One big ugly mess

President Trump is a centrist on the issue of foreign military intervention. He rejects the neo-isolationism of Tucker Carlson and company. At the same time, he demands a somewhat higher threshold than the old Republican establishment did for using military force, and a significantly higher threshold for deploying U.S. ground forces. The new interventions he’s been willing to undertake consist of discrete, targeted strikes rather than long commitments.

What about domestic policy, though? Has Trump found the center there?

Answering this question would require a multi-issue an analysis. I think that analysis would conclude that Trump has found the center on some matters and rejected it on others.

I will limit this post to a discussion of where Trump stands on what I believe is our most important domestic issue set — spending, taxes, and the debt. In other words, the Big Bill pending in the Senate.

This bill is not centrist legislation. It does, though, seek something like the center of current Republican thinking.

There are three Republican factions when it comes to spending, taxes, and the debt: the old-fashioned fiscal hawks, the supply-side tax cutters, and the populists. It would be impossible to satisfy all three factions, but the Big Bill more or less satisfies the latter two.

The supply-side tax cutters get some tax breaks they believe will spur economic growth —e.g., the deduction for research and development expenses — though not to the extent they wanted. In addition, of course, the 2017 tax cuts are extended.

The Tax Foundation estimated that the Big Bill would increase economic growth by a little less than one percentage point (0.8) By contrast, it projected that the 2017 tax law would increase growth by 1.7 percentage points. Even so, the bill is still supply-side legislation to some degree.

It’s also populist legislation. Populist features include no taxes on tips, the addition of $6,000 to the standard deduction for seniors, and the increased child tax credit. There’s also the partial repeal of the cap on state and local tax deductions, which will cost hundreds of billions of dollars in federal revenue.

However one views these goodies — exempting tips from taxation makes no sense to me — they are not pro-growth measures. They are populism in action.

Other things being even in the ballpark of equal, I’m all for pro-growth tax incentives and for leaving more money in the hands of individual taxpayers. But things are not in the ballpark of equal when our national debt exceeds $36 trillion.

The Congressional Budget Office estimates that the Senate version of the Big Bill will add more than $3 trillion to the national debt over the next ten years. This is just an educated guess, but it might be conservative because it does not include increased borrowing costs. These would be substantial because, even with various spending cuts, the legislation is largely deficit-financed.

Without some form of this legislation, taxes will increase. That’s the main argument in favor of passage and it almost certainly will carry the day.. But the 2017 tax cuts could have been extended without larding up the bill with populist giveaways. That would have been a more centrist approach.

Moreover, as Erick Erickson points out, “taxes are going to go up on everyone significantly eventually because this legislation does not seriously tackle the issues of our fiscal solvency.” “Eventually” is still a ways away, though not as far away as many think. Trump won’t be in office when it arrives, but many who vote in favor of the Big Bill might still be.

At this point in the process, it probably makes sense politically to pass some version of a Big Bill, though Erickson questions whether even this is so. But political exigencies shouldn’t obscure the fact that this is very bad legislation.

I’ll conclude by returning to the question of whether Trump has found the political center here. The evidence suggests he has not.

A Washington Post-Ipsos poll found that Americans oppose Trump’s bill by almost a 2-1 margin. A good deal of this opposition comes from those concerned about the bill’s effect on the social safety net. However, 63 percent said that the estimated $3 trillion increase to the national debt is “unacceptable.” (Only 13 percent found it “acceptable.”)

Perhaps tax increases might have been even less acceptable. But the fiscal irresponsibility of the Big Bill has not gone unnoticed by voters and apparently voters don’t take it lightly.