Some highlights from the Republican Party’s newly released platform.
By Dwyer Gunn
Reince Priebus opens the Republican National Convention on July 18, 2016, in Cleveland, Ohio. (Photo: Robyn Beck/AFP/Getty Images)
Last night, on day one of the Republican National Convention, the GOP finally released its official party platform, although drafts of the policy initiative have been circulating for weeks. The document contains a few interesting surprises and more than a few nods to the party’s candidate for president — it seems the Democrats aren’t the only ones making compromises to placate an upstart candidate. (Exhibit A in the compromise department: a call for a border wall that covers “the entirety of the southern border and must be sufficient to stop both vehicular and pedestrian traffic.”)
Below are some more highlights from the document, which platform committee chair Mary Fallin describes as a “guiding foundation of conservative principles.”
Republicans have historically been reliably pro free trade, but Donald Trump’s fiery rhetoric on trade during his campaign has clearly left its mark on the party (or, at least, the party’s platform this year). While the document promises to pursue trade agreements with “countries which share our values and commitment to fairness, along with transparency in our commercial and business practices,” it also vows to reject agreements that do not “adequately protect U.S. interests, U.S. sovereignty.” The document also calls for an end to large trade deficits and, echoing Trump’s comments during the campaign, promises a much harder line on trade relations with China with respect to currency manipulation and various other practices.
Economists overwhelmingly agree that trade agreements like North American Free Trade Agreement are actually not responsible for the current woes of American workers. The evidence suggests that only a small number of American jobs were lost due to NAFTA, and estimates imply that the effects of the proposed Trans-Pacific Partnership will be similarly minimal. Companies that outsource their production generally do so because labor is dramatically cheaper in developing countries, and they will likely continue to outsource even in the absence of trade agreements. The normalization of trade relations with China has had a much bigger effect (economists estimate that import competition from China resulted in the loss of over two million American jobs), but it’s far from clear that the harder line that Trump and the GOP are advocating will solve this problem.
Numerous economists have warned of disastrous economic consequences if the United States were to start a trade war with China (by, for example, “implement[ing] countervailing duties,” as the platform suggests), and even imposing a blanket tariff on Chinese imports (which would constitute a violation of international trade laws) likely wouldn’t have much of an effect on U.S. production.
De-Regulating (But Also Regulating) the Financial System
The new GOP platform includes a lengthy section on the regulatory burdens imposed on the financial sector by the Dodd-Frank reform bill of 2010. The document describes the Consumer Financial Protection Bureau as a “rogue agency” that should either be abolished or subjected to Congressional appropriation and argues that Dodd-Frank’s complicated regulatory requirements have crippled community banks (which has, in turn, slowed post-Recession economic growth).
The latter argument has merit. Community banks do, in fact, serve a crucial segment of the market that’s often overlooked by big banks — they provide a disproportionate number of agricultural residential mortgages and small business loans. And the researchers Marshall Lux and Robert Greene have found that, while the market share of community banks was already declining before Dodd-Frank, that slide has accelerated rapidly since the passage of the legislation. Others, meanwhile, argue that community banks are actually quite healthy (but would still benefit from a smaller, less-costly regulatory burden).
Interestingly, the document also states that “no financial institution is too big to fail” and calls for a reinstatement of the Glass-Steagall Act (many blame the 1999 repeal of Glass-Steagall for the financial crisis). The fact that these two positions are in the same document is fascinating (and confusing) since they represent radically different regulatory philosophies. The Glass-Steagall proposal was, according to Slate’s Jordan Weissmann, a last-minute addition and likely represents an attempt to woo disaffected Bernie Sanders supporters.
On Poverty, Inequality, and a Balanced Budget
The platform doesn’t really seek to lay out a comprehensive anti-poverty platform, but instead proposes a number of standard conservative measures meant to spur economic growth: lower, simpler taxes; a less-onerous regulatory environment; a reversal of many of the Obama administration’s recent efforts to enforce stricter workplace standards, state-level Right to Work laws, etc. The document also, somewhat predictably, calls for strengthening the work requirements for Temporary Assistance for Needy Families recipients (which are already pretty rigorous), urges more local control over public-assistance programs, and describes marriage as “the greatest antidote to child poverty” (it is, in fact, a pretty good antidote, but we still don’t know how to effectively encourage it).
Calls for a reduction in the federal debt and for a constitutional balanced budget amendment—both of which would be accomplished by reducing federal spending—would have the biggest implications for poverty and inequality.
“Republican budgets will prioritize thrift over extravagance and put taxpayers first,” the document states. “We support the following test: Is a particular expenditure within the constitutional scope of the federal government? If not, stop it. Has it been effective in the past and is it still absolutely necessary? If not, end it. Is it so important as to justify borrowing, especially foreign borrowing, to fund it? If not, kill it.”
Most economists (including conservative ones) hate the idea of a balanced budget amendment, in no small part because it strips policymakers of one of their most important tools for fighting economic downturns. The federal government’s ability to increase spending during recessions is vitally important. If the government was required to balance the budget during economic slowdowns (as states are, at the moment), it would have to actually cut spending during downturns, a policy with economically disastrous implications.
Furthermore, academic paper after academic paper indicates that government spending on social programs, particularly those targeting young children, often pays for itself many times over in the long run. Politicians concerned about the long-term budget deficit might want to actually consider increasing spending on child nutrition, child health insurance, housing vouchers that allow families with children to move to better neighborhoods, and early childhood education.
The platform sticks to the standard party line on health care — promising to repeal Obamacare immediately, increase competition in the market, promote price transparency, and block grant Medicaid — and also fails to lay out a concrete plan for providing coverage to the millions of Americans who have gained health insurance under the ACA. It also contains a passionate commitment to fighting health-care rationing:
We reject the Democrats’ approach of rationing inherent in Obamacare. We recognize the de facto rationing of healthcare caused by reduced access to doctors who increasingly opt out of participating in Medicare and Medicaid. We will not accept that or any other approach which denies care — or lowers its quality — for America’s elderly.
In 2015, the government spent $938 billion, or 25 percent of the federal budget, on Medicare, Medicaid, the Children’s Health Insurance Program, and ACA subsidies. If the U.S. actually wants to reduce or even just control health-care spending (and, consequently, reduce federal spending and the federal debt), it would have to radically re-consider its model of care, which rewards quantity over quality, and incentivizes unnecessary treatments.
If the GOP has come up with a way to somehow provide effective, affordable health care to everyone in America without denying coverage for unnecessary treatments and tests (otherwise known as rationing care), the party leaders should be shouting their plan from the rooftops—it would probably win them this election.