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Memo to House GOP: Don’t Get BTU’d Again

Published in Morning Consult
January 18, 2017
Trent Duffy

Well, that didn’t take long. House Republicans tried something politically risky, the Democrat-media complex pounced and President-elect Donald Trump put the tweet in the coffin. This was the so-called “controversy” over ethics, which Republicans dropped before the recorded vote the DCCC wished for. Now the president-elect is sharing similar-sounding reservations about a key plank of the House GOP’s tax reform and Obamacare strategies.

 It’s not the best of starts for the House Republican Conference, but in the scheme of things should be an incredibly valuable lesson at a bargain price. Why? Because if Republicans felt inundated with calls and posts decrying the ethics move and abandoned by the next POTUS, they ain’t seen nothing yet. The House ethics process doesn’t directly hit taxpayers, tax policy does.

It’s the lesson that House Democrats didn’t learn in 1993, which led directly to the GOP takeover one year later… don’t get BTU’d. 

As communications director for the Republican Ways and Means Committee in the late 1990s, at the Office of Management and Budget in 2002-2003 and as deputy press secretary for President George W. Bush from 2003-2006, I have some history with this issue. And as one who wants Republicans to succeed both on policy and in politics, here’s some free advice: Be bold but be careful.

The BTU tax tale is well known among grizzled tax veterans, but it bears repeating and placing into current context.

It was 1993, and Democrats had the White House, the Senate and the House. The deficit was out of control, and Treasury Secretary Bob Rubin (of Goldman Sachs, gasp!) won a famously intense internal battle over James Carville that resulted in the Clinton administration’s plan to trim the deficit in hopes of stabilizing bond markets. So, among other things, the administration proposed a BTU tax, which would have raised household heating bills and gasoline prices and was projected to generate about $50 billion over four years. Small potatoes, eh? Now, unlike current tax reform proposals, the Clinton BTU tax was certainly not revenue neutral, nor were there other visible benefits to taxpayers — it was a tax hike pure and simple. And it was unpopular.

What happened next is the point.

House Democrats realized the political peril but forged ahead anyway. In a show of arm-breaking that would make Tom DeLay envious, they passed the legislation and the tax. One freshman Democrat, Rep. Marjorie Margolies Mezvinsky, cast the deciding vote as some Republicans on the floor joked, “Bye, Marjorie.” They were right: She was defeated the next year in the Republican rout of 1994.

While she may have lost her seat anyway, the fact is that she took a vote that she never should have. Senate Democrats witnessed the carnage, didn’t follow suit and rejected the BTU tax before risking their political careers. They saw that there was no apparatus to promote the package and defend them from harsh, well-funded attacks.

Herein lies the lesson: House Republicans should not be whipped into casting politically suicidal votes that the Senate or the president will jettison when the pressure gets intense.

Fast forward to today, where the conventional wisdom among many (not all) lobbyists and cable news “strategists” is that the great white whale of tax reform that’s eluded lawmakers for a generation is now going to whiz through Congress like a resolution honoring Nancy Reagan and John Glenn. Yeah, right.

The Armies of the Potomac are mobilizing. Retailers. Realtors. Homebuilders. Homeowners. Charities. Commercial real estate. The list will grow. Call them special interests or whatever you want, but they are powerful and important actors in our political and economic system, and have every right to represent the Americans who work for them. Sure, they were complimentary of “discussion drafts” and “blueprints” because they knew there was no chance they’d ever see the light of day. But real legislation is different, and they will not go quietly into that good night.

Do House Republicans have a similar force multiplier? Where are their big guns? Where is the coalition of the willing that is as organized, well-funded and committed? The battle has yet to be joined.

Trump has a Howitzer, but how will he use it? He’s shown on the ethics hiccup, entitlements and even some popular Obamacare provisions that he’ll aim it squarely at Republicans if he feels the political price is too high. While he has trumpeted an import tax, will he help Republicans under attack for skyrocketing consumer prices? What will he do if the beloved mortgage interest and charitable deductions are at risk? Only he knows. Not to mention what the Senate may or may not be willing to do.

This war is now being fought with real bullets. These are recorded votes that will impact every American and will have hard consequences in future elections.

So be bold, but be careful, and don’t go it alone. There are 247 good reasons.

Trent Duffy was deputy assistant to the president and deputy press secretary for President George W. Bush and is currently a partner at HDMK, a policy-focused strategic communications and public relations firm in Washington.

Posted in Media Release