Republicans Worry They’ll Lose Congress. Their Solution? Tax Cuts

On paper, the budget resolution being considered in the Senate this week is a simple sketch for routine spending in the coming year. But like so much in Washington right now, the 89-page document is hardly as straightforward as it seems.

In fact, if Sen. Lindsey Graham is right, the future of Republicans depends on whether the GOP majority in Congress can gets its act together, sign-off on a largely symbolic budget and then use it to deliver on the promise of tax cuts. “If we don’t, we’re dead,” South Carolina Republican told CBS News.

The reason Graham is hardly alone in his diagnosis is that Republicans have been in charge of a one-party town since Jan. 20 and they have very little to show for it. Immigration and infrastructure packages are nowhere to be found. The seven-year pledge to repeal Obamacare turned out to be a dud. That lack of progress has some grassroots conservatives ready to storm the Capitol and demand action.

“Members, having gone through health care and having seen this new world we live in, they understand what the world looks like if they fail again,” said one campaign veteran with deep ties to House Leadership. “That looks like a very unhappy, scary place. In the House, you see a tremendous amount of retirements.”

The House has already passed its version of a budget resolution and is standing by to tack-on tax cuts. Republicans have 52 lawmakers in the Senate, so this should be simple to deal with, right? No. Nothing like this ever is.

Consider the two-step dance the Senate needs to navigate to both pass the budget and tax cuts. Without the former, the latter can’t get started. Under byzantine Senate rules, lawmakers can’t touch taxes, at least not in the ways being promoted, if they can’t muster 50 aye votes, plus Vice President Mike Pence as a tiebreaker, on the budget first.

Sen. Rand Paul of Kentucky is a potential no vote on the budget plan because it heaps red ink on the federal balance sheets. Sen. Bob Corker of Tennessee, whom President Trump called “Liddle Bob” last week, isn’t yet sold that this is the right formula. And Sen. Thad Cochran of Mississippi, whose office announced Tuesday he was returning to the Senate after an illness, still has members of the GOP Leadership worried if he’s back for good.

Throw in there Sens. Lisa Murkowski of Alaska and Susan Collins of Maine, and it’s enough to keep colleagues nervous. On the last two, they say they’re leaning yes, but any efforts to insert ideological provisions could prompt them to walk away.

On top of this, there’s no guarantee the House will take up the Senate version without major changes to appease hardline conservatives in the lower chamber. (Many of those demands, it should be noted, run afoul of the law that allows legislators to score wins with a simple majority. Absolutism and the Parliamentarian are heading toward a collision.)

And then, as if the 535 voting members of Congress inside the building weren’t problematic enough, a double-barrel threat from outside the building is aimed at it. President Trump and his aides at the White House are out of patience with Congress. On a second front, the President’s former chief strategist, Steve Bannon, is ready to spend millions to mount primary challengers against the whole lot and send them packing.

“There’s a time and season for everything, and right now it’s a season of war against a GOP Establishment,” Bannon told a conservative summit this weekend. “It’s no longer acceptable to come and pat you on the head and tell you everything is going to be fine just to get those people in office.”

Bannon’s litmus test: Will the new guard vote to oust McConnell as the party’s Senate leader?

How McConnell is fighting back

If McConnell is feeling any emotion about this challenge, it’s annoyance, not fear. The Kentucky Republican, serving his sixth term in the Senate, has long ago given up the knee-jerk reaction. Instead, a shrewd eye at the end goal guides him over sideshow theatrics. When a collection of conservative grassroots leaders — some of whom recently dined with the President — circulated a letter demanding the wholesale resignation of GOP leadership in the Senate, his allies shrugged. “Did they even bother changing the date from the last time these misfit toys sent this letter?” one McConnell ally asks.

McConnell’s war with Bannon dates back years, going to when Breitbart’s founder was still alive and determined to carpet bomb the Republican Party. The site propped up novelty candidates like Delaware’s Christine O’Donnell, who had to explain in an ad that she was not a witch. Among conservatives, the tribal warfare had a town square, and Bannon realized the power of the populism he could harness. When McConnell became the majority leader after the 2014 election, he vowed to exclude the fringe where he could.

For his part, McConnell has warned Trump that Bannon-esque nominees may be incompatible with the middle of each state’s electorate can cost the GOP seats the party cannot afford. “The goal here is to win elections in November,” McConnell said on Oct. 16 at the White House. “Back in 2010 and 2012, we nominated several candidates: Christine O’Donnell, Sharron Angle, Todd Akin, Richard Mourdock.” It was a veritable murderers’ row of candidates who were in races that should have been wins for Republicans, yet were poor fits with unvetted records.

“They’re not in the Senate,” McConnell continued. “And the reason for that was that they were not able to appeal to a broader electorate in the general election.” It was a civics lesson in the President’s literal backyard, one he did not take kindly.

Trump gritted his teeth. “I’m going to see if we (can) talk him out of that,” the President said when asked about Bannon’s broadsides against the GOP. Trump still speaks to Bannon regularly — far more often than McConnell, who single-handedly controls the President’s agenda in the Senate.

