Into the Valley of …

by on May 8, 2017 in Economics, Politics

… Death rode the Republicans in the House?

Why on earth did they do what they just did?

Yesterday I argued it was all about tax cutting. After all, there is a very large faction in the House Republican caucus that thinks cutting taxes is why it exists. For those folk everything, every aspect of government policy, is seen through the lens of taxes.  Their long held aim is to “starve the beast”. Long ago they lost the ability to convince voters that social programs were the thin end of a communist wedge — Reagan infamously called Social Security a communist plot to undermine good old American values. You know, values like poverty in old age. Having lost that fight they cunningly sought a different, more subtle approach. If you cut taxes enough you can create the illusion that the country cannot afford all those programs. Then you can appear tough and responsible when you advocate entitlement reform. You can even wring your hands and look as if you hate what you have been forced into doing.

So cutting taxes is very high on the agenda in today’s Republican party, and eliminating those Obamacare taxes on the rich  must feel good to the tax obsessed members of Congress, most of whom I am convinced, never read the legislation they just voted on.

But this legislation is so bad, it so contradicts every word they say about it, and it will, if put into place, so damage the lives of the voters who flocked to Trump’s populist cause last year, that they must, surely realize what they did.

No one could be so daringly shameless in lying about the consequences of a policy, without some deeper and more urgent motive.

Apart from tax reform, what could that motive be?

Party unity.

The contemporary Republican party can scarcely paper over its deep ideological divisions. Much of its recent energy has been derived from the far right Tea Party enabled “Freedom Caucus”. That energy has driven the Freedom Caucus to the center of power. They now control the GOP agenda. In contrast the vapid so-called centrists, who number about thirty, can be relied upon to crumble in the name of party unity at the first sight of a fight.

Take a look at the healthcare reform process:

The first attempt at reform blew up because the erstwhile centrists objected to the ravaging anti-social content of the original plan. That plan had been contstructed to pander to far right concerns. All through the very brief and highly secretive drafting process Ryan, no centrist in any case, and his fellow Republican leaders bent over backwards in order to attract far right votes. The parts of Obamacare most reviled by the far right — apart from its association with Obama himself — were the first things on the chopping block. The mandate to get younger healthy people into the insurance pool, the extension of Medicaid that was helping the poor, and the tax increase to pay for that extension all had to go. The subsidies that helped poor people pay for insurance were also hacked at. The problem with this attack was that it obviously undermined the entire premiss of healthcare insurance, it cut away the roots of the plan, and it exposed over 20 million people to the loss of insurance.

That was not a pretty sight, but the Freedom Caucus was insistent. A few moderates signaled that they could not support such an overt attack on poor people in the name of a tax cut for the rich, and Ryan had to stop in order to look for ways to get the moderates to cave. Remember that only 17% of voters supported the original plan, but Ryan was determined to get on with his historic mission to undo socially beneficial legislation like Obamacare.

So he did what he knew would work: he threw a few bones to the moderates. None of those sweeteners significantly improved the plan. In one or two cases: such as the clause allowing states to choose whether to stay in the Obamacare framework or whether to opt out, will almost certainly ruin the insurance market and may well even lap over into the hitherto untouched market for employer provided healthcare insurance. Another: the $8 billion special pot of money set aside to offset the big increase in costs faced by people with pre-existing conditions — their policy premiums will rise rapidly under the new plan — is so far short of accomplishing its stated goal that it is an insult. But $8 billion is all the Freedom Caucus could be strong-armed into giving away. Anything more looked to them like a massive government giveaway to the poor, which is something the Freedom Caucus will never stomach.

And the best card Ryan could play was to rally the party: this, he said, was their moment to leave a mark on history. They could relieve America of the burden of Obamacare and its desire to help the poor, elderly, and sick. They party had to strike back on behalf of the healthy and rich.

That seems to have been enough.

Moderate opposition collapsed almost overnight. They took the crumbs the far right threw them and tried to pretend the new plan was an improvement. It isn’t. They probably know it, but now they’re being loyal to the tax cutting cause. And, who cares about healthcare anyway? As one Republican said over the weekend: no one ever died because they didn’t have healthcare. Or, as another said: the sick probably deserve to be sick because of their bad lifestyle choices, and so why should voters support those bad lifestyles with government aided healthcare insurance?

This is the moral quagmire that the Republicans now swim in. They are totally beholden to the whims and wishes of the far right. Instead of drafting bi-partisan legislation that excluded the far right, Ryan is trying to ram a disaster of a plan down the voter’s throats.

Yesterday I argued that tax cutting was the only driving force behind the Republican agenda. I was wrong: party unity is right up there too.

And so: into the valley …

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