The Lessons of the Midterm Elections

When Americans across the country woke up this morning, the midterms picture looked much as it had shortly after the results began flowing in last night. Republicans have lost control of the Senate and the House of Representatives—and lost badly. Nevertheless, the Taxpayers Protection Alliance (TPA) and other pro-limited-government watchdog groups must continue doing the same work we were doing on November 3rd. When the new Congress commences, TPA will continue to work with whoever is in office—both new members and returning incumbents—to advance the causes of low taxation, fiscal responsibility, economic freedom, free markets, and consumer choice. That is, the causes of liberty, good governance, and prosperity.

There is much to consider as the 120th Congress gears up.

First, the electorate’s discomfort with the state of the economy (mostly inflation and affordability) was a major factor in these elections. And the economy is in no small part shaped by the economic policies set in Washington, D.C. Despite some signs of strength, many consumers feel that prices remain too high, and many industries and those employed in them are struggling. The new Congress should make it a high priority to enact low-tax and deregulatory reforms that will benefit businesses and consumers and kickstart the entire American economy.

The chief culprit for the economic struggles, from a policy perspective, is tariffs. President Trump’s unilateral, legally dubious, and often chaotic protectionism has artificially raised consumer prices and business costs alike, dampening economic growth, and suppressing employment. These tariffs were a self-inflicted political wound that alienated voters. Polling has consistently showed that American voters dislike tariffs and blame them for high prices. This reality was made manifest at the ballot box. TPA has long called on Congress to assert its constitutional authority to regulate American trade policy and provide badly needed relief from the White House’s protectionist adventurism—which Democrats have often criticized. Soon the congressional Democrats—which, TPA hopes, will be joined by many Republicans—will have the opportunity to prove their commitment to freeing American trade. It is the right thing to do—politically and economically—and, moreover, it is the constitutional responsibility of Congress to do it.

Last night, Rep. Hakeem Jefferies (D-N.Y.), who likely will be speaker of the House come January, stood before a backdrop emblazoned with the slogan: “Fighting for an Affordable America.” The laws of economics are consistent, and an endless train of subsidies, regulations, and other interventions in the economy will not create a more affordable America. On healthcare, housing, and energy, and in many more sectors, the proven path to improvements is deregulation, and not increased government involvement. Permitting reform, especially, is a measure that will aid many industries, should be a priority. This may not an easy pill for many Democrats to swallow, but these are the facts of life. The American people have reposed a public trust in a new Democrat congressional majority, and that comes with a responsibility to use this trust to enact policies that have a long track record of benefitting taxpayers, consumers, and businesses. This kind of legislative work may not come with the fireworks of political theatrics, but it is the basic business of good governance.

The debt eclipsed $40 trillion in September. This shows that Washington, D.C., has long had a spending problem, and the nation is now careening toward a fiscal crisis—especially given the looming insolvency of such entitlements as Social Security and Medicare. This is not a matter of partisanship but rather of mathematics. To wait for a genuine crisis is to refuse to avoid the avoidable and to worsen the crisis when it comes. Genuine entitlement reform—the only solution—has proven difficult for politicians and both parties. But time is short, each year compounds already-serious debt and deficits, and Congress must act in the best interests of the American people.

Notwithstanding these difficulties, the last two years have seen the enactment of several good policies, most notably the extension of the 2017 Tax Cuts and Jobs Act. Americans dodged a seismic tax increase, meaning that they are far better off than they otherwise would have been. This points the way to an opportunity to build on these extensions and pass further tax reform to leave more money in the wallets of American taxpayers and stimulate economic growth.

A lesson for Republicans: the rising tide of populist economics that has gripped the party in recent years has been given a fair shot, despite the warning of critics. Those policies, such as price controls, have failed—failed because they have not yielded their intended results, which has not gone unnoticed by American taxpayers and consumers. The laws of economics do not bend based on which party holds the levers of power. They are steady, because human action is consistent. Whether it is tinted red or blue, central planning is doomed to fail. A lesson for Democrats: Republicans have adopted policies that traditionally have been advocated by Democrats, and this has provided a case study in the effects of those policies. Democrats should learn from this experience, and rethink some of their own traditional commitments.

A new Congress will soon be upon us. Government in the nation’s capital, for the next two years, will be divided. This will create practical difficulties, as divided government always does, but TPA urges the new Congress to do the utmost to help the voters who have just chosen Senators and members of the House, new and old, to hold office. TPA looks forward to working with all to advance sound policies in the interests of the American people.