The Democratic party is in shambles in the wake of Donald Trump’s stunning victory over Hillary Clinton for president and the Republicans’ success in solidifying its hold on both chambers of Congress. President Obama is leaving office with his party virtually rudderless, and it may be many months before new leadership steps up to the plate and takes the shell-shocked Democrats in a new direction.
Sen. Chuck Schumer of New York, who will become the new Democratic leader in the Senate next year, and House Democratic Leader Nancy Pelosi of California will have little leverage at the outset in shaping legislation. Republicans lost two seats in Tuesday’s historic election but still retain control, 51 to 48, while House Republicans suffered minor losses and still enjoy a 238 to 193 seat advantage over the Democrats.
House Speaker Paul Ryan (R-WI) and Senate Majority Leader Mitch McConnell (R-KY) already are working on a conservative GOP agenda of tax cuts, Obamacare repeal, trade and other issues that were hot topics during the bitter 2016 presidential and congressional campaigns.
“The reality is that the party as a whole has taken a real beating,” said Jim Manley, a Democratic policy consultant in describing the Democrats dilemma. Manley sees little hope for bipartisanship in the early going of a new Trump administration after the two parties emerged from one of the most bitter and nasty campaigns of modern times.
Still, hope springs eternal, and for all their differences, there is still some commonality of interest between prominent Democrats and Trump and the Republicans that might eventually blossom into compromise. Politics makes for strange bedfellows, as the saying goes, even among the most liberal and conservative of politicians. Here are five areas that may be ripe for agreement.
Infrastructure – Clinton and Trump disagreed on most things during the campaign, but they were totally in sync on the need for the government to invest hundreds of billions more in building and repairing highways, bridges, dams, transit systems and other major projects. Trump proposed an eye-popping $1 trillion in new infrastructure investment over the coming decade to add as many as six million jobs to the economy.
Trump’s proposal was double the $500 billion of new infrastructure spending that Clinton advocated over the next five years. The president-elect and his advisers claim that their plan would be “revenue neutral” and would be financed by funds from public-private partnerships and tax credits that would spur private investment.
The day after the election, Pelosi declared that she and other Democrats would be willing to work with Trump and the Republicans on a major infrastructure and transportation package. “As President-elect Trump indicated last night, investing in infrastructure is an important priority of his,” Pelosi said in a statement. “We can work together to quickly pass a robust infrastructure jobs bill.”
Trade – Sen. Bernie Sanders of Vermont, the Democratic socialist who ran for president, acknowledged in a statement after the election that Trump “tapped into the anger of a declining middle class that is sick and tired of establishment economics, establishment politics, and the establishment media."
“To the degree that Mr. Trump is serious about pursuing policies that improve the lives of working families in this country, I and other progressives are prepared to work with him,” Sanders said.
In general, both believe that international trade deals like NAFTA and the proposed Trans-Pacific Partnership (TPP) are bad for American workers because they cost the U.S. steady, well-paying jobs. They have different reasoning, of course. Sanders believes that the system is set up to help businesses drive down their costs, frequently by exploiting the cheapest labor and loosest regulatory environment they can find.
Trump's thinking is vaguer: he thinks trade deals have just been badly negotiated and that his superior deal-making skills can quickly force the country's economic competitors to buckle, which will bring jobs pouring back into the country. Both men, though, have shown a willingness to impose tariffs on countries that, in their view, engage in unfair trade practices.
Paid Family Leave – Inspired by his daughter, Ivanka, as a way of appealing to alienated women, Trump made waves in September by announcing a plan for six weeks of paid maternity leave for new mothers whose employers don’t guarantee paid leave. The time off would be financed through the unemployment insurance system and would be supplemented by tax credits for stay-at-home mothers and other child care credits.
Although Trump’s proposal differed in many ways from that of Clinton’s and other moderate to liberal Democrats – including denying the benefit to fathers – it marked the first time in U.S. history that candidates from both major parties offered paid family leave policies.
Paid family leave proposals have long been a point of contention in Congress. While many Democrats have favored universal paid family leave, congressional Republicans have only reluctantly come around to plans to provide tax credits to employers who provide paid leave to their workers or allow them to accrue time off instead of income for working overtime. With Trump committed to a more ambitious approach, paid family leave might crop up this year as part of a larger tax reform measure.
Carried interest – Few tax loopholes received more attention during the campaign than the one tied to “carried interest,” the astronomical management fees charged by hedge fund managers and venture capitalists that are treated like an investment and taxed at the capital gains rate instead of the much higher rate on ordinary income.
The provision has for decades lined the pockets of billionaire financiers and has been protected on Capitol Hill by Republicans and some Democrats. But on the presidential campaign trail, Clinton and Sanders targeted the glaring loophole for closing. Last August, Trump declared that he was willing to close the carried-interest loophole as part of his plan for a massive tax cut that would primarily benefit the wealthy.
“The hedge fund guys didn’t build this country,” Trump said during an appearance on CBS’s Face the Nation. “These are guys that shift paper around and they get lucky. The hedge fund guys are getting away with murder.”
Trump subsequently criticized Clinton for not pushing sooner to eliminate the costly loophole while she served as a senator from New York and represented Wall Street. If Trump is serious about doing battle with hedge fund operators in rewriting the tax laws in the coming year, he will likely find eager allies among the Democrats, including Sanders and Sen. Elizabeth Warren of Massachusetts.
The Deficit – Budget watchdog groups and the Congressional Budget Office (CBO) for months have been sounding the alarm about the mounting $19.7 trillion national debt and danger signs that the government may be returning to an era of trillion-dollar a year budget deficits as spending on domestic programs, defense and entitlements continue to rise.
Many experts have argued that it will take a comprehensive strategy of spending cuts, higher taxes and major reforms of Social Security, Medicare and other entitlements to slow the growth of the long-term debt. But both Trump and Clinton were unwilling to endorse such an approach, and instead promoted big spending initiatives and, in Trump’s case, a massive tax cut that would add $5.3 trillion to the debt in the coming decade, according to the Committee for a Responsible Federal Budget.
Trump and liberal Democrats obviously have conflicting priorities on most domestic and defense issues, yet they have a convergence of interest when it comes to the deficit. While paying lip service to concerns about runaway spending, both see the virtue in investing hundreds of billions of dollars in new government programs and defense efforts to spur the economy and create more jobs – even if that means continued growth in the debt. And both strongly oppose cuts in Social Security as part of a larger move towards entitlement reform.
Sanders and other liberal Democrats are championing a proposal to expand the amount of monthly Social Security benefits to many struggling Americans, especially surviving spouses and people who left their jobs to care for ailing relatives. While that idea is certain to encounter stiff opposition from conservative lawmakers next year, it might get a sympathetic hearing from Trump.