The economic policy implications of a Republican landslide

A disaster for the poor — and more

Donald Trump’s odds of winning the 2024 presidential election have gone up considerably over the past month, and the odds of the GOP winning both houses of Congress, contingent on a Trump win, have always been good. That means we’re now looking at a scenario where the most likely case is a second Trump administration with modest House and Senate majorities. And given the Senate map, it’s at least plausible that Republicans pick up six or more¹ Senate seats in a real GOP landslide.

2024 Senate races, via the Center for Politics at the University of Virginia

So while the Democratic Party drama is clear the most interesting story in politics right now, the most important story is the formulation of a Republican Party legislative agenda.

One of many unfortunate aspects of Trump’s aberrant behavior in and out of office is the odd anchoring effect it creates around the potential downsides of a Trump presidency. The orthodox liberal view is that Trump poses a fundamental threat to American democracy and American democratic institutions, and anyone who commits themselves to a view like “conditional on Trump winning, there will probably be a free and fair presidential election in 2028” has staked out a contrarian, pro-Trump stance. I think that’s too low a bar — I do anticipate a free and fair election in 2028, but something like a 10-15 percent chance of large-scale political violence is still really, really bad. But even beyond that, I just have to say that I’m not someone who voted for Mitt Romney in 2012, even though I had zero concerns about his commitment to the rule of law. I thought his ascension would be a disaster for low-income people, and for all the intra-party ferment on the GOP side, I see zero indication that any of this has changed.

Trump, by committing himself to not cutting Medicare, managed to avoid the biggest political vulnerability of the Romney-Ryan GOP without addressing my biggest substantive concern with conservative economic policy.

Republicans may severely cut Medicaid

If you go back to the old Paul Ryan budget proposals that Democrats slammed for slashing Medicare, they actually proposed larger cuts to Medicaid — you just heard more about Medicare because that was a better attack on Ryan politically.

When Trump won the election, Ryan tried and failed to convince Trump to propose Medicare cuts. But then Trump and Ryan together pivoted to repealing the Affordable Care Act. One of the most important provisions of the ACA was a large expansion in the number of people covered by Medicaid, so any form of ACA repeal would necessarily entail large cuts in Medicaid. But the version that House Republicans passed — with Donald Trump’s enthusiastic support — went beyond reversing ACA expansion to cut Medicaid relative to the pre-Obama baseline. Ryan explained at the time that he’d been “dreaming” of cuts on this scale since he was “drinking out of kegs” in college. And while Trump is a smoother political operator than Ryan, he was with him all the way on policy.

Ryan exited the scene after the 2018 midterms, but his dream of turning Medicaid into a block grant program whose costs won’t keep up with the health needs of the poor and disabled lived on. Trump embraced the idea in his 2019 and 2020 submissions, and more recently, the budget framework put forward by the Republican Study Committee (a House caucus that includes roughly 80 percent of congressional Republicans), calls for a 53 percent cut in Medicaid and ACA exchange spending. The Project 2025 blueprint for Medicaid does not attach specific numbers to its proposal, but it replicates the block grant structure of the Ryan budgets, Trump’s budget submissions, and the RSC framework.

Trying to predict what Congress will do in future sessions is borderline impossible since it’s hard to know exactly what the head count will be. What I think we can see clearly here, though, is that the bulk of backbench House Republicans favor draconian cuts to Medicaid, and that Trump agrees with the idea of Medicaid cuts conceptually, despite having little investment in the specifics. This means realistically, we’re looking at a vote-counting exercise. Narrow GOP majorities in the House and the Senate will deliver relatively modest Medicaid cuts; huge GOP majorities in the House and the Senate will mean much larger Medicaid cuts.

But structurally, Medicaid is bound to be on the chopping block for a fundamental reason: Trump has promised large tax cuts, and he’s also promised to avoid cutting the largest domestic spending program, and also the second-largest domestic spending program. He’s promised to increase spending on the military. That leaves Medicaid as by far the largest potential target for budget cuts to limit the scope of Trump’s deficit increases.

Other programs for the poor are on the chopping block

Another major piece of unfinished business from Republicans’ last Congressional majority is a set of ideas they called “Welfare Reform 2.0,” which was basically an agenda for cutting every anti-poverty program to the bone.

They were going to triple rents for Section 8 housing voucher recipients and cut both food stamps and the meager TANF program. Mitch McConnell basically told House Republican leaders that they should chill out on this stuff and let him focus on gaining Senate seats in the midterms. McConnell got his way and the Senate didn't take any votes on controversial economic ideas in 2018, while his candidates focused on beating red state Dem incumbents, mostly by talking about cultural issues.

A few things have changed since then. One is that the Biden administration quietly made SNAP benefits more generous, a huge win for poor people that also means there’s now more room for cuts here. The other is that the whole macroeconomic situation has changed. McConnell and Trump were often at odds, but they saw eye to eye on the basic “chill out” point here. Whether or not you had a principled objection to hammering the poor, in 2018 there was no real economic reason to do it.

Today, there is.

