President Trump recently proposed a $5,000 rebate for every American adult if the Republicans keep control of the House and Senate in the midterm elections. Unfortunately, the proposal legitimates an approach to governance guaranteed to doom conservatives.
The offer could be seen as a bribe to voters, which may or may not constitute illegal bribery. Nonetheless, this is not a good look. Perhaps the President views this like a corporation’s dividend to its shareholders.
Of course, politicians make many promises to voters and donors. Democrats more systematically buy support using government dollars. For example, California operates a “shadow” welfare system for illegal immigrants. Illegals will almost surely vote for the politicians who let them stay in the country and receive government money. And with California’s election system, they may already be voting.
Slavery reparations seem like a massive vote buying scheme. The negligible moral case for compensation for 150-year-old offenses evaporates when proposed by states like California and Massachusetts which did not have slavery. Recipients getting payments over perhaps 20 years will not vote for Republicans who might halt the payments.
President Trump claimed that Washington could afford the rebates because its finances are in great shape. Trump 47 has enacted many beneficial economic policies, including making the 2017 tax cuts permanent, slashing Federal employment by 10 percent, and rolling back Federal climate change rules.
But the national debt recently passed $40 trillion, and the rebates would cost $1.2 trillion. The Trump tariffs cannot cover this amount, and this revenue may be refunded after the Supreme Court ruled the Liberation Day tariffs unconstitutional. Boasting about Washington’s financial health only makes limiting spending more difficult.
The biggest problem with the proposal for proponents of limited government is its implication that government is about giving people free stuff. To be sure, elections have always involved promises of generosity. H.L. Mencken observed how, “Every election is a sort of advance auction sale of stolen goods.”
Two forms of social order exist. One is voluntary interactions, including free enterprise, private organizations, and charity. The second is government leadership and control.
The visions produce different responses to problems. The latter sees government as possessing the ability and obligation to solve society’s problems.
The former looks to businesses to solve the problems or to churches and charities to assist the individuals suffering harm. And occasionally asks government to do things people cannot do themselves. In the private ordering vision, government’s efforts to solve societal problems may do more harm than good.
The Trump midterm rebate proposal suggests that electoral competition involves offering things to the public. Republicans are decided underdogs in this contest. The Democratic Socialists of America want to make everything free.
A winning position for Republicans if elections are about free stuff is extremely narrow. Voters may view Democrats as incapable of effectively delivering things. Or that Democrats’ embrace of open borders would give most of the stuff to immigrants.
Republicans have long offered only slimmed-down versions of Democrats’ programs. This was once chided as the “Dime Store New Deal.” Voters who want the New Deal or Great Society will elect politicians believing in them. The discount versions help cement the programs’ legitimacy.
A significant rebate could, however, help radically shrink government. S.T. Karnick of The Heartland Institute offers this idea. He would include the rebate in legislation rolling discretionary spending back to its pre-Covid 2019 level and then reduce it 2 percent a year until 2040. It would also convert joint Federal-state programs like Medicaid into block grants and slowly reduce Federal funding to shift the programs entirely to the states.
Fiscal conservatives might still consider the $1.2 trillion in rebates unaffordable. Yet the persistence of trillion dollar deficits while Federal debt exceeds GDP demonstrates that spending wins elections. Perhaps a tax rebate to “bribe” voters is what we need to break this political equilibrium.
President Trump continues to offer bold initiatives, some of which, like 50- year mortgages, get quietly dismissed. I doubt the midterm rebates will occur. The proposal’s harm is encouraging a political contest that conservatives will lose to socialists.
Daniel Sutter is Affiliated Senior Scholar at the Mercatus Center and Professor of Economics at the Manuel H. Johnson Center for Political Economy at Troy University.
