WASHINGTON ― Every day since Jan. 11, Republicans have reminded us that House Democratic leader Nancy Pelosi (D-Calif.) said that day that workers have gotten nothing but “crumbs” from the GOP tax bill.
President Donald Trump this week likened the supposed gaffe to Hillary Clinton’s infamous “deplorables” comment from the 2016 campaign.
“She’s a rich woman who lives in a big, beautiful house in California who wants to give all of your money away,” Trump said of Pelosi during a speech in Ohio. “And she talked about crumbs.”
The tax bill slashed the corporate tax rate from 35 to 21 percent, a windfall Democrats said companies would waste on share buybacks instead of more productive investment. After Trump signed the bill into law, Republicans seized on news that dozens of companies announced they would give their workers bonuses specifically because of the law.
Pelosi was not impressed. “In terms of the bonus that corporate america received versus the crumbs that they are giving to workers to kind of put the schmooze on is so pathetic,” she said last month.
Fox News reprised the crumbs comment no fewer than 43 times this week alone, according to a search using the media monitoring service TVEyes. And in press releases, floor speeches and interviews, Capitol Hill Republicans have been working to make “crumbs” as famous as Pelosi’s “we have to pass the bill so that you can find out what’s in it” comment from the Obamacare debate in 2010.
The thing is, Pelosi’s crumbs comment is fair and accurate. By Republicans’ tally, more than 250 businesses have doled out some $3 billion worth of bonuses so far. The Joint Committee on Taxation expects the corporate tax cut by itself to lose $101 billion worth of revenue this year alone.
Crumb (n) — a very small amount of something.
The bonuses are also a small amount of money compared to what firms are throwing at their shareholders. Since Trump signed the tax bill into law on Dec. 22, companies have announced $88 billion worth of stock buybacks, according to an analysis by the stock market research firm Birinyi Associates. That’s more than twice the amount of share repurchases firms announced during the same period last year.
An analysis by Americans for Tax Fairness, a group that opposed the tax bill, put the stock buyback total at $100 billion since the Senate passed the bill in early December. Senate Democrats arrived at a similar tally for just this year.
“Even as corporations plough tens of billions of dollars into share buybacks and stock repurchasing programs instead of raising wages or hiring more workers, President Trump and Congressional Republicans are doing their best to portray their $1.5 trillion corporate giveaway as a boost to working Americans,” Senate Minority Leader Chuck Schumer (D-N.Y.) said on the Senate floor this week.
Stock buybacks inflate the value of a company’s shares by reducing the amount of stock available to the public. Cash devoted to repurchasing shares isn’t invested in research or development, and goosing share values lines executives’ pockets, since they are often paid with stock and receive bonuses according to its value.
Before the tax bill became law, the official Republican argument was that workers would benefit from corporate tax cuts in the long run. Companies would use their newfound extra cash for capital investments that would enhance worker productivity and make employees more valuable. That might still happen someday, though Republicans have apparently set the argument aside.
Separate from the issue of bonuses, the tax law will result in slightly larger paychecks for most workers, since firms are withholding less income tax due to the new law’s lower rates.
The Tax Policy Center estimated that American households, on average, would have 2.2 percent more after-tax income this year, though the richest 5 percent would see the biggest benefit.
Congressional Democrats have stopped short of saying the law should be repealed, probably since doing so would mean slightly less take-home pay for most workers.
“If Democrats agree with Leader Pelosi that these benefits to working families are ‘crumbs’ and would like to repeal the tax cuts, we encourage them to say so loudly and clearly so Americans know exactly where they stand,” Chris Bond, a spokesman for House Majority Whip Steve Scalise (R-La.), said in an email. Scalise’s office has been keeping track of corporate bonus announcements.
But Pelosi didn’t say the $1,000 bonuses are crumbs to workers. Republicans are shifting the context of her statement from the grand scheme of a trillion dollar tax cut to the more modest setting of individual workers’ paychecks.
“For the families who are living paycheck-to-paycheck, an increase in take-home-pay and a $1,000 bonus to start out the new year ― these are not crumbs,” House Speaker Paul Ryan said in an emailed statement last month.
And some Republicans are providing an additional fake context, noting that in 2011 Pelosi said people would benefit greatly from an extra $40 per paycheck because of a payroll tax cut that passed Congress on a bipartisan basis. The payroll tax cut was not part of a trillion dollar corporate tax cut.
Republicans are eager for ways to use Pelosi in political campaigns regardless of what she says, since people generally view her unfavorably.
“She’s our secret weapon,” Trump said.