Since Republicans passed their “Big Beautiful Bill” last month, Democrats have wasted no time launching multiple ad campaigns targeting vulnerable House Republicans who voted for the controversial law. With polling for the reconciliation bill deep in the red, the Democratic leadership is optimistic that it will give them a major boost heading into the midterms. But if Democrats hope to flip the House and build a formidable opposition going forward, they will have to go beyond mere condemnation of the GOP’s flagship legislation and offer a compelling alternative that exposes the sham of right-wing “populism.” 

Democrats don’t exactly have a strong track record on pushing back against Republican tax cuts. Over the last 40 years, all but one Republican president has signed fiscally reckless and highly regressive tax cuts into law. Yet Democrats have generally failed to mount an effective resistance or turn the situation to their advantage. Time and again, they have been stuck playing defense as Republicans have gradually rewritten America’s tax code to favor the wealthy over everyone else. It is practically a tradition in U.S. politics for Republicans to govern under the assumption that “deficits don’t matter,” only to quickly rediscover their unwavering commitment to fiscal responsibility once a Democrat takes back the White House. This strategy, while disastrous for America, has been a political triumph for the GOP. By abandoning any commitment to balanced budgets or “fiscal responsibility” while in power, Republicans have repeatedly boxed Democrats into a corner and left them to clean up their fiscal mess. 

This modern pattern began with the Economic Recovery Tax Act of 1981, which delivered the then-largest cut to personal and corporate taxes in the country’s history, over minimal resistance from Democrats, who controlled the House but were reluctant to oppose tax cuts for the middle class. The ERTA did deliver tax cuts to those in the lower income brackets, but like all future Republican tax laws, it mostly benefited the affluent. In addition to a dramatic reduction in the top marginal rate, the law introduced new ways for wealthy businessmen like Donald Trump to skirt taxes by writing off fictitious paper losses. The following years saw an explosion in tax avoidance encouraged by lax enforcement, leading to a sharp reduction in federal tax revenues by mid-decade. Though a predictable consequence of Reagan’s supply-side policies, the president ultimately used this fiscal disorder to his advantage. As a concession to cracking down on tax avoidance, he secured one the largest rate reductions in history in the Tax Reform Act of 1986, which nearly cut the top rate in half, from 50% to 28%, with support from top Democrats like John Kerry, Al Gore and Joe Biden. 

It would ultimately take a Democrat — Bill Clinton — to put what Republicans preached about “fiscal responsibility” into practice. Clinton modestly reversed some of the Reagan-era tax cuts, increasing the top income tax rate to 39.6% and the corporate tax rate to 35%. These tax hikes and the tech-fueled economic boom significantly boosted government revenue over the rest of the decade. But instead of channeling the new revenue into priorities like education, infrastructure and health care — core promises of his 1992 campaign — Clinton capitulated to Republican pressure on spending and embraced balanced budgets, guided by neoliberal advisers like Robert Rubin and Lawrence Summers. While Democrats reaped little political benefit from the resulting budget surpluses in Clinton’s final three years in office, they further enabled Republicans in their anti-tax crusade. “[W]ith the Democrats now rebranded as the party of balanced budgets,” scholar Melinda Cooper notes, “Republicans could stop worrying about the deficit when it came to their own policy actions.” Sure enough, President George W. Bush seized on the surplus in 2001 to push through another round of major tax cuts skewed towards the rich. 

The Big Beautiful Bill looks set to continue this historical pattern. After four years of hand-wringing over mounting deficits and the looming national bankruptcy, Republicans have once again learned to love the federal debt (or at least ignore it) now that they’re back in power. The reconciliation bill is forecasted to add more than 3 trillion to the federal debt over the next decade, and is even more regressive than the Tax Cuts and Jobs Act when factoring in the spending cuts for Medicaid and the Supplemental Nutrition Assistance Program. According to an analysis from Yale’s Budget Lab, the cuts to these programs will ultimately end up reducing the already scant earnings of the poorest Americans by a few percent. Another analysis of data from Congress’ Joint Committee on Taxation by the Institute on Taxation and Economic Policy determined that the top 1% of earners will receive more than $1 trillion in tax cuts over the next decade, which could have more than offset the $930 billion in cuts to Medicaid. 

It is too early to say what kind of political impact the Big Beautiful Bill will have on next year’s election, but Republicans appear to have their work cut out for them in defending it. Polling shows that a majority of voters oppose the legislation, and the more people learn about the bill the more unpopular it’s likely to become. Unlike the 2017 tax cuts, which actually lowered most Americans’ tax bills, this year’s legislation merely extends the current rates that have been in place for nearly a decade. Most Americans will receive no discernable boost in their finances or take-home pay from the legislation, even when factoring in gimmicky new deductions like “no tax on tips.” Compared to the original cuts, then, the political payoff from extending tax cuts will be more limited. On the flip side, spending reductions for Medicaid and SNAP carry serious political risks, as Americans oppose cutting these programs by a margin of 4-to-1. No longer can Republicans plausibly claim that their tax law delivers broad-based savings to all Americans when gains for the richest come directly at the expense of the poorest. 

For Democrats, the Big Beautiful Bill ought to be a political gift. With so much in the law that offends the populist sensibilities of the average voter, it would take extraordinary political malpractice for Democrats not to capitalize on it. But the recent past shows how the party might squander the opportunity. Democrats have watched for decades as Republicans have transformed America’s tax code from one of the most progressive to one of the most regressive in the developed world. In the decades before Reagan, the wealthiest Americans paid more than 50% of their income in taxes, which was about double the rate paid by the working class; today, working and middle-class earners pay between 25% and 28% of their income in taxes (federal, state and local), which is higher than the average rate paid by a billionaire like Elon Musk. 

To reverse this trend, Democrats will have to go on the offense and start pushing for a populist economic program to uplift working-class people and restore tax rates on the rich to pre-Reagan levels. Unsurprisingly, not all Democrats agree with this approach. At the influential centrist think tank Third Way, for example, analysts recently suggested that Democrats should respond to the reconciliation bill by adopting the “counternarrative” that Trump and Republicans will “bankrupt America by exploding the deficit.” According to these critics, Democrats must relentlessly focus on the “B word” and rebrand themselves as the party of balanced budgets to appeal to voters’ supposed “thirst for fiscal responsibility.” In other words, the party must revert back to the Clintonism of the nineties. 

As noted above, this “moderate” approach yields minimal reward while carrying significant risks for Democrats. It also amounts to a capitulation to the GOP’s strategic nihilism. 

The good news is that most Democratic voters favor economic populism, as do most Independents and even many Republicans. When it comes to questions about inequality and economic justice, there’s a clear unity among the American electorate. Most Americans agree that the rich have too much and the poor too little, that our economy has become rigged in favor of big corporations, and that the billionaire class has too much influence in Washington. Most Americans also support raising taxes on higher-income households, corporations and billionaires, whether in the form of a minimum billionaire tax, a wealth tax or increasing the capital gains rate. It is no wonder the Big Beautiful Bill is so unpopular. More than 6-in-10 Americans correctly believe that it will benefit the wealthy and hurt the poor; less than a quarter think it will benefit “people like me.” This makes it the perfect foil for a Democratic party attempting to rebrand itself as the populist choice. 

For too long, Democrats have fought against the GOP’s phony fiscal conservatism with their own fiscal conservatism. If the party wants to escape the dead-end politics of the past, it must counter the right’s phony populism with the real thing.

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