Common Sense vs the Economy

Lower Interest Rates, Cut Taxes, Curb Regulations

Some detached Democrats might still be asking, how did Donald Trump get elected president? Easy answer, according to Jason L. Riley in the WSJ: Primarily to improve living standards that had deteriorated while Joe Biden was president.

President Trump also has not supported specious issues embraced by Democrats:

• that police officers are a bigger threat than criminals to public safety
• that immigration enforcement is rooted in xenophobia that endangers the country
• that electric-vehicle mandates and fossil-fuel bans work

(Trump maintains that much of the left’s Green agenda would harm economic growth and national security, as it has in Western Europe.)

Aggrandizing his hold:

• The president supported the Supreme Court decision in 2023 that held racial preferences in college admissions unconstitutional.

(According to a Gallup survey taken after the ruling “nearly 70% of the country—including most whites, blacks, Asians and Hispanics” were behind Trump’s thinking.)

Trump & Co. are not the ones claiming

• math is racist
• we need to redefine the difference between males and females.

Mr. Riley notes how much of what Trump has done, as did his predecessor, has been by executive order, which will face reversal. It can be undone when the GOP is no longer in control.

Last week’s passage of the Republican tax and budget bill, however, is the president’s biggest win to date. It was accomplished the old-fashioned way, notes Riley.

Notwithstanding tiny majorities in the House and Senate, the GOP leadership overcame internal disagreements and muscled the measure across the finish line, where it was signed by the president on schedule.

The media has spent a lot of breath repeating the Democrats’ apocalyptic talking points—“People will die.” It is surprising, however, how unpopular the legislation’s welfare provisions are:

A June Kaiser Family Foundation poll, however, found that 68% of all respondents, including 51% of Democrats, support work requirements for Medicaid.

Most voters don’t believe illegal immigrants should qualify for welfare meant to target impoverished Americans, or that healthy young men who refuse to get a job should receive free healthcare for life.

The measure’s tax provisions might be where the real danger lies for the White House and Republicans going forward. Mr. Trump was re-elected mainly because voters wanted a revival of the pre-pandemic economy, which featured low inflation, full employment and rising wages for the working class.

What propelled the pre-pandemic prosperity?

• the 2017 tax cuts
• lower levies on corporate and personal income led to more capital investment, more business expansion and more hiring.

Democrats insist that only the rich benefited but reducing the top marginal rate resulted in the highest earners paying a larger share of taxes.

As Mr. Riley explains, Trump’s Big Beautiful Bill Act was essential, if only to prevent a $4.5 trillion tax increase had the old rates been allowed to expire. Unlikely, however, will it produce the results voters saw in Mr. Trump’s first term.

Rates have been extended and made permanent in some cases, which is good. But rate reductions are what drive economic growth.

The supply-siders were sidelined by other GOP lawmakers, who care less about rising deficits and more about using the tax code to buy off this or that interest group.

What is the no-tax-on-overtime carve-out, for example, if not a play for unionized workers?

Another potential problem?  How will Republicans handle the consequences should Trump’s tariff madness continue?

Businesses don’t know whether their operating costs are headed up or down, and the uncertainty is a drag on risk-taking. Republicans in Congress might be hoping that culture-war issues will save the party next year regardless, but that’s far from certain.

For the moment, Donald Trump is on a roll, but as Jason Riley warns, the President shouldn’t get too confident. If Donald Trump’s Big Beautiful Bill doesn’t deliver, the likelihood is that Democratic criticism will stick.