How the 2016 Election Changed the Political Calculus

Listening to the House and Senate campaign committee chairs, both Democratic and Republican, at a Wall Street Journal-sponsored panel on Thursday morning, it hit me how different the conversation is today than it would have been had Hillary Clinton won last year.

Given the strong propensity of a president’s party suffering midterm-election losses, we would likely be focused on possible Republican gains and on the House Democrats sitting in districts Donald Trump won, not on the Republicans sitting in districts carried by Clinton. In the Senate, we would be wondering just how badly things would go for Democratic incumbents and how close Republicans could get to a 60-seat supermajority. Certainly, a four-to-seven seat GOP gain would have been entirely plausible. Instead, we are talking about whether Republicans can hold their House majority and how close to a wash we’ll see in the Senate.

Some Democrats would quibble, saying that they could pick up a net gain of three Senate seats and a majority next year, but realistically that would be contingent on former Democratic Gov. Phil Bredesen running and winning Sen. Bob Corker’s open seat in Tennessee, with the Democrats then needing to pick up two more seats currently in GOP hands, in Nevada and Arizona. If Bredesen doesn’t run, Democrats would appear to have no realistic shot at the Tennessee seat or a majority. They would have to run the table, winning every plausible GOP seat while holding onto all 25 of their own seats.

With the outlines of the GOP tax package coming out later Thursday morning, much of the talk on the panel and elsewhere in Washington was about its prospects. For months, Republicans have all but said that because of their failure so far to replace Obamacare, pass a major infrastructure bill, and approve a border wall, their majority in the House rests on getting their tax proposal enacted into law. As Rep. Steve Stivers, chairman of the National Republican Congressional Committee, said during the panel, “We’ve got to show folks that we can get it done.” True enough, but I’m not sure I would go with the “judge us by what we get done” argument that so many Republicans are making. After all, what happens if they can’t get it passed? That would mean they’ve conceded their majority. Do they really want to say this is existential?

A few weeks ago, an astute Republican operative suggested to me that “the rising Dow makes doing tax reform harder.” After all, the operative said, “if part of the message is that U.S. corporate taxes are too high, how can that be a problem if the stock market is soaring? No one feels bad for American companies right now. They are making plenty of money.” With markets hitting new peaks almost every week and consumer confidence at or near record highs, are Republicans pushing their tax overhaul for theological reasons (because they hate taxes in any form), or are they proposing a solution in search of a problem just so they can say they passed something? This Republican argued that the focus ought to be on “reform.” Indeed, everyone thinks our tax system is a complicated mess.

I remain skeptical that a major tax bill will be enacted. A savvy Democratic lobbyist made the case to me that if Republicans try to rush their proposal through this year, it will likely fail, but if they handle it carefully and methodically, they might pull it off. Of course, a deliberative approach flies in the face of the GOP’s belief that the package has to be enacted before the election year begins in January.

This raises the question of what Republicans will say if a big tax bill doesn’t pass. While not addressing that question directly, Stivers pointed to laws that the GOP has passed and Trump has signed that reversed many Obama-era regulations, arguing that regulatory relief is one of the engines of economic growth right now.

Before we know the fate of the tax package, we will know the outcome of next Tuesday’s elections, particularly the New Jersey and Virginia gubernatorial and state legislative contests. Given Gov. Chris Christie’s historically low job-approval ratings, a Democratic win in the New Jersey race is a foregone conclusion. The Virginia race appears to have tightened up, but Democratic Lt. Gov. Ralph Northam has maintained a narrow edge over Republican nominee Ed Gillespie. Some smart political analysts think if Gillespie pulls off an upset, it would dramatically change the national narrative that “Republicans are in big trouble.” In short, Democrats have a lot to lose in Virginia and Republicans a lot to gain.

This story was originally published on nationaljournal.com on November 3, 2017