As Republicans rethink fiscal policies, a potential new model for the party emerges

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Sahil Kapur and Allan Smith
·7 min read
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WASHINGTON — The Republican Party is showing signs of softening its trademark fiscal conservative brand in favor of a new populist approach, a potentially seminal shift as the party becomes more reliant on blue-collar white voters after Donald Trump's presidency.

The last time Republicans were thrown out of power, in 2009, they embraced an unabashed tax-cutting and spending-cutting vision to find their way out of the wilderness. Now, the party is taking a different path as ambitious figures seek to curry favor with voters by pushing a larger government safety net that includes cash for families and a minimum wage increase.

The new approach comes at a time of deep economic hardship — rising income inequality and escalating costs of health care and college tuition — made worse by the coronavirus pandemic. The trend, if it continues, will test the long-standing alliance between the GOP and big business, and it has the potential to reshape the future of American policymaking.

"I hope there's support for getting working people a fair shot. Most Americans — they don't want to be taken care of. They would like a fair shot, though — to be able to get a job, be able to raise their family," said Sen. Josh Hawley, R-Mo.

Hawley's rhetoric echoes that of progressives who say the government has a larger role in providing equal economic opportunity. He has been a vocal supporter of direct cash payments to Americans, even teaming up with Sen. Bernie Sanders, I-Vt., a democratic socialist, recently.

Image: Josh Hawley (Patrick Semansky / Bloomberg via Getty Images file)
Image: Josh Hawley (Patrick Semansky / Bloomberg via Getty Images file)

But despite his interest in fiscal liberalism, Hawley breaks sharply from Democrats by embracing Trump's cultural conservatism, his skepticism of immigration and even his promoting of conspiracy theories about the 2020 election — a potential new model for the party.

"Republicans need to have a broader conversation about what we're going to do to support working people, working families in the middle of the country, where I'm from, but all across the country," Hawley said. "So I hope that that's the direction that we're headed."

'It's time'

The party-line vote Saturday to approve a $1.9 trillion Covid-19 relief bill shows that economic differences between the parties remain. Yet 48 Republicans voted to spend $650 billion on measures like direct cash, jobless aid and child care.

Perhaps no Republican embodies the change quite like Sen. Mitt Romney of Utah.

Romney ran for president in 2012 on a platform of slashing taxes, raising the Social Security retirement age and cutting Medicare spending. He picked as his running mate Paul Ryan, the vanguard of traditional fiscal conservatism.

Now, Romney is leading efforts in his party to expand the safety net with a substantial child allowance and a minimum wage hike to $10 an hour, which would be tied to stricter enforcement of immigration laws. And he was an early proponent of direct payments during the pandemic.

"With regards to each of those plans, the effort is to make our safety net more effective," Romney said, while emphasizing that his plans would be paid for.

In some ways, Romney is Trump's polar opposite and chief antagonist — the only Republican who voted twice to find him guilty on impeachment charges. But Trump's pro-spending and anti-immigration attitudes created space for the policies Romney is pushing.

Case in point: His minimum wage proposal is co-sponsored by Sen. Tom Cotton, R-Ark., one of the Senate's most conservative members, who is considered a likely presidential candidate.

"It's time for the minimum wage to be raised. It hasn't been raised in a long, long, long time," Romney said. "But do so gradually and consistent with the rate of inflation — and marry that with immigration enforcement to make sure that we don't have people coming in illegally, taking away jobs from those at the entry level."

While Romney is hardly a favorite among conservative grassroots activists because of his extensive criticism of Trump, some were enthusiastic about by the proposals, particularly his child care plan, which would provide households up to $4,200 annually per child while cutting some entitlement programs.

The idea of using federal power to promote the nuclear family is at the center of the change in GOP policymaking, and a number of other lawmakers, like Hawley and Sen. Marco Rubio of Florida, are seeking to lead in the area.

"I think Romney's proposals are interesting," said Don Thrasher, chairman of the Nelson County, Kentucky, Republican Party. "I think [Republican policy] needs to be addressing the inequity of what is going to corporate America versus what is going to Main Street America. And I think part of what Romney's saying does that."

Republican strategist Andy Surabian said some in the GOP are shifting away from its fiscal orthodoxy.

"There's a lot more openness from the base to policy proposals that are more populist in nature and are less concerned with kind of orthodox, libertarian, conservative economics in some ways," he said. "But I also think it's super easy to overstate the extent to which that's true."

He added, however, that it is wrong to assume that conservative activists no longer care about spending and debt or "that they're all of a sudden for a bunch of liberal economics," like a national $15 minimum wage.

'Deficit hawkishness'

Notably, Republicans are talking less about the national debt and are instead attacking the Democrats' Covid-19 bill as a "liberal wish list." And the tea party activists who took politics by storm in 2009 with complaints about government spending are nowhere to be found. A recent Economist/YouGov poll showed that the bill is supported by 66 percent of Americans, with just 25 percent opposed. It has support with nearly 4 in 10 Republicans and 30 percent of Trump voters.

A Nebraska Republican, who asked to speak anonymously to provide a frank assessment of Republican messaging, said that because of the pandemic and the unprecedented government relief, "a lot of the base" is more comfortable with accepting "a larger economic role for the government" — so long as "it actually serves to benefit the American citizen."

"I think the days of a party exclusively dedicated to deficit hawkishness are waning," the person said. "I think you'll see a much larger body of freshmen in 2022 move toward the middle on that issue."

Image: Sen. Tom Cotton (Andrew Harnik / Pool via AFP - Getty Images)
Image: Sen. Tom Cotton (Andrew Harnik / Pool via AFP - Getty Images)

Some Democrats say the shift shows that their Republican counterparts are searching for an identity after four years of Trump and then his re-election defeat.

"The Republican Party's a snow globe right now," said Rep. Mark Pocan, D-Wis. "They don't know if they're QAnon, if they're tea party, if they're fiscal conservatives, if they're a religious right party — they don't know. And during that time, you're going to see lots of s--- falling from the sky."

Sen. Ed Markey, D-Mass., said the decline of fiscal conservatism is good for the country.

"If that legacy of the Trump era is maintained inside the Republican Party, it means that there'll be a lot more room for negotiation with Democrats, because they won't be any longer wedded to root canal-like budget policy that is focused on inflicting more pain," he said.

However, some Republicans say Trump's vision on spending attracted more voters to the party — mainly disaffected Democrats.

Trump "brought a lot of people into the party that were traditional Democrats," said Sen. Richard Shelby of Alabama, a former Democrat who switched parties in 1994. "Just hope we keep bringing more in."

Trump infused the party with a mix of economic populism and nativism that many Republicans initially resisted. Now, even after his defeat, it continues to influence the party.

"Probably one of Trump's biggest changes was to have a more populist approach, particularly to helping people," Sen. Lindsey Graham, R-S.C., a former Trump critic-turned-fierce ally, said in an interview. "I think that's good."

Sahil Kapur reported from Washington. Allan Smith reported from New York.