Interest rates are a lot higher now than they were when Trump took over in 2016. Republicans are still determined to do budget-busting tax cuts. But spiking rates would be bad, so they have a much stronger incentive to find cuts, and cutting spending on the poor is probably more politically viable than cutting spending on the elderly. The other thing is that while I find cutting kids off from their nutrition and rental assistance to be a morally unconscionable means of fighting inflation, I think you have to concede that it “works.” If poor families become unable to afford meat at the grocery store or end up sleeping in their car, that should reduce prices for middle class families.

Project 2025 endorses the old Welfare Reform 2.0 agenda and goes even further in terms of cuts both to SNAP and to the federal school lunch program.

There’s also, of course, tons of stuff in there about work requirements for all these programs. There’s no way that will generate enough additional labor force participation to compensate for lost immigrant labor, but it’s at least an answer they can give to questions about how they’ll address the economic fallout from big immigration cuts.

Fewer legal immigrants

Most talk about Trump and immigration focuses on either “the border” (where crossings are already way down, thanks to stepped-up Mexican enforcement, but who knows what the future will hold?) or Trump’s vague talk of a “mass deportation” program. The latter is the kind of thing that is terrifying to some, thrilling to others, and fundamentally just very hard to assess. No administration has ever tried to do large-scale interior removals on the basis of pure immigration enforcement, and if Trump is smart, he won’t either.

The logistically easy way to do interior enforcement is to deport people who get picked up for something unrelated to immigration. Part of the thermostatic reaction to Trump in his previous term was that a bunch of jurisdictions that used to cooperate with ICE on this stopped cooperating. That’s one of the reasons why there was actually a faster pace of deportations under Obama than Trump. The safe zone, both politically and substantively, for Trump on interior enforcement would be to just focus on returning to Obama-era levels of local law enforcement cooperation. He could try to do that in a substantively efficacious way, which would involve trying to depolarize the issue. But it would, of course, be much more in character for him to pick huge fights about it that help him on a PR level but accomplish relatively little.

That said, Trump at least claims he wants to go much further on interior enforcement with large-scale raids and vast detention camps. The Trump-adjacent economic policy and business community people I’ve talked to assure me that this isn’t going to actually happen because it’s dumb, or if it does happen, it will be on a scale that’s just big enough for the libs to lose their shit over it but not large enough to actually move the needle on the workforce.

I think it’s striking the extent to which the strongest case for Trump is that he’s a huge liar and won’t actually do a lot of the stuff he says he’ll do.

Either way, what I’m really here to talk about is legislation, which has been under-discussed throughout the campaign. The last time he was president, Trump endorsed a bill to cut legal immigration by 50 percent and then somewhat mitigate the economic harm of that proposal by improving the skill profile of the remaining legal immigrants. Obviously that bill didn’t pass. But this is the kind of thing that could be on the table with bigger GOP majorities.

It’s also worth noting that even though that bill, the RAISE Act, would have focused America’s reduced immigration levels more on skilled workers, Trump’s team also made a bunch of executive action efforts to reduce high-skilled immigration. JD Vance, a likely choice for Trump’s vice president, has spoken recently about immigration cuts as his preferred approach to housing affordability, which is kinda dumb all-around, but to the extent it works, it works best if you cut off the skilled legal immigrants who add more to housing demand. All of which is just to say that while a lot of people favor tighter border security, I think a lot of moderately pro-Trump people are underrating the level of sincere anti-immigrant zeal in the mix here and its potential harms.

The missing stakes

Like most people, I was surprised by the results of the 2016 election. And like most Democrats, I was a bit shocked by them. But beyond that, I am haunted by the realization we had in the Vox office on Election Night 2016: After what felt like 18 months of wall-to-wall Trump coverage, we’d actually done relatively few stories about the concrete implications of Trump’s policy agenda.

A million zany things happened during his term in office, but there was also a boring-but-consequential tax cut, and he nearly passed a major rollback of the social safety net.

This time, nobody has been in 2016 mode, where they just don’t take seriously the chance he might win. But it’s still the case that coverage of Trump tends to veer rapidly from “he will plunge the country into fascism” to “whatever — it’s all fine.” The reality is that big electoral sweeps have big policy consequences, and a confluence of circumstances has created a situation in which it’s not hard to imagine a Republican Party landslide. That landslide would be based on idiosyncratic factors related to Joe Biden and to problems with inflation, crime, and illegal immigration that are all largely in the rearview mirror. But the consequences of a big GOP sweep would be sharply inflationary fiscal policy that is mitigated to some extent by punitive cuts to programs for the poor, paired potentially with sharp cuts to legal immigration.

That’s not what I want, and I don’t even think it’s what voters experiencing Trumpstalgia want — they want a return to the policy status quo that existed in 2019. But that policy status quo was a result of John McCain blocking ACA repeal and Democrats capturing the House in the 2018 midterms. Who knows what will happen in 2026, but for at least two years, we are likely looking at a much more empowered Trump who’ll be able to pass many more bills than in 2017.

1. Winning West Virginia, Ohio, and Montana would take only the smallest amount of political good fortune for Republicans. That leaves Nevada, Arizona, Pennsylvania, Michigan, and Wisconsin as races where the fundamentals narrowly favor Democrats but it would hardly be shocking to see a Republican win. Then New Mexico and Minnesota are on the table as plausible stretch goals, plus the GOP has an idiosyncratically strong nominee in Maryland.