The Washington PostDemocracy Dies in Darkness

‘It’s the economy, stupid’: GOP prepares to sell tax law as its 2018 survival strategy

President Trump speaks at the H&K Equipment Co. in Coraopolis, Pa., on Jan. 18.
President Trump speaks at the H&K Equipment Co. in Coraopolis, Pa., on Jan. 18. (Keith Srakocic/AP)

Republicans this fall will be hoping that Bill Clinton's campaign was right about at least one thing.

"It's the economy, stupid — did you ever hear that one?" President Trump asked at his rally last week near Pittsburgh, bringing cheers and laughter from the crowd at his appropriation of that famous line from the 1992 presidential campaign.

While the government shutdown has dominated headlines in recent days, Republican strategists are plotting an election-year survival strategy to steer the midterms away from the dangerous terrain of Trump's tweets and Capitol Hill dysfunction — and focus attention on pocketbook issues that could tilt voters in favor of the party in power.

GOP leaders and their allies plan to talk up job growth, highlight the soaring stock market and, most of all, convince voters that the tax-cut legislation that stands as their only major accomplishment is bringing back the good times.

The effort represents an all-hands deployment by top Republican officials and their allies, with extensive travel in the coming months to key districts by Trump, Vice President Pence and Cabinet officials, as well as White House aides Ivanka Trump and Kellyanne Conway, to sell the tax overhaul. And key GOP allies, including political action committees and industry groups, are planning to spend millions on advertising designed to sell the tax measure as a boon for the middle class.

"Answer this question and I will tell you if we keep the House or not. In 10 months, does the middle class think we cut their taxes?" said Corry Bliss, the head of the pro-Republican group American Action Network. "Every member of the Republican Party should be spending all of their time selling the tax plan. Everything else is a waste of time and money."

The plan is necessary largely because Republicans, a year after Trump's inauguration, are carrying the weight of the president's ongoing controversies and sagging approval ratings.

A Post-ABC poll conducted last week found 36 percent approve of Trump's job performance, and registered voters favor Democrats by 12 percentage points in support for Congress, larger than the margin they are expected to need to retake the House.

See full Post-ABC poll results here

The numbers suggest that Republicans have been unable to capi­tal­ize on the nation's strong economy and the public's good feelings. Nearly 6 in 10 Americans say the economy is "good" or "excellent," according to the Post-ABC poll, the highest figure in 17 years. Half say the Obama administration deserves significant credit for the economy, while fewer than 4 in 10 say the Trump administration does.

"One of the things that Republican campaigns are not very good at is selling success. They are very good at attacking the opponent," said pollster David Winston, who advises the party leadership in Congress.

The danger signs are accumulating, most recently with a special state Senate election last week in Wisconsin — a state where the unemployment rate has come down to record low levels.

In a district that Republicans have held for nearly two decades — and that Trump carried by 17 percentage points in 2016 — Democrat Patty Schachtner pulled off a surprise victory.

It was a local race, with low voter turnout, but one that played out against saturation coverage of Trump's comments about immigrants from "shithole" countries, and a looming government shutdown.

"My message has always been be kind," Schachtner told reporters after her 10-point win. "Be considerate."

The Wisconsin result followed the pattern of recent elections in Alabama, Virginia, New York, New Jersey and Pennsylvania that have shown dramatic shifts in turnout that benefit Democrats.

"If we have a great economy, I don't think it is going to be a wave election," said Robin Vos, the speaker of the Wisconsin House, but added, "We have to do a better job reminding people how far we've come and how important it is not to slide back."

Rep. Steve Stivers (R-Ohio), who is chairman of the National Republican Congressional Committee, said he will propose in the coming weeks a new slogan for his caucus, "The Great American Comeback." The focus of the messaging, he said, will be on convincing people that they are doing better than they were two years ago.

"If the answer is independent suburban women don't feel like they are better off, we are going to have real problems," Stivers said.

Trump continues to relish his role as disrupter in chief, but he told lawmakers at a recent retreat at Camp David that he wants to spend 2018 promoting the successes of 2017. In that meeting, lawmakers discussed the struggles of President Obama to get political credit for tax cuts in the 2009 stimulus law and vowed to do more to remind voters of the gains, according to a person familiar with the exchange.

In consumer surveys after the 2009 law, a majority of people said they were not aware of getting more money in their paychecks, months after the Internal Revenue Service adjusted paychecks. A similar adjustment — about $35 more every two weeks for a single person making $50,000, according to one estimate — is planned over the coming months to respond to the new tax law.

The Post-ABC poll found that the Republicans' tax law remains unpopular with the public overall, with 34 percent saying its passage was a "good thing" while 46 percent called it a "bad thing." But one-fifth of the public lacks a clear positive or negative feeling about the law, a sign that opinions are still malleable.

