The reconciliation bill is Republicans doing what they do best

Politics, you will notice, has gotten extremely weird. To some degree, of course, this is Donald Trump’s fault. No other president has seen the first part of their term defined by a fight over whether the federal government can send people living in the US to a prison in El Salvador with no due process. No other modern president has decided to ignore decades of settled economic and political wisdom and institute the biggest tariffs since the Hoover administration. No other president has waged war against the entire foundation of American science. Some weirdness is also the fault of Covid. The pandemic introduced a slew of policies that proved divisive, from mask mandates to vaccine mandates to funding for “gain of function” research to school closures. None of these were polarizing topics in 2019 because they either had never happened before or were too obscure for most people to care. And though we’re a few years past the worst days of the pandemic, the appointment of anti-vaxxer Robert F. Kennedy Jr. as health and human services secretary shows just how central many of these topics remain. It’s this context that has made Congress’s debate over a multitrillion-dollar reconciliation bill, passed by the House of Representatives in the early morning hours of Thursday, May 22, so fascinating. The bill’s ultimate contents are still evolving, and the Republican-led Senate will have to weigh in, but the broad outlines are simple: trillions in tax cuts, tilted to the wealthy; hundreds of billions in spending cuts, particularly to programs for the poor like Medicaid and food stamps; over a hundred billion dollars in increased spending for defense. I know of no better summary of its effects than the above chart from the Urban Institute, which shows that it would make poor Americans earning less than $10,000 dramatically worse off (reducing their income by 14.9 percent) while affluent households earning over $200,000 would thrive. So, all in all, a terrible bill. But whatever else that proposal is, it’s startlingly normal for Republican politics. It represents ideas that have defined the Republican party and its economic and budgetary priorities since 1980, and which the party has strongly held to even in the face of Trump’s total takeover. The Republican Party stands for lower taxes, especially on the rich; lower spending on programs for the poor; and big spending on defense. That’s what Ronald Reagan, Newt Gingrich, Paul Ryan, and other figures who defined the party have all stood for, for nearly half a century now. The extreme weirdness of national politics has led to a temptation to see a new Republican Party just over the horizon, defined by rejecting its tax-cutting and program-slashing tradition. This is stoked by strategic leaks that Trump might be open to a higher tax rate on the richest Americans; by Sen. Josh Hawley (R-MO) condemning Medicaid cuts; by party figures like Vice President JD Vance suggesting a break from the party’s hawkish foreign policy. But the composition of the reconciliation bill suggests that when it comes to bread-and-butter economic issues, this is mostly a mirage. The essential Republican message may become blurred around the edges, the way that George W. Bush messed with it by expanding Medicare or his father did by accepting a small tax hike. But the deviations are swamped by the continuity. It’s not, in the ludicrous phrasing of Steve Bannon, a “workers’ party.” Congressional Republicans, led by Speaker Mike Johnson, have brought back normal politics, and for them that means one thing: redistributing income upward. The rise and persistence of Normal Republicanism This essential pattern of Republicans standing for across-the-board tax cuts and cuts to safety net programs has not always been the norm. Nothing in politics is truly permanent. As late as Richard Nixon, Republican presidents would propose ideas like a guaranteed minimum income and universal health coverage while actually raising taxes on the rich. The ground shifted in the late 1970s and early 1980s, when a small group of policy entrepreneurs in Washington centered on Congress member Jack Kemp (R-NY) began promoting across-the-board cuts to individual income tax rates as a solution to stagflation (the combination of slow growth and high inflation then characterizing the economy). In her history of this moment, Starving the Beast, sociologist Monica Prasad notes that major business lobbies at the time opposed this move. Their priority was corporate rate cuts and a balanced budget, and they saw individual cuts as a threat to both. Kemp and his allies, including soon-to-be-President Reagan, overcame corporate skepticism for one simple reason: The cuts were popular, and the public mood was becoming strongly anti-tax. At this point in time, the thresholds for tax rates were not indexed for inflation, which meant that more and more middle-class people were being pushed into higher and higher tax brackets every year without actually becoming richer as inflation worsened. These pressures had forced even Democrat Jimmy Carter to sign tax cuts in 1978, and they only built as inflation rose still further. --- Timeline of major Republican tax bills Tax Reform Act of 1969 — signed by Richard Nixon, cracked down on foundations, extended a temporary across-the-board income tax hike to fund the war in Vietnam, and created the Alternative Minimum Tax, meant to target high-earners claiming many deductions and credits. On net, substantially raised taxes on the rich while cutting them for the poor. Economic Recovery Tax Act of 1981 — signed by Ronald Reagan, across-the-board cut in tax rates for individuals, with top rate falling from 70 percent to 50 percent. Tax thresholds now indexed for inflation. Businesses allowed to deduct