Republicans Moving to the Middle

The conventional wisdom in recent years has been that the political parties have been moving to their respective left and right extremes. At least for the Republicans, this is wrong. Republicans have been moving left - to the center - enabling them to steal some formerly Democratic voters.

It's true that Republicans have become more focused on illegal immigration and border security. They used transgender issues in the election, as well as crime. They plan to cut taxes and expand U.S. energy production. This is all standard Republican fare. Superficially, it might be easy to think Republicans have been tacking right - and President Trump's sometimes harsh language could easily reinforce that impression.

But when it comes to tariffs, entitlement spending, debt/deficits, organized labor, antitrust, and even abortion, Republicans are moving left, led by President Trump. In fact, it's difficult to think of a single issue on which the GOP has moved right in the last eight years.

Contrary to Republicans' long-standing opposition to tariffs, President Trump embraces tariffs as a vital tool to fix the loss of manufacturing and the trade deficit. His vow to enact a 10 percent across-the-board tariff and a 60 percent tariff on Chinese imports is more than campaign bluster. He doesn't need congressional approval to make these moves, and he's likely to follow through on his vow. He might begin by announcing tariffs will commence on a date-certain and then use the time to negotiate new trade deals. But he might also let the tariffs take effect and then commence a bilateral negotiation.

In the pre-Trump era, Republicans and big business were mostly joined at the hip. No more. Republicans still tend to be more pro-business than Democrats, but the gap between the parties has been narrowing. Republican suspicion of anything big is part of their embrace of populism. The current Republican majority in the House issued more private sector subpoenas in the last two years and conducted more deposition-like transcribed interviews than any other Congress in history. Expect this trend to continue in the new Congress.

Vice President-Elect J.D. Vance has described himself as a "Khanservative," alluding to Federal Trade Commission Chair Lina Khan. In Vance's words, "I look at Lina Khan as one of the few people in the Biden Administration that I think is doing a pretty good job." She has "been very smart about trying to go after some of these big tech companies that monopolize what we're allowed to say in our own country."

Former Congressman Matt Gaetz, newly tapped to be President Trump's Attorney General, has also applauded Khan's approach to antitrust. He's explained his more business-skeptical view of antitrust by saying, "As the Republican Party becomes more working class, we're less captive to the neolibertarian view that everything big business does to people is OK," as the Republican party "can't be whores for big business and be the voice of the working class at the same time." While Trump himself hasn't been as vocal on these issues, such statements suggest that antitrust enforcement in Trump 2.0 might be more robust than in previous Republican administrations.

Both President Trump and Vice President-Elect Vance have lauded unions. President Trump walked the UAW picket line in September - in sharp contrast to President Reagan firing striking FAA air traffic controllers 43 years earlier. Forty-five percent of voters in a household with a union member voted for President Trump. And the relationship between the U.S. Chamber of Commerce and the Trump Administration was often rocky - and may well be so again.

President Trump has vowed not to cut middle class entitlement programs like Medicare and Social Security. He insisted the Party Platform sing the same tune - a marked departure from Republicans' long-standing interest in reforming and reducing costs for these huge drivers of federal spending.

Debt and deficits have also taken a backseat for the Trump-Vance ticket, and they are rarely mentioned on the hustings. President Trump is reported to have told a House Member who was a fiscal hawk that federal spending would not be a priority for him.

On abortion rights, Trump repudiated the pro-life position he held in his first term that led to the confirmation of Supreme Court Justices who struck down Roe v. Wade. He now affirms that mifepristone, which accounts for as many as 80 percent of abortions, should be legal nationwide, and he opposes state abortion bans like Florida's that restrict abortions after six weeks. For the first time in almost 50 years, the Republican Party fielded a presidential ticket affirming the legality of most abortions.

Taken together, it's not surprising that the Trump-Vance ticket significantly improved its performance among traditionally Democratic voters. Notwithstanding superficial atmospherics, on many prominent issues of concern to voters, the Republican Party has moved away from a more doctrinaire conservatism of decades past. This fundamentally populist realignment is likely to have significant implications for corporations in a second Trump Administration.