Susan J. Demas: Trump Taxes and Tariffs Squeeze Michigan GOP in 2018

If President Obama had socked Michigan with a one-two punch of higher taxes and steel tariffs, Republicans would be licking their chops about 2018.

The GOP playbook of running against a tax-’n’-spend liberal president who just knifed the domestic auto industry practically writes itself.

But it’s actually a Republican president — the first to win Michigan in three decades — who’s pushed this rather bizarre economic agenda.

Last week, President Trump angrily announced tariffs on steel and aluminum, shocking many conservatives and ultimately leading to the resignation of economic adviser Gary Cohn.

We’ve seen this movie before. When President George W. Bush tried steel tariffs in 2002, every state lost jobs. That confirmed for most fiscal conservatives that protectionism, even in small doses, is a bust. As the home of GM and Ford, Michigan was one of the hardest hit, shedding almost 10,000 jobs.

The leading GOP candidates for governor are both running hard on the economy. Lt. Gov. Brian Calley is selling himself as the right person to continue the “Michigan’s comeback” since the Great Recession. And Attorney General Bill Schuette is pitching a “Paycheck Agenda.”

Trump’s tariffs could sour both their plans, but so far, Schuette and Calley have been awfully quiet about this.

The auto industry is far from the only one that will be affected. Aluminum tariffs will squeeze beer and soft drink makers, particularly smaller craft brewers, many of which make their home in Michigan.

If you think this isn’t going to be a big deal here, consider the fact that Michigan’s beer tax hasn’t been raised in more than 50 years. And any time a politician proposes doing so, the idea dies within days, if not hours.

While soda taxes have gained some currency in cities as a way to combat obesity, good luck making that case in Michigan. Last year, Gov. Rick Snyder signed a law banning local governments from taxing pop (even though Republicans supposedly love local control, at least when it’s ideologically convenient).

Naturally, other countries quickly vowed to retaliate against the United States. The European Union wants to raise tariffs on bourbon, which basically means anything you try to drown your financial sorrows in will end up costing you more now.

But no worries. Trump tweeted that “trade wars are good, and easy to win,” demonstrating, once again, his grade-school-level grasp of economic policy.

At least when Bush started his ill-conceived trade war, it was after he signed a tax law giving almost every American a tax rebate.

Trump has taken a different tack. The 2017 tax law does achieve the Republican Party’s greatest priority, slashing taxes for the rich and big corporations. But its tax relief for middle-class and lower-income families is modest at best. The law also eliminates some big deductions so many will actually owe more to the IRS.

One of those deductions is the personal exemption, which is $4,000 in Michigan. That amounts to a pretty hefty tax increase, so the Michigan Legislature and Gov. Rick Snyder scrambled to restore and increase it over time, so the GOP could run on a tax cut.  

Republicans were careful not to criticize the president or GOP-controlled Congress, just as they would have done if Democrats were in charge (snort).

I mean, Schuette is still running against Jennifer Granholm as the Ghost of Tax Hikes Past, even though she hasn’t been in charge since 2010 and had GOP help in passing the ‘07 income tax increase.

And because Schuette keeps pushing this misleading narrative, I’m going to keep pointing out that Republicans have been in complete control of Michigan’s government for more than seven years. Instead of killing the income tax, they enacted in 2011 a $1.4 billion tax hike on individuals to help pay for an almost $2 billion corporate tax cut.

Between taxes and tariffs, Trump hasn’t done the GOP any favors in the 2018 election in Michigan.

But if worse comes to worse, they can always go back to the tried-and-true tactic of blaming Obama. And remember, anyone who points out actual facts to the contrary is just peddling “fake news.”

Susan J. Demas is Publisher and Editor of Inside Michigan Politics, a nationally acclaimed, biweekly political newsletter. Her political columns can be found at SusanJDemas.com. Follow her on Twitter here.

Susan J. Demas: Trump, Snyder Could Drag Down GOP in 2018

Michigan Republicans are facing some ugly political winds in 2018.

Recent polling shows that Gov. Rick Snyder’s numbers remain dismal — and only look good in comparison to those of President Donald Trump.

In fact, EPIC-MRA found in its Aug. 27-Sept. 1 poll that 53 percent of likely ‘18 voters worry about Trump having access to the nuclear launch codes and 43 percent believe he’s a “mentally unstable person.”

And NBC/Marist had in its Aug. 13-17 survey that 62 percent said the new president “embarrassed” them and 59 percent said Trump’s decisions have “weakened the global image of the United States.”

Those are some jaw-dropping numbers for the GOP to contend with in ‘18, especially as every election cycle since 2006 has been dominated by national, top-of-the-ticket concerns.

We’re still more than a year away from the election. As we saw in 2016, the political landscape can change dramatically and conventional wisdom can be proved a farce. And Republicans have some key advantages in Michigan: a deep bench, generally good economy, favorable legislative maps for down-ballot races, and strong fundraising, aided by ever-laxer campaign finance laws.

Still, the fundamental question for any political party before an election is: Would you rather be us or them?

Right now, Democrats have some big positives in election fundamentals with poll numbers, an ignited liberal activist base, and voter fatigue after almost eight years of Republican rule in Michigan — and now they have total control in Washington.

Let’s drill down into some recent statewide surveys. Michigan has been a source of endless national fascination after giving Trump a narrow win last year, which helped put him over the top in the Electoral College. That was after Democratic nominees, win or lose, had won Michigan every cycle since 1988. Former President Obama’s margins of victory were 16 points in 2008 and almost 10 points in 2012.

So Trump’s 2016 victory in the Mitten State appeared to be a sea change.

But in poll after poll, indicates that Michigan’s infatuation with Trump was short-lived. His job approval sat at 62 percent negative in the EPIC-MRA survey. And when asked who was a more effective leader as president, 56 percent said Obama and only 32 percent answered Trump.

NBC/Marist had the new president with a 55 percent negative job approval rating. They also polled the other two Rust Belt states that flipped to Trump, Wisconsin and Pennsylvania, where his job approval was at 56 percent and 54 percent negative, respectively.

Snyder’s job approval was 57 percent negative in the EPIC-MRA poll. He’s the fifth most unpopular governor in the country, according to a July roundup from Morning Consult.

His numbers have been in the dumps since the Flint water crisis made international headlines in late 2015, but the governor has languished in negative territory for much of his tenure. Snyder managed to win re-election in 2014 anyway.

So if Snyder and Trump continue to post brutal numbers next year, Republicans can always hope that even some demoralized and disgusted voters will mark their ballots for them in 2018, just as they’ve done in years past.

Susan J. Demas is Publisher and Editor of Inside Michigan Politics, a nationally acclaimed, biweekly political newsletter. Her political columns can be found at SusanJDemas.com. Follow her on Twitter here.

Susan J. Demas: Thanedar Tries To Shake Up ‘18

What does $3.2 million of your personal fortune get you in the 2018 gubernatorial race?

In the case of Democrat Shri Thanedar, it’s paid off in some good fundraising stories (sadly, his name had been axed from most headlines