expenses at an accelerated pace. Tax Equity and Fiscal Responsibility Act of 1982 — also signed by Reagan, undid most of the 1981 cuts to corporate taxes, but crucially kept the cuts on individuals in place. Tax Reform Act of 1986 — bipartisan legislation signed by Reagan that eliminated many deductions and credits and simplified the individual income tax to only two brackets (15 percent and 28 percent). Omnibus Budget Reconciliation Act of 1990 — signed by George H.W. Bush, added a 31 percent bracket on the rich to raise revenue on top of the 1986 law. Bill Clinton would add 36 percent and 39.6 percent rates in 1993. Taxpayer Relief Act of 1997 — signed by Bill Clinton but championed by Republicans in Congress, created a $500 child tax credit and cut the capital gains rate from 28 percent to 20 percent. Economic Growth and Tax Relief Reconciliation Act of 2001 — signed by George W. Bush, slashed individual rates across the board, with the top rate falling from 39.6 percent to 35 percent, and gradually eliminated the estate tax. Initially set to expire in 2010. Extended temporarily by Barack Obama in 2010 as part of an economic stimulus deal, and then in 2012 permanently, but only for couples earning under $450,000. Jobs and Growth Tax Relief Reconciliation Act of 2003 — signed by George W. Bush, cut taxes on dividend and interest income, and limited the Alternative Minimum Tax’s effects. Set to expire in 2010, like the 2001 cuts; largely expired under the 2012 Obama deal. Tax Cuts and Jobs Act of 2017 — signed by Donald Trump, cut individual rates with the top rate falling from 39.6 percent to 37 percent; doubled the standard deduction and consolidated personal and dependent exemptions into a larger child tax credit; dramatically cut the corporate tax rate from 35 percent to 21 percent. While some cuts, like the corporate rate cut, were permanent, most of the bill is set to expire at the end of 2025. --- At the same time, Reagan and his team in the early 1980s were convinced that the US needed a major military buildout to counteract what they claimed had been a Soviet buildout in the 1970s. That led to a big increase in defense spending, from 6.6 percent of GDP in 1981 to 7.6 percent in 1985; at today’s size of the US economy, an equivalent increase would be about $290 billion more per year. To pay for at least some of this, Reagan’s first reconciliation bill included sweeping cuts to safety net programs, notably including Medicaid, food stamps, and Aid to Families with Dependent Children (AFDC). This, too, fit well with Reagan’s image. He had campaigned hard against establishing Medicare in the 1960s, and denunciations of “welfare queens” had been a prominent theme in his ultimately failed 1976 campaign for the presidency. This wasn’t the most popular part of the Reagan brand (he denounced “welfare queens” while trying to win the Republican primary, not the general), but it reflected both his genuine beliefs and the twin pressures of the tax cuts and defense buildout on the budget. This combination of policies was a profound break from the Nixon/Gerald Ford years, when tax cuts were not seriously considered, the priority with the Soviets was detente and arms control, and safety net programs were largely protected. And, sure enough, some Republicans continued to push back against the new regime. Sen. Bob Dole (R-KS) successfully fought to limit food stamps cuts; congressional Republicans worked with Democrats to expand Medicaid throughout the 1980s over Reagan’s objections; most infamously, George H.W. Bush signed a bill adding a new 31 percent tax bracket for rich Americans in 1990, violating his pledge not to raise taxes. But for the most part, the pattern established by Reagan has persisted ever since, and deviations — like Bush’s tax hike, which contributed to his loss in 1992 — are remembered more as cautionary tales than examples to emulate. Look at the Contract With America, the Republicans’ platform during their successful 1994 bid to retake the House for the first time in over 40 years. It included tax cuts (like introducing a child tax credit and lower capital gains rates) and cuts to welfare and other safety net programs. While Bill Clinton was able to tamp down these demands somewhat, all became law in one form or another. A few years later, George W. Bush began his first term with sweeping across-the-board tax cuts, and his second with a failed effort to slash Social Security spending in favor of individual accounts. In the Obama years, congressional Republicans, led by Paul Ryan, coalesced around plans for yet more across-the-board tax cuts and sweeping cuts to Medicare, Medicaid, and other safety net programs. Under Trump, Ryan was able to pass the former, though his attempts at the latter through Obamacare repeal failed. Occasionally, a Republican politician will gesture at trying to break with this orthodoxy, and is invariably greeted with intrigued attention from the press. With George W. Bush in 2000, it was called “compassionate conservatism.” With Minnesota Gov. Tim Pawlenty in 2005, it was “Sam’s Club Republicanism.” With then-Sen. Marco Rubio and his allies in the press circa 2014, it was “reform conservatism.” These days the preferred term for Sen. Josh Hawley and Vice President JD Vance seems to be “national conservative,” which, like the Sam’s Club and Reformocons before, purports to reject the tax-cutting orthodoxy of past Republicans in favor of a more communitarian vision — very little of which, of course, appears to have made its way into the budget bill. All of this has happened before, and all of this will happen again. A very Normal Republican budget But through each of these much-hyped fads, Normal Republicanism on the budget has survived more or less unchanged. The legacy of compassionate conservatism is a prescription drug benefit