The public White House effort to sell the tax plan kicked off last week with Trump's visit to suburban Pittsburgh, the site of a March 13 special congressional election. The president brought a project foreman at an industrial equipment company up on stage to describe his expected tax cut like a sweepstakes victory. "Ken, you just got a $2,200 raise," Trump declared to applause.

GOP-aligned groups that spent millions to pass the tax bill last year will also keep up their efforts. The American Action Network, financed by wealthy Republican donors and corporate trade groups, has budgeted $10 million for ads in the first quarter of this year after spending $24 million on tax-cut messaging in the last five months of 2017. The group also plans to return to hosting a weekly closed-door meeting of aides from the White House and Capitol Hill with outside groups to coordinate the larger effort.

A second group, 45Committee, which is funded by Las Vegas casino magnate Sheldon Adelson and the family of Chicago Cubs owner Joe Ricketts, among others, has already committed more than $1.5 million on ads this year promoting the tax cuts in key districts. Americans for Prosperity (AFP), which is backed by the donor network of billionaire industrialists Charles and David Koch, expects to spend more than $1 million on events and ads throughout the country.

"The American people distrust politics in general," said Tim Phillips, the president of AFP. "So the best way to show them that Washington, D.C., did something good is to show them specifically how it improves their paycheck, how wages are going up, how companies are hiring."

The U.S. Chamber of Commerce, whose members benefited by a significant reduction in the corporate tax, is also organizing an election-year effort. "The idea is to take the success of economic growth and tax reform legislation and translate it to how it is impacting employees at home," said Scott Reed, a political strategist for the U.S. Chamber. "We are really going to turn on the employer-to-employee switch this cycle."

The Chamber is urging member companies to communicate directly with employees about the reason for the coming changes in paycheck tax withholdings. "We're upbeat," said Reed, who said the Chamber plans to spend more this cycle than the $42 million it spent on the 2016 congressional elections. "There are a lot of bed-wetters around town. We're not among them."

Steven Law, who heads the major GOP super PAC Senate Leadership Fund, said of the new tax law: "Over time, this is going to end up being a good issue for us, because it will connect the positive economic conditions that people are experiencing with concrete Republican policies."

Democrats and their liberal allies have mounted their own disciplined effort to frame the tax bill as a giveaway to the wealthy and well-connected. In the past two weeks, the group Not One Penny, which plans to spend at least $5 million this year to attack the tax law, released spots in Iowa and Maine targeting vulnerable House Republicans. Those ads argued that the measure will ultimately raise taxes on the majority of Americans and reward companies that outsource jobs.

Democratic members of Congress have launched their own effort with liberal groups to alarm voters about the impact of the bill. On the weekend of Jan. 15, more than a dozen members of Congress staged tax teach-ins, at which members were urged to refer to the recent law as a "tax scam."

"Voters have a clear sense that the tax bill that passed the Congress does way too little for average Americans and does way too much for the wealthy and large corporations," said Geoff Garin, a Democratic pollster working on the midterm elections. "Even if voters recognize that they are getting something back out of the tax bill, it won't mitigate the negative perception they have."

The new Post-ABC poll found that 6 in 10 adults think the tax bill favors the rich rather than the middle class or poor, nearly identical to opinions before it was passed.

Predicting the exact effects of the tax law on an individual voter is complex, depending on income, number of dependent children and deductions taken by individual households. The Tax Policy Center, a nonpartisan think tank, says that 80 percent of households will get a tax cut in 2018, with an average reduction of $1,600, while 5 percent face a tax increase and the rest would see no change.

Those with higher incomes tend to save more, with those in the top 1 percent of households enjoying an average tax cut of about $50,000. Many of the benefits are set to expire after 2025, leading to more than half of voters seeing potential tax increases in 2027 if Congress does not act to extend the cuts.

One challenge for Republicans is that most voters won't know the full personal effects of their taxes until next year, when they sit down to do their 2018 taxes. "It will be a year or more before we have data on metrics that can be used to parse out the effects of the tax cuts," said Rachel Greszler, a research fellow at the conservative Heritage Foundation.

But in the meantime, there are other economic indicators that Republicans plan to highlight. Consumer confidence is near record highs, the stock market has continued a remarkable bull run that began in 2009 and the unemployment rate has consistently fallen over the past year.

"There was a concerted effort by the left to say this was a giveaway to the rich," said Stivers, of the tax law. "I would rather be us than them because the truth is on our side. People will actually feel the impact of this tax cut in their family and in their paycheck and in their 401(k)."

Josh Dawsey and Scott Clement contributed to this report.