Republicans must shift their focus to policy issues



Dartanyan Edmonds

For years Republicans have ignored the concerns of working-class white voters who have increasingly been voting for them.  Back in 2008, journalists Ross Douthat and Reihan Salam wrote a book, “Grand New Party,” which argued that Republicans were falling out of touch with the economic concerns of their base of working-class whites (and the American middle class more broadly).  According to Douthat and Salam, instead of offering the middle and working classes concrete benefits, Republicans were pursuing policies that didn’t have any appeal and needed to reform their policy agenda.  Since the Bush years, Republicans have been losing in the war of ideas against their Democratic counterparts.

During and immediately after the Bush years, Republicans pushed for privatizing Social Security, said virtually nothing meaningful about healthcare, touted federal income tax cuts that wouldn’t help middle class families, and talked vaguely about deregulation.    

 This is essentially why Donald Trump is going to be president.  As I wrote in my last column, Trump won because Democrats alienated working-class whites.  Republicans have done the same for years now, and that’s why working-class voters nominated Trump for president in the first place: He wasn’t the typical Republican who would disappoint them (or so they thought). I never supported Trump, but since he is going to be president he needs to look for concrete ways to deliver some of the promises that he made on the campaign trail while he works with the newly elected Republican Congress.  There are a number of policy issues that Republicans could work on to do this.  

Trade.  Republicans have generally favored free trade.  They should continue to do so.  But Trump’s right in saying that some workers have been harmed by free trade agreements.  When excoriating free trade, critics typically discuss it in the context of manufacturing job losses.  To be sure, there have been some losses in manufacturing jobs over the last decade or so.  And trade has had something to do with them.  But as James Pethokoukis of the American Enterprise Institute points out, the primary cause of manufacturing job losses is automation.  The truth is that protectionism, which Trump has advocated for, won’t bring back American jobs.  Moreover, trade has actually benefited Americans.  It has brought much needed capital to the U.S. and has boosted wages by about $1,300 annually for the last two decades, according to James Capretta of the Ethics and Public Policy Center.   

As opposed to protectionism (which would stunt economic growth and raise prices), Trump would do much better to adapt to our new free trade environment by cutting the corporate tax rate to make America more globally competitive, providing limited safety-net programs that would serve American workers hurt by job loss, and retraining programs that would reintegrate such workers into the labor force.  

Healthcare. Republicans have long talked about repealing and replacing Obamacare.  They’re right to do so.  Premiums are set to rise by 22 percent next year, according to the Obama administration.  Conservatives now have the opportunity to replace it, but they need to operate with care.  Many Americans receive subsidies for purchasing healthcare from the law and enjoy insurance protections for their preexisting conditions.  However, these structures of the law are some of Obamacare’s worst features.  The ban on insurers discriminating against patients with preexisting conditions, for example, is a large driver of premium spikes, since insurers lose money as sicker and older patients flock to the healthcare exchanges, while the young and healthy stay away from the exchanges. The young have no incentive to get insurance, since they can’t be discriminated against when they get sick.      

This is why Obamacare needed the individual mandate, a law that compels Americans to purchase insurance or pay a fine.  The mandate was supposed to keep insurers from losing money while covering people with pre-existing conditions (who are high-risk customers) by making everyone buy insurance.  Republicans should scrap the individual mandate—and for that matter, the other regulations and taxes including the employer mandate, the Cadillac tax, the medical device tax, etc.  They should provide a tax credit so that people can purchase at least catastrophic insurance.  And they should loosen Obamacare’s ban on insurers’ discrimination against patients with pre-existing conditions.  As opposed to there being an absolute ban on discrimination, there should be a conditional one: If consumers maintain continuous coverage, then insurers can’t discriminate against them when they’re sick.  This way, everyone will have an incentive and a means to purchase insurance. Additional health insurance purchases would ensure that insurers won’t lose money and spike premiums.  Meanwhile, a freer market with competition should keep premiums low.  

Taxes.  Both Trump and Paul Ryan want to cut federal income taxes to spur economic growth.  But federal income taxes burden neither the economy nor middle-class families’ pocketbooks the way that they did in the 1970s and early 80s.  However, the payroll tax is burdensome to them.  Republicans should offer the middle class a tax cut that actually matches their burdens.  Specifically, they should expand the child tax credit.  The economist Robert Stein argues that our tax code, combined with our old-age entitlement programs, over-taxes parents.  Parents pay the taxes for these programs and spend a lot of money to raise the next generation of taxpayers.  Thus, they are double taxed.  To remedy this distortion in our tax code, Stein advocates for an expanded child tax credit that can be applied against both federal income and payroll tax liabilities. Conservatives have always championed the credit.  But they should expand it to help working parents, even if that means scrapping some desired supply-side tax cuts to make room for the credit.    

Ideas like these have been touted by conservative intellectuals and policy wonks for some time now, but the GOP hasn’t fully adopted them.  Given Trump’s unpredictable behavior, it’s hard to know if Republicans will under his leadership.  But they should.  Their future electoral victories depend on offering something to middle and working-class voters.  What is politics for, if not the people’s benefit?