- - Tuesday, May 8, 2018


Republicans’ best chance to avoid a political pratfall is an economic windfall. To that, they recently dodged an economic bullet that may give them the time needed to avoid approaching political ones. President Trump and Republicans now have six months for the economy to accelerate, and for them to connect it to the new tax cuts.

This year’s first quarter real GDP grew 2.3 percent. Hardly auspicious, it was still significant. First, it beat expectations; second, it beat last year’s 1.2 percent and 2016’s 0.6 percent increases.

More importantly, because Mr. Trump was inaugurated late last January, his first full economic year began in 2017’s Q2 and ended with 2018’s Q1. The result: 2.9 percent growth. That just missed the 3 percent-plus rate his critics widely dismissed as ludicrously optimistic. In comparison, even dismissing his entire first year in office, when the economy contracted 2.8 percent, President Obama’s remaining seven-year average was just 2.1 percent.

This favorable economic comparison is important because Mr. Trump and Republicans are hoping for another favorable one with Mr. Obama: Their first midterm elections. In 2010, Mr. Obama and Democrats lost 6 Senate seats and 63 House seats, as well as control of that body. The Obama administration never recovered legislatively from that defeat, despite the president’s re-election and retaining the Senate for four more years.

In spite of the left’s obviously strong motivation, there are indications Mr. Trump and Republicans are not facing Mr. Obama’s level of first midterm setback. Real Clear Politics currently prognosticates the Senate split at 48 Republicans to 44 Democrats with eight seats as tossups and the House split at 203 Republicans to 201 Democrats with 31 seats as tossups. A November blowout does not appear in the cards yet.

To stay ahead of Mr. Obama’s first midterm disaster, Mr. Trump and Republicans need to connect their favorable economy to their biggest policy achievement: Last year’s Tax Cut and Jobs Act.

Thus far, the tax cut has not proven widely popular. This is not surprising. It has been in effect only a few months and no taxpayer has yet filed a return under the new law. Further, the new law’s greatest potential was always going to be indirect — through the economy — than direct: Taxpayers’ increased paychecks vs. reduced tax withholdings.

Connecting the TCJA’s reduced taxes to the economy’s increased growth will popularize the legislation, but more importantly to Republicans: Those who passed it. It will allow both the law and themselves to take credit for a good economy.

Such political success starts with the economy’s. Mr. Trump and Republicans need the next two quarters to come in strong, just as last year’s did with 3 percent-plus growth. This would bring them to November’s threshold with their best possible argument for keeping them in Congress.

Simply breaking even with Democrats in the Real Clear Politics’ tossups would leave them with slim majorities. Taking, four of the eight toss-up Senate seats would give Republicans 52 seats in the next Congress — an increase of one from this Congress. Taking 15 of the 31 toss-up House seats would give them 218 — a bare majority, but a majority nonetheless.

No less crucial than what the midterms could yield for the next Congress, is where they could stand Republicans entering 2020’s presidential election. While presidents’ parties usually lose seats in midterms, the winning president’s generally gains them in the presidential election — Mr. Obama gained three Senate and eight House seats in 2012.

Minimizing 2018 losses could help Republicans take greater advantage of a potential 2020 rebound. And two more years like Mr. Trump’s first full economic year could help make that happen.

By 2020, tax cuts will have had a three-year impact on the economy. The connection between a good economy and the tax cuts would be that much greater in voters’ minds. Further, the nonpartisan voters who decide presidential elections are very likely to be influenced by the economy.

Republicans have both a short-term and a long-term opportunity with a successful economy. However, to fully exploit it politically, they need to be seen, not just as stewards of a good economy, but its creators. Doing so requires a strong contrast to Mr. Obama’s economy and connecting it to their tax cut.

Republicans’ potential political benefit is only magnified by the clear partisan divide that existed, and continues to, on the tax cuts. No Democrats supported it then, or now. If Republicans can make the connection between a good economy and good policy — their policy — they could go from dodging bullets to firing a withering volley of their own.

• J.T. Young served in the Treasury Department and the Office of Management and Budget.

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