Democrats Learned the Wrong Lesson From 2024
Despite Donald Trump’s promises, America has not been Made Affordable Again. This has created an immense political opportunity for his opponents. But Democratic lawmakers are failing just as badly to articulate an alternative vision. Instead, some of them seem to be trying to out-Trump the president with their own brand of “slopulism”—half-baked policy proposals that sound good only if you don’t think too hard about them, and that would, if enacted, hurt the people they’re supposed to help. Others are simply reheating the leftovers of Joe Biden’s agenda. Few are reckoning with the fundamental problem that led to the party’s defeat in 2024: an inability to prioritize the most important parts of its agenda and make the case that they’re worth paying for.
These shortcomings might not prevent Democrats from riding an anti-Trump backlash to success in the midterms, but they could doom the chances of any future Democratic administration governing successfully.
Senators Cory Booker and Chris Van Hollen recently unveiled bills that would exempt most middle-class households from paying any federal income taxes. Booker’s plan would more than double the standard deduction, to $75,000 per couple, and increase the child tax credit to be even more generous than it was under Biden’s COVID-era expansion. Van Hollen’s would essentially create a parallel income-tax system under which a couple’s first $92,000 of income is exempt. His bill in particular appears to have broad support within the party, rolling out with 18 Senate co-sponsors and a slew of endorsements from major labor unions and activist groups.
[Annie Lowrey: The last Americans really paying taxes]
The political appeal of these ideas is obvious enough. Affordability is everyone’s favorite buzzword right now, and lowering taxes lets voters keep more of their paycheck to spend. Trump’s policies to cut taxes on tips, overtime pay, and Social Security benefits proved so popular that congressional Democrats are fighting to expand them. Why not go even bigger and prove that Democrats are the real party of the middle class by offering even more tax relief than Republicans?
One problem is that these policies are regressive. High-income Americans tend to benefit the most from deductions because they pay steeper tax rates on their income. As a result, a childless couple with $175,000 of income would benefit from Booker’s proposal twice as much as one with a $75,000 income. Under Van Hollen’s, a couple that makes $100,000 would benefit six times as much as a couple that earns $50,000. Such an outcome undermines progressives’ general goal of providing the most support to those most in need, without having the benefit of advancing another component of their agenda. This helps explain why both proposals were immediately panned by experts of all ideological stripes within the Democratic Party.
The bigger problem with these plans is that they are very expensive. Van Hollen’s proposal would cost roughly $1.6 trillion over 10 years. That would be more than triple the spending and tax credits in the Inflation Reduction Act, and yet Van Hollen’s plan is cheap compared with Booker’s, which would cost nearly $7 trillion over the same period. Both senators have promised to cover the cost with taxes on corporations and very rich households. But even if that were to happen, it would jeopardize everything else voters expect from the Democratic Party, such as expanding health-care access and investing in clean energy. There is a mathematical limit on how much additional revenue can be generated from raising taxes on high-income households, and offsetting Booker’s plan would require consuming about half of it. The real-world political limit is much lower. If the entire universe of plausible tax hikes on the top 2 percent is spent cutting taxes for the other 98 percent, no money will be left to pursue other goals.
Democrats can’t dodge this reality forever, especially at a time when the bill for many of the government’s unfunded promises is finally coming due. Major trust funds for both Social Security and Medicare are projected to be depleted before the end of the next president’s first term. Doing nothing to the programs—the preferred approach of many Democrats for the past 40 years—would mean allowing automatic benefit cuts as high as 12 percent for Medicare and 24 percent for Social Security to take effect.
Borrowing money indefinitely to support these programs’ shortfalls isn’t an option: The federal government already spends $1 trillion on interest payments each year, more than it does on Medicare or national defense, a higher share of the economy than at any point in American history. That debt might seem abstract now, but Americans will eventually feel the weight of it through higher inflation and interest rates that drive up the cost of living. If Democrats want a robust government that can last, they’ll have to pay for it.
Some might object that if Trump can get away with ideologically and mathematically nonsensical policy positions, why can’t Democrats? The answer is that Trump and MAGA Republicans aren’t trying to build a functioning government with a more generous welfare state. If their unfunded tax cuts end up starving the government into massive spending reductions, many Republicans would consider that a feature rather than a bug. Democrats, by contrast, need voters to believe that government can deliver on its promises.
Refusing to reckon with this dynamic played a huge role in the Biden administration’s biggest failures. In early 2021, Democrats made the American Rescue Plan Act big enough to fund a wide range of requests from their Senate caucus rather than shooting for the appropriate level of spending needed to support the economy through the coronavirus pandemic. Economists widely agree that this choice made inflation worse throughout Biden’s tenure. Democrats’ subsequent Build Back Better plan was functionally a grab bag of policies favored by left-leaning interest groups and their congressional champions that stretched far beyond the total level of spending with which voters were comfortable. The result was a package far less popular than some of the individual policies contained within it, which ultimately could not pass.
If Democrats learned any lessons from these mistakes, they’re not acting like it. Last month, the New Democrat Coalition—the largest bloc of moderate House Democrats—put forth an “Affordability Agenda” that could best be described as a warmed-over Build Back Better. The plan admirably claims that a high-level goal is to “act in a fiscally-responsible way,” but almost every proposal with an impact on the federal budget would either increase spending or cut taxes. Although the plan is light on details, the price tag could be more than $3 trillion over 10 years if its components cost as much as similar proposals from the Biden era.
[Rogé Karma: Buy, borrow, die]
The math gets even worse on the left wing of the Democratic coalition. Senator Bernie Sanders promised $25 trillion more in new spending than he had a plan to pay for when he ran for president in 2020. Now he proposes making the spending-revenue gap even larger by sending a $3,000 check to every member of every household with an income under $150,000—trotting back out a slopulist and inflationary policy that seemed to yield no political benefit for Democrats when they enacted a similar one five years ago.
Opportunities certainly exist for targeted tax relief to help working-class Americans manage higher costs; indeed, I have proposed several. But a situation in which Republicans cut taxes across the board and Democrats try to follow that up with even bigger tax cuts for 98 percent of the population is a race to the bottom—one that has been gradually accelerating since 2001. This is not a contest that Democrats can win, because the end result would be no money left to fund any of the government programs they care about—and giving money to everyone at the same time would fuel inflation that ultimately cancels out the tax cuts’ benefit.
It would be naive to suggest that Democrats should aggressively campaign on painful tax hikes and spending cuts. But at a minimum, they need to have a coherent vision for what they want government to accomplish and not propose costly policies that are fundamentally incompatible with that vision. Moreover, they must make the argument to voters that progressive objectives are worth paying for. If voters support Democratic programs only when they think someone else is going to foot the bill, then Democrats should accept the fact that those policies aren’t truly popular, and trim their ambitions accordingly. Politicians can’t tell Americans that the government will help solve their problems and that they won’t need to pay any taxes to fund it. That’s not offering a solution, just slop.