OPINION — “There was a $2 trillion tax cut last year. Did you feel it? Did you get anything from it? Of course not. … All of it went to folks at the top and corporations.”
That was Joe Biden at a Pittsburgh union workers’ rally ten days ago.
C’mon, Joe. You know better.
It was an ironic kickoff from the guy who promised the Summer of Recovery in 2010. But the former vice president finds himself in the same politically awkward place as most of the Democratic presidential field and their congressional leaders.
Though they try to maintain the false narrative, the one that worked so well for them in the 2018 elections — that the Republican tax cuts only benefited the rich — the strong economy increasingly undermines their central argument.
Just last week, Speaker Nancy Pelosi said, “Unfortunately, the evidence shows that most of the economic gains continue to benefit those already well off.” That, incredibly, was from her statement in response to the release of the extraordinary April jobs report.
In a CNN town hall in February, Bernie Sanders claimed that 83 percent of the benefits delivered by the 2017 GOP tax cuts went to the 1 percent. CNN “fact-checked” the Vermont senator, reporting, “This isn’t true right now” (the actual news), “but if certain tax cuts are not extended, it will be the case in 2027.” Not surprisingly, CNN’s read on Sanders’ claim reflected the Democrats’ misleading language on the tax cut legislation from Day One.
Kamala Harris claimed earlier this year, “The average tax refund is down about $170 compared to last year. Let’s call the president’s tax cut what it is: a middle-class tax hike to line the pockets of already wealthy corporations and the 1 percent.” The Washington Post gave her statement four Pinocchios. Biden’s rally remarks to the union crowd earned him four Pinocchios from the Post as well.
As a Republican, one can only hope that the media is beginning to acknowledge that there’s hyperbole and then there’s downright disinformation when it comes to the tax law.
But on May 3, the jobs report changed the political calculus. Democrats seemed to suddenly show symptoms of a kind of political schizophrenia. For close to 18 months, the ever-growing crowd of Democratic contenders and their congressional leadership have argued that the 2017 tax cuts didn’t deliver the economic progress promised by Trump and the Republicans.
Pelosi and many others still make that argument. But, after the April economic report, it was suddenly much harder to do. The numbers told a different story, so, as expected, Democrats added a new wrinkle to their narrative. It goes like this.
It wasn’t Donald Trump and Republicans who turned the economy around. No, the credit for last month’s great jobs report — with a 3.2 percent increase in wages, 263,000 new jobs, and a 3.6 percent unemployment rate, a historic 50-year low, especially for minority workers — somehow actually belongs to Barack Obama.
Despite the fact that Obama’s regulatory policies and failed stimulus package gave us the slowest recovery since WWII, Democrats are now contending that, in reality, it was Obama who led the country out of the economic wilderness and Trump is reaping the political benefits. They forget that the stimulus that actually began to put the economy back together again was the push by congressional Republicans’ to make the Bush tax cuts permanent in 2010 and 2013. It was their policies which gave business confidence that there was stability and recovery ahead.
Combine those tax cuts with the smaller-government, free-market economic policies of Trump and congressional Republicans today, and the GOP has plenty of evidence to defend their belief that lower taxes spur economic growth and create jobs. The Democratic presidential contenders are only providing them with more ammunition.
The irony of Democrats’ conflicted narrative is that many of the proposals being offered by their presidential candidates would put the growing economy at risk, and with it, the substantial progress that has been made in terms of growth, rising wages, robust job creation and strong markets.
There’s Sanders’ $32 trillion “Medicare for All” plan, paid for by increasing taxes on capital gains, big banks and the rich.
Then there’s Elizabeth Warren’s great new idea to forgive $1.25 trillion in student loan debt while giving free tuition for two- and four-year public colleges, all paid for by new taxes on the wealthiest families in the country.
Not to be outdone, Beto O’Rourke offered up a $5 trillion climate change proposal to be funded by new carbon taxes, ending oil company tax breaks and raising taxes on corporations and the rich.
Amy Klobuchar only wants a mere $1 trillion for her infrastructure plan, funded with higher corporate taxes and new fees on banks.
That’s going on $40 trillion worth of new spending and taxes that would swamp the federal budget, and there are another 17 candidates with ideas of their own yet to count.
As these candidates and others talk about their extreme proposals, they alarm investors and job creators and rattle the markets, putting the economy at risk.
The Democratic narrative worked in 2018 because Republicans didn’t reach voters with what was a great economic story to tell. May 3 may well be a turning point. Arguing that Americans aren’t benefitting from Republican economic policies just doesn’t pass the laugh test anymore.
David Winston is the president of The Winston Group and a longtime adviser to congressional Republicans. He previously served as the director of planning for Speaker Newt Gingrich. He advises Fortune 100 companies, foundations, and nonprofit organizations on strategic planning and public policy issues, and is an election analyst for CBS News.