The approach has left McConnell quietly stewing about his nominal partner at the other end of Pennsylvania Avenue. It’s not about the slight. It’s that there is no strategic value in it. Although McConnell didn’t much care for Barack Obama, he thought Trump’s Democratic predecessor a rational person who understood the Senate. The men were hardly pals, but they weren’t speaking different languages.

Things with the Senate aren’t much better from the White House’s side, despite the President’s declarations this week that he’s never been closer to McConnell. Both parties are still smarting from an Aug. 9 phone call that devolved into screaming and profanity. Silence between the two men followed for weeks, while aides kept in touch to see if anger had subsided.

Then, White House officials convinced the President that siding with McConnell in a GOP primary in Alabama was the right thing. It became an embarrassment that pitted the White House against Bannon. Weeks later, the President is still fuming that Bannon won.

How Ryan sees the fight

In the House, aides to Ryan are equally as exasperated with the Bannon theatrics. In an interview, Ryan all but rolled his eyes at Bannon and Breitbart, which have repeatedly sought to oust the Speaker, too, from his gig. “Death, taxes and attacks from Breitbart,” Ryan deadpanned to MSNBC. “I’m so used to that.”

That doesn’t mean it makes Ryan’s life any easier. Many of Ryan’s members live in fear that Bannon will send cash and candidates to their districts to make a play at their seat from the right. Ryan knows the play well, having weathered an annoying primary last year. Breitbart heralded it as a real threat and launched almost daily attacks on the Speaker. Ryan won with 84% of the primary vote. “I don’t think it’s helpful to go after fellow Republicans,” Ryan says.

Still, the Bannon threats hang large over the entire party. Trump, McConnell and Ryan stand to lose bigly should Bannon prevail. Aides to this unlikely trio understand the stakes. McConnell tried to make sure the President understood them when they met privately on Oct. 16. “You have to nominate people who can actually win, because winners make policy and losers go home,” McConnell told reporters after the session.

Implicit in the message: The President needs to leash his attack dog lest they all wind up at the mercy of a Democratic Senate.

The 2018 map favors the GOP. Trump won many of the states where Democrats are on defense: West Virginia by 42 percentage points, North Dakota by 36 points and Indiana by 19 points. But the party could lose the majority in the Senate if Bannon ushers fringe candidates to the general election in places like Utah, Mississippi and Montana. At a minimum, defending incumbent Republicans could cost the GOP cash it needs elsewhere, such as Senate races in Ohio, Missouri and Indiana.

A Democratic Senate, armed with subpoena power, could revisit every aspect of Trump’s time in office. It would spell a nightmare for Trump’s lawyers, who are already fighting battles with an independent prosecutor, House and Senate Intelligence panels and public opinion polls.

Separately, if Democrats net 24 seats, they can claim the House majority. Bannon could help weaken GOP incumbents in the lower chamber, just as he’s threatening the Senate colleagues.

Republicans are starting to sound the alarm that they may deserve to be vulnerable if they prove incapable of delivering on this opportunity. “If we do nothing,” Sen. Ted Cruz of Texas says, “if tax reform crashes and burns, if (on) Obamacare, nothing happens, we could face a bloodbath. We have the potential to see a Watergate-level blowout.” What he neglects to mention is that he’s the lone Senator up for re-election in 2018 whom Bannon has vowed not to primary.

Major donors are clearly frustrated. Three fundraisers for conservative committees and super PACs say they’re having trouble making the case to moneyed friends that the fight is worth continuing. After all, things are clearly stalled on the legislative side despite years of promises. As one fundraiser put it bluntly: “The donors are pissed.”

These donors are sounding off. At a private session in New York last week, one donor told lawmakers they needed to get serious about the tax goals, and set aside specifics of the budget for a year. “Who wins Congress isn’t going to be decided on a budget,” the donor said. “It will be decided whether taxes go down or stay the same.”

Senior Republicans, while acknowledging McConnell is not loved by the base, say Bannon could tap into much of the same frustration he did when he ran the Trump campaign late last year. That campaign’s message—focused on emotion, not specifics—still has resonance. “The change people wanted wasn’t because they didn’t like Obama’s Syria policy, or, man, I don’t like the Iran deal,” said another McConnell ally. “No, 50% of Americans said they live paycheck-to-paycheck. When they voted for change, they wanted help on that. People don’t care about tax plans that create 9 million jobs. They are concerned about one job: theirs.”

Many GOP consultants are urging clients to hold their nose on the budget so that they can get to the tax cuts. “If we pass a middle-class tax cut, it pops Steve Bannon’s balloon,” said a veteran Republican strategist with the keys to a major super PAC. “If they do a big celebration with the President in the Rose Garden,” the strategist added, “what’s Steve Bannon going to say? ‘Those tax cuts suck?’”

First, though, these lawmakers have to pass a budget in the Senate. Then they need to tack on tax provisions. Then the House and Senate have to hammer out the differences in a conference committee. And then the President has to sign the compromise document. It’s a tall order in the remaining 37 days the Senate meets, and the 28 working days left for the House before lawmakers leave for a December holiday.