Fast-forward from Reagan’s 1986 tax reforms. Despite controlling the White House and having one of the largest congressional majorities in its history, Republicans today are tied up in knots. That’s mostly the result of the Tea Party infusing its brand of hard-right sentiment into the GOP. “It’s an element of the party that sees no good in government,” says Hoagland. “Which makes me wonder why they’re even serving in Congress.” The yellow dogs are extinct, according to Bloomberg.
House Speaker Paul Ryan faces a deeply divided Republican caucus, with ultraconservatives driving a hard bargain and moderates starting to rebel after years of going along with far-right legislation. In a way, a Republican in the White House deepens the dysfunction, since lawmakers no longer have the luxury of voting for bills they know won’t get signed into law.
The divisions forced the GOP into what may be the biggest broken promise in modern political history when it failed to pass its health-care bill. And the animosities aren’t going away. They could vex Ryan’s dream of overhauling the tax code and may even prevent the party from performing basic tasks, such as averting a government shutdown in April or raising the debt limit later this year. That’s not to mention trying to pass the $1 trillion infrastructure bill Donald Trump has promised. “What you’re really seeing with that defeat is the Balkanization of this party,” says Steve Bell, a former longtime Republican budget aide. “We’ve been able to paper it over, but now it’s coming out.”
To fully understand the trouble ahead, it’s helpful to remember the recent evolution of House Republicans. In 2010, when the GOP picked up 63 seats and took back the House, the party shifted to the right, empowering the 150-member Republican Study Committee, which was formed in 1973 and for years stood as the House’s hard-right flank. In 2011, Jim Jordan, an Ohioan and former champion wrestler, gained the chairmanship of the RSC. That summer the committee helped engineer the debt ceiling fight. In 2013 it played a role in forcing the government shutdown.
But by 2015, Jordan and other archconservatives began to see the RSC as too willing to go along with party leaders and broke off to form the House Freedom Caucus, which Jordan described as a more nimble, action-oriented faction. Within a year they forced out Speaker John Boehner and almost shut down the government again, this time over their demand to defund Planned Parenthood.
With about three dozen members, the Freedom Caucus is small, yet it’s big enough to block GOP legislation if its members stick together. And they often do, even at the cost of embarrassing the party and, as in the health-care debate, a Republican president. Caucus members hail mostly from districts that are so Republican that the only political danger they face is from a right-wing challenger. That’s the opposite political dynamic facing their more moderate peers, who worry about Democrats.
The health-care fight became even more of a free-for-all when moderate Republicans stood up for themselves after years of being dragged to the right. The Tuesday Group, a faction of about 50 moderates, many of whom represent competitive districts in swing states, showed a newly rebellious side. Its leader, Representative Charlie Dent of Pennsylvania, came out against Trump’s American Health Care Act before the vote, lamenting that it would “lead to the loss of coverage” for too many lower-income Americans. Even though the Tuesday Group favored past efforts to gut Obamacare, they never had to worry about the consequences. Faced with a live bill, they balked.
A case in point was the battle over Obamacare’s essential health benefits—10 items insurers must provide in their policies. When GOP leaders kept the provision in the original replacement bill, the Freedom Caucus withheld their votes. After GOP leaders agreed to rip them out, moderates walked. “The moderates in our conference and the Freedom Caucus are truly at opposite ends of the issues,” says Representative Chris Collins, a New York Republican. “And so you get one, you lose one, you get one, you lose one.”
In the face of this push-and-pull, Ryan has an almost impossible job of uniting the party. The forces that stymied Boehner remain in place. “This isn’t a matter of Ryan not being capable,” says Bell, the former budget aide. “This is a matter of arithmetic.”
Ryan’s push to pass a tax-reform bill won’t be any easier. The Freedom Caucus is already angling against a key component: revenue neutrality, where any tax cut is offset by equal revenue increases. Without offsets for tax cuts, an overhaul can’t be permanent without Senate Democratic support; it’ll have to be limited to 10 years. The main offset Ryan has proposed, a border adjustment provision to raise taxes for net importers and cut them for exporters, has divided the Right.
While Ryan can afford to lose some 20 Republicans in the House and still pass bills without Democratic support, Senate Majority Leader Mitch McConnell has 52 GOP votes, and most bills require 60 votes. Funding bills and debt limit increases, both of which require 60, are likely to get caught in the crossfire.
With the government set to run out of funding on April 28, conservatives in the House, spoiling for a win, want to use both issues to push for steep cuts to programs for the middle class and poor, which won’t sit well with the Tuesday Group. The Freedom Caucus also wants to defund Planned Parenthood, which Democrats won’t support.
Altogether, it’s enough to make Republicans wonder if they’re even capable of governing anymore. Hoagland, the former GOP aide, sees only one way out for Ryan: work with Democrats. “It may be difficult for the speaker,” he says, “but it also is the way legislation used to be done around here.”
The bottom line: Divisions inside the GOP that scuttled its health-care reform could keep it from preventing a government shutdown.