in Medicare administered by private insurers; the legacy of reform conservatism is mostly increasing the child tax credit from $1,000 to $2,000 in 2017. These are slight ripples in a pattern that has been remarkably persistent. The 2025 reconciliation package is a perfect illustration of these dynamics. Per a helpful tally by the Committee for a Responsible Federal Budget, the centerpiece of the legislation is the extension and expansion of Trump’s 2017 Tax Cuts and Jobs Act. The cuts here will cost over $4.1 trillion over a decade. Remarkably, some of the cuts aren’t even made permanent, but temporarily extended again, to artificially make the cost look lower than it is; if they’re extended still further, the total cost of the TCJA extensions would be more like $4.8 trillion. While some last-minute tweaks before its passage on Thursday haven’t yet been scored, the overall picture won’t change. [Image: Deficits would surge dramatically due to the reconciliation bill. https://platform.vox.com/wp-content/uploads/sites/2/2025/05/Gq7Ur81WMAA91gV.jpeg?quality=90&strip=all] These are tax cuts overwhelmingly tilted at the top. $1.4 trillion goes to repealing the Alternative Minimum Tax, which exists to prevent high-earners from taking excessive deductions; $2.2 trillion goes to cutting rates, including the top rate, which disproportionately helps the rich. The pass-through deduction, which arbitrarily lets some business owners exclude 20 percent of their profit from taxation, is extended and also expanded to 23 percent for no apparent reason, for a mere $820 billion. The Tax Policy Center has estimated that extending the TCJA increases incomes for the top 1 percent by an average of 3.7 percent, which swamps the 0.6 percent increase that the poorest fifth of Americans would get. On top of this, the House Ways and Means Committee has thrown a potpourri of assorted other tax cuts: through 2028, for instance, tips, overtime income, and car loan interests would be tax-free, and senior citizens would get bigger standard deductions. The spending spree isn’t limited to taxes, either. There’s $144 billion from the Armed Services Committee, focused on shipbuilding ($32 billion) and “air superiority and missile defense” ($30 billion), and $67 billion for border security, including about $50 billion for Trump’s long-promised wall. The gross cost of all these giveaways hits around $5 trillion, before even considering the possibility that giveaways like the tips and overtime tax cuts are made permanent. But the net cost of the package, and impact on the deficit is “only” about $3.3 trillion, per the Committee for a Responsible Federal Budget. What makes up the difference? $698 billion comes from cuts to Medicaid; including other cuts to Affordable Care Act subsidies, the bill will deprive about 10 million people of health insurance. $559 billion comes from undoing most of the Inflation Reduction Act’s credits for clean energy and electric vehicles. $350 billion comes from cuts to education, heavily focused on student loan programs and subsidies meant to make them more affordable for borrowers. $267 billion comes from food stamps, slashing the program by about 30 percent overall. There’s a lot to say about this set of priorities. The Medicaid and food stamp cuts target the most vulnerable Americans and, combined with the tax cuts for the wealthy, amount to extreme upward redistribution. The Inflation Reduction Act cuts will likely substantially increase energy prices for most Americans, while substantially increasing emissions. I know of no serious economist who thinks that many of the most expensive provisions in the bill, like deductibility of overtime income or the pass-through business deduction, are effective ways to boost economic growth. But, at a moment where so many assumptions about politics have been overturned, the plan is not surprising. This is not a radically different Republican Party newly attuned to the interests of the working class. It’s not a party whose tax-cutting passions have been tempered now that their president is imposing new taxes left and right on foreign imports in the form of tariffs (and which will be borne disproportionately by lower-income Americans). It’s not a party reflecting the fact that Medicaid recipients narrowly voted for Trump over Kamala Harris in 2024. It’s just the normal Reagan-Gingrich-Bush-Ryan Republican Party, same as it’s ever been. Why, then, are people so eager to hear that the Republican Party has changed? Part of it might be the simple fact that voters have had trouble accepting that a political party could actually be like this. When Priorities USA, a Democratic super-PAC in the 2012 election, told a focus group that Mitt Romney wanted to slash Medicare while cutting taxes on the rich, “the respondents simply refused to believe any politician would do such a thing,” per reporter Robert Draper. It does sound vaguely ridiculous: It defies common sense that cutting taxes on the wealthy and funding it with spending cuts on programs for poor and working people would ever be a compelling political message, perhaps outside the extreme inflationary environment of the 1970s that birthed Reagan’s presidency. But ridiculous or not, that’s the world we have. The Republican Party’s budgetary views simply have not changed. They want to blow up the deficit with massive tax cuts tilted toward the rich and pay for a fraction of the cost by slashing programs for the poor. It’s really that simple. It may not be exciting or brand new. But it’s normal Republican policymaking, and it’s back with a vengeance. Update, May 22, 10:15 am ET: This story was originally published on May 21 and has been updated to reflect the bill’s passage in the House.

This moment demands more than headlines

The reconciliation bill is Republicans doing what they do best