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Donald Trump Has Already Carved a Lasting Legacy

The tax reform bill crowns a year’s worth of policies that will be difficult, perhaps even impossible, to reverse.

Brendan Smialowski/AFP/Getty Images

While it would be comforting to Donald Trump’s opponents to focus on the fact that in the first year of his presidency, usually a period when a president is strongest, he got but one major bill through the Congress—albeit a sweeping tax bill that will affect virtually all Americans—he’s had a much greater impact on domestic policy than it might appear. For one thing, the Republican Congress slipped into the tax bill other major pieces of legislation that wouldn’t have won approval on their own. For another, through that tax bill and a relentless effort to undo regulations—if Barack Obama did it, it must be wrong is just one reason, while the other is that affected industries successfully lobbied the Trump administration for the roll-backs—Trump has not only made breathtaking changes in domestic policy, but is also wreaking significant damage that can’t be undone. In fact he’s done more in his first year to leave a lasting legacy than some two-term presidents. Trump is given to characteristic exaggeration in rating his legislative record—saying, even before the tax bill was passed, that he’d gotten more done in the Congress than any president since Franklin Roosevelt. This was laughable, but his impact on the domestic arrangements of our national life isn’t.

Most of the commentary on the tax bill that focused on what the White House and Republican leaders gave (or promised, whatever their actual intent) to this or that senator to obtain a majority in that body (the House wasn’t in much question) for a deeply unpopular piece of legislation missed the point of why Trump snagged his sole significant legislative victory. The Republicans understood that if the bill were defeated, they themselves would have accomplished nothing legislatively, and that when they next faced voters in the following November’s midterm elections, this failure would haunt them. (Yes, yes, except for the confirmation of Neil Gorsuch to the Supreme Court, but that didn’t involve legislative maneuvering.) The obloquy that would fall upon them for having done nothing could have  cost many of them their seats—and perhaps jeopardized their party’s control of both chambers. Even “safe” seats could be at risk. Their own followers could have difficulty mustering enthusiasm for going to the polls. Republican incumbents could face an intra-party challenge to their candidacy. Emboldened Democrats could mount unprecedentedly strong contests. And Republican donors were credibly threatening to close their wallets if the 115th Congress didn’t produce a tax bill to their liking. No Republican senator wanted to be the author of such a political calamity. (Even those who were planning to retire weren’t giving up on any prospect of a future public life.)

Looked at in this way, it’s no surprise that the tax bill so nakedly favored the very wealthy and businesses. And it’s not clear that, but for the policymakers’ stated rationale that it was essential to cut corporate taxes—the final bill reduced them from 35 percent to 21 percent—there would have been a tax bill at all. As for the supposed cuts in personal tax rates, they’ll soon be overtaken by new expenses—in particular, health care costs. The tax cut legislation was carried along on a river of myths. Republican leaders are particularly adept at creating myths, and perhaps they’ve repeated those myths so often that they’ve come to believe them. For example, while the 35 percent corporate tax rate is high as such taxes go in the world, studies have shown that as a result of loopholes and special breaks corporations simply don’t pay the 35 percent rate. In fact, a study of consistently profitable Fortune 500 companies from 2008 to 2015 showed that, as it happens, they paid an average rate of a 21.2 percent, nearly the same amount that the new tax law stipulates. Moreover, of 258 Fortune 500 companies studied, 18 corporations, including General Electric, Priceline, and Pacific Gas and Electric, paid no corporate taxes at all over the eight years, and 48 companies, or a fifth of those surveyed, paid at a rate of under 10 percent. The study even found that nearly half of the companies with substantial business overseas paid higher rates to foreign countries than they did to the United States. Yet the myth of the overburdened, “non-competitive” corporations persisted, to the point where the non-existent need to lower corporate tax rates was the principal “rationale” for the tax bill. It’s unknown how many of the policymakers were in on the joke, but if some were, they were quite skilled at keeping a straight face when they talked about the ostensibly exorbitant 35 percent corporate tax. Or perhaps this was one of those instances where policymakers have come to believe their own myths.

The business interests pushing for the bill were no fools, and they—including Donald Trump and his family—received various new tax breaks for their companies and for themselves, through so-called pass-through companies that allowed them to pay lower income taxes, or having their company pay them a small salary but large dividends, which are taxed at rates lower than personal rates. Andrew Ross Sorkin wrote in The New York Times, “[P]rivate equity and real estate executives ... will make out like bandits under the new system.” Sorkin argued that it’s not the merely rich but the super rich who stood to do particularly well under the tax bill. Not just Trump, but numerous senators also had substantial investments in real estate, an industry that made big gains under the tax bill. We were presented with the rancid spectacle of elected politicians writing laws to enrich themselves. At least theoretically, that’s not why people go into politics.

In fact, there was no genuine rationale for cutting taxes at this time. Thanks in large part to Barack Obama’s legacy the economy is essentially doing well: Unemployment is low (4.1 percent) and the stock market has been reaching unprecedented heights (in part because investors have believed that Trump would look out for them). The poor are largely ignored; moreover, the Trump White House is seriously considering further reductions in welfare aid. (Paul Ryan isn’t the only person in Washington who subscribes to Ayn Rand’s thinking about the poor as unworthy—he used to keep her books on his office desk—though it’s not known if the president is aware of her.) The one serious economic problem is that wages for the working class have been stagnant, but one would have to subscribe to another myth to believe that the tax bill will help them. That is, the premise that has undergirded the push for tax cuts since Ronald Reagan’s administration, but has yet to come to pass: Lowering taxes will produce significant economic growth. 

The problem for the Republicans, though, is that the tax bill could turn out to be a political boon for the Democrats. Its essential unfairness will be easy for the Democrats to campaign against. Republican officials maintain that when people see an increase in their paychecks next year they’ll like the tax bill. But the cut will be a paltry one, and they’ll be reminded frequently that the very wealthy are getting much more tax relief. Middle class people don’t earn enough to make themselves into corporations. Furthermore, because the tax bill contained a provision to virtually cripple Obamacare by eliminating the mandate that individuals must buy health insurance, which has gone a long way toward funding the program—a move that is expected to eliminate coverage for thirteen million people—their health care costs could overtake the income tax cut for the middle class. Additionally, people who live in blue states will also see a tax increase as a result of the bill’s capping (at $10,000) the deduction for state and local as well as property taxes. This new limitation on such deductions was a deliberate move, in the name of “tax reform,” by the red-state Republicans to hurt taxpayers who live in blue states—the relatively high-tax, more programmatic states on the West Coast and in the Northeast, which also have higher housing costs. It also might weaken the state and local workers union, an activist pro-Democratic group that Republicans particularly despise.            

Trump has taken to bald-faced lying about the effect of the tax bill on him. Actually, the lie has taken two forms: that he doesn’t benefit from the new law, and that the new law hurts him. It’s without precedent to be able to see that an occupant of the Oval Office has engaged in self-dealing—by his own admission. Speaking by phone from China, he told a group of Democratic senators being briefed by administration officials on their proposed tax bill that he had supported what was at that point a complete repeal of the estate tax (the final bill protected $11 million for individuals and $22 million for couples from the tax). The president said, “We put in the estate tax repeal because there is nothing in this bill for rich guys like me.” In order to help those “rich guys”—we’re talking gazillionaires, not your everyday multi-millionaires—according to tax expert David Cay Johnston, ordinary workers such as first responders, traveling salesmen, and freelancers will no longer be able to deduct expenses such as uniforms and guns and ammunition, tax preparation fees, unreimbursed travel expenses, and union dues. 

Graduate students are to be particularly hard hit through elimination of deductions for the costs of seeking a graduate degree. (No, you’re not imagining that you see an ideology lurking behind the elimination of tax benefits to people in these particular fields.) The new tax law left intact deductions for the use of corporate jets, traveling salesmen’s bar tabs, and the cost of executive retreats, for example to golf clubs such as those owned by Trump. Such mean-spirited cuts in tax benefits for those who needed them helped the lawmakers stay within the $1.5 trillion limit on new debt without cramping the more desirable new tax benefits for those at the very top, such as Trump and his super rich friends. Sometimes a scandal is so vast, so pervasive, that it’s difficult to see it; it begins to look normal.

Whether Trump had any role in the insertion of a provision in the final bill that hadn’t been adopted by either the House or the Senate—this is most unusual—that gave a nice present to people in the business of real estate, which include Trump and numerous members of Congress themselves, isn’t known at this point. Unlike his predecessors going back to Richard Nixon, Trump refuses to release his tax returns (it’s possible, though, that special counsel Robert Mueller has obtained them), so the exact extent to which Trump will benefit from the new tax law can’t be known—but benefit he will, by a very large amount.  

Can the GOP’s victories be reversed? Some Democrats may be comforting themselves with the thought that the legislative damage caused by Trump can be rolled back if they take both houses of Congress in next year’s midterms—an uncertain but not impossible prospect. But they and much of the rest of the country might well find that repairing Trump’s domestic policy damage is very difficult. Even if they could pass a new tax bill to offset the just-passed one it’s highly doubtful they‘d have enough votes (two-thirds of each chamber) to overcome a presidential veto. Further, it’s unlikely in any event to be easy to eliminate the 2017 tax bill root and branch. While Democratic presidents have been able to raise rates to overcome big cuts by their Republican predecessors, it could be quite difficult to take away all the numerous breaks that businesses will have just won. Democrats also have business donors, if not as many of them—which makes them all the more valuable. And those individuals who’ve been hurt by the bill  cannot be retroactively healed. The pain will have been suffered, and the Republicans have made sure that there won’t be enough money to compensate for what was lost.

In the 2018 legislative year, the Republicans will push for cutbacks in almost all domestic spending, with an emphasis on entitlement programs such as Medicare and Medicaid and also the welfare program. While creating a debt through tax cuts and then cutting benefit programs for ordinary citizens has been Paul Ryan’s dream since his college days (and he has allies for this on the far right), such cutbacks could be harder for the Republicans to pull off than the tax bill was. With the addition of Alabama’s Doug Jones, and the Democrats presumably united against such cutbacks, and at least two Republicans presumably unwilling to go along with steep cuts in these programs, it could be difficult to get a majority behind them. Moreover, in light of the $1.5 trillion by which it’s estimated that the tax bill will raise the national debt—some estimates say its cost will turn out to be higher, but the $1.5 trillion figure is convenient because that’s all the new debt that’s allowed under the budgetary rules—Democrats will be hard-pressed to increase spending on any domestic program, much less enact new ones. This is exactly how Ryan and his like-minded colleagues want it. 

As for other domestic effects of Trump’s first year, this session of Congress is ending without a renewal of the once-popular (on a bipartisan basis) Children’s Health Insurance Program (CHIP); funding stopped as of October 1 and some states are running out of money for it. Renewing the program for five years would cost $8 billion, chump change in comparison to the tax cuts for the wealthiest citizens. (Update: At the end of the session an embarrassed Congress extended CHIP until next spring, still leaving it without a longterm commitment.) But even if CHIP were somehow funded again next year, other domestic effects of Trump’s first year will be more lasting. True, if a Democrat were elected president in 2020 and there was also a Democratic Congress perhaps taxes could be increased in 2021. But that’s a long way off and meanwhile the lives of millions of middle class and lower-income people will have been adversely affected. 

As a result of a bizarre Senate rule, the two entire pieces of legislation that were tucked into the  tax-cut bill were only in the most tenuous way connected to taxes (they would raise federal income): crushing the spine of Obamacare by killing the individual mandate that largely paid for it, and opening up the Arctic National Wildlife Preserve to oil drilling—which oil companies have been seeking for decades. (The latter was to guarantee the vote of Alaska Republican Senator Lisa Murkowski.) Of course, once a long-protected scenic area has been opened to drilling it can’t be undrilled; a spoiled wilderness cannot be unspoiled. Trump and Interior Secretary Ryan Zinke (he of the flagrant use of government planes and helicopters for personal business, such as to make it to a horseback ride with Vice President Mike Pence) have stated that they’re just beginning on their ideologically and corporate-driven plan to open up public lands for private plundering (they wouldn’t use that word, of course). The Congress thus far seems numb to such actions and by habit doesn’t intervene in what they regard as an order by a president to a cabinet department.

Perhaps Trump’s most expansive act of turning public lands over to exploitation by private industry was his order earlier this month to reduce the Bears Ears National Monument in Utah by 85 percent. The park, created by Obama near the end of his presidency, has been home to and treasured by five Native-American tribes. (Trump hasn’t exactly displayed sensitivity toward tribes, interrupting a ceremony in the honor of some Second World War heroes by taking a jab at Elizabeth Warren, whom he refers to as “Pocohantas.”) Though Trump and Zinke say the privatization of Bears Ears is a states rights issue, in fact the area is rich in uranium and oil. Developers of both had for years been demanding access to Bears Ears land and they reacted with fury to Obama’s order to create it.

It can be argued that Trump’s domestic policy achievements were much greater in the area of deregulation than in legislation. A president has virtually unilateral power to impose new regulations or to remove them. Obama issued a great many regulations, particularly in the area of the environment, and Trump has been steadily overturning them. As in case of the tax bill he’s solicitous of the desires of industry. For example, he rolled back an executive order protecting coal miners from black lung disease—indicating that his steps to revive coal mining have been made to favor coal mine owners rather than coal miners. Coal mining jobs decreased significantly under Obama, who pushed for the use of cleaner sources of energy. While there’s been a slight increase in coal mining jobs under Trump they’re nothing on the order of his wild boasts, and he’s fighting reality. His pulling out of the Paris climate accord was of a piece with his and his top officials’ denial of climate change and his administration’s retrograde actions on the climate. Damage to the climate is taking place now, which will make it and its effects, for example more hurricanes and greater flood damage from them, all the harder to reverse. 

Thus, after his first calendar year in office, his paltry legislative achievements notwithstanding, an unpopular president—the most unpopular ever in a first year—is having a broad and lasting impact on this country’s domestic arrangements. No matter how long he turns out to have served, his sizeable footprints will be very difficult to erase.