonic shift in the cultural and political landscape of the country. The “long march through the institutions” that ‘60s radical Antonio Gramsci envisioned to take control of academia, the entertainment media, seminaries, and other key opinion-making institutions has largely succeeded, and the liberals are obliged to defend it no matter the consequences. Liberals are also in the position of defending the political structures that have been erected since the New Deal, no matter the unsustainable costs of their entitlements, and the unionized police forces seem willing to help in the cause.

So liberalism is now the ideology of the status quo, the conservatives are the anti-establishment iconoclasts, and the lefty peaceniks are the ones worried about their precious bodily fluids. It’s all quite discombobulating, but that’s what we get for living so long.

— Bud Norman

The Ruling of the Court and the Rule of the People

The crucial chore of eliminating Obamacare, and preserving our rights as free men and women, is up to the people now. In a better world the Constitution would protect us from such outrageous expansions of governmental power, but not in this one. Not after the Supreme Court’s ruling on Thursday that the deceptively named Affordable Care Act, better known to the public as Obamacare, is constitutional.

The majority decision for the surprise ruling argues that the act’s “individual mandate” — the requirement that citizens purchase government-approved health insurance or pay a fine — is tantamount to a tax, and is therefore valid because the Constitution grants government the power of taxation. Some conservatives have concluded that the court has given hope for future decisions limiting government power by offering such a circuitous rationale, rather than allowing the law to stand based on a more permissive interpretation of the commerce clause, and one can hope they are right, but future decisions that allow such expansions of government authority on the basis of the power to tax will still be allowing unrestricted government. Nor does the argument change the fact that the immediate consequence of the decision is that the government is allowed to restrict the rights of its citizens in ways that are certain to make the health care system more expensive and less effective.

Defining the individual mandate as a tax does offer one consolation, though, as it should offer much help in the political effort to repeal the disastrous the health care reform law. Obama won election on an oft-repeated promise that no one making less than $250,000 a year would see any new taxes or tax increases, and had famously argued with a television interviewer that the individual mandate did not violate his pledge because it is not a tax, but he now has to run for re-election with his name attached to an historically large tax increase that falls mostly on the middle class or concede that the bill is only constitutional by virtue of a fallacious argument.

The ruling also pushes Obama’s consistently unpopular signature achievement back into the political debate, with a timely reminder of its many faults. Anger toward the bill was a major reason that the Democrats suffered huge losses in the 2010 mid-term elections, and since that time the Congressional Budget Office has found it to be vastly more expensive than previously supposed, its CLASS program for assisted living has been scrapped because of the very reasons its critics had predicted, and insurance costs have steadily risen, so the issue could prove even more effective this time around.

While it would have been a good thing for the Court to establish a firm legal principle that the government cannot compel Americans to purchase products or services against their will, establishing the same rule at the ballot box might be even more effective. The judgment of the people has always settled issues more permanently than the opinions of five Justices, as the ongoing battles over the 39-year-old Roe v. Wade decision demonstrates, and it is possible that it might settle this one correctly.

It is of the utmost importance, however, that restraining the government’s lust for power happen one way or the other. The reason Thursday’s ruling came as a surprise to most observers is that the oral arguments had gone so badly for the government’s lawyer, especially when he was asked what limits on government power would exist if the Constitution somehow countenanced the individual mandate. There’s still no good answer to that question, and it certainly cannot be found in the Court’s decision.

— Bud Norman