Ethics & Public Policy Center

Whatever Happened to Trump’s Populist Agenda?

Published in New York Times on November 20, 2017


President Trump accomplished his unlikely rise to the White House powered in large part by an embrace of economic and cultural populism. Yet one year after this victory, the Republican Party still has no idea how to address or incorporate those populist elements into a coherent agenda. Nor, despite their best intentions, do Mr. Trump and his former adviser Steve Bannon.

This populism does not sit easily within the Republican Party’s business conservative wing (think Mitt Romney) or its “liberty” conservatives (think Tea Party) faction. So it’s not too surprising that virtually all of Mr. Trump’s signature populist ideas have been watered down or ignored, or are in limbo. Instead, Republicans push tax plans that overwhelmingly benefit their donor and executive class. It’s as though Jeb Bush or Ted Cruz won after all.

But they didn’t win, and they didn’t win for a reason. Republican voters want something different from anti-government or establishment Republicanism. And the voters who made Mr. Trump president, the millions of largely white men and women without college degrees who voted for Barack Obama before backing Mr. Trump, definitely do not want Romneyism with a human face.

The traditional Republican policy agenda is a political zombie, a relic that once served our nation well but is out of touch with what Americans want today. It doesn’t have to be this way. Mr. Trump and some of his supporters had good ideas for a reformed Republican Party that fuses conservative and populist elements into an alloy stronger than either on its own.

This fusion may now seem like a dream, but it can still walk among us if Republicans will it to be so. They need only look back to the man they purport to revere, Ronald Reagan, to make it happen.

We tend to forget that the Reagan coalition of the same three groups — non-Republican populists, fiscal conservatives and business Republicans — united behind coherent policy change.

On taxes, for example, today’s Republicans could decide that it is as important to lower taxes on families as it is to lower them for the rich or for corporations. That’s what Mr. Reagan did in his landmark 1986 tax reform, as a cursory look at any of his speechespromoting that reform would show. The tax bill could restore personal exemptions and make the child tax credit refundable against payroll taxes, making millions of families winners instead of losers, as they are under the current bill. It could be paid for by raising the income to which the top marginal income tax rate applies and by scaling back the corporate tax rate cut.

Health care could similarly include populist and traditional Republican priorities. Maintaining government support for the working class and for people with pre-existing conditions at close to current levels should be a top goal, and in exchange, fiscal and business conservatives see significant deregulation of the insurance market. This model would imitate the popular prescription drug benefit introduced by President George W. Bush, whose combination of public subsidy with market competition has extended health care to millions of people at a fraction of the estimated cost.

Trade policy provides American consumers with cheap imports but puts a burden on native-born, less-skilled workers. Countries that manipulate their currencies, subsidize industries that compete with American businesses or set up barriers to American imports should be slapped with sanctions, as Mr. Reagan repeatedly did even as he pursued trade expansion. American workers who increasingly compete with very low-paid workers abroad should be given much more extensive transition support if they lose their jobs. A conservative-populist agenda could even include federal wage subsidies, as Senator Marco Rubio has proposed for Puerto Rico’s workers, to maintain decent living standards for America’s growing class of low-wage workers.

American jobs for American citizens also needs to become more than a slogan. The new tax bill should include provisions that give employers credits in addition to the current deduction for employee compensation to legal United States residents. A second provision should provide additional tax credits for wage increases above national averages for workers earning below-average wages.

Entitlement reform, a holy grail for both traditional Republican factions, can also be addressed with populist priorities in mind. Mr. Reagan always supported the principles of Social Security and Medicare; what he objected to was giving federal aid to people who didn’t need it, like those who could provide for themselves in their old age. Business and liberty conservatives who are concerned about runaway entitlement spending should propose reforms that place the fiscal burden on those who can best bear it, like retirees with large 401(k) accounts.

Entitlement reform must also address the perverse policies that keep less-skilled workers trapped in low-growth regions. Medicaid recipients today, for example, are required to reapply for health insurance if they move to another state. Who would risk the family’s health insurance to move for a $10-an-hour job? Medicaid recipients should be able to keep their current state’s plan, at the federal government’s expense, for a few months if they have or are looking for a job in a new state.

Mr. Trump’s attempted populist revolution is so far merely a ruckus, not a revolt. The Washington establishment’s agenda remains unshaken. Whether it remains so depends on whether Republicans and Trump populists realize in time that they must hang together and develop a new conservative-populist economic agenda. If they don’t, they will learn that they will all hang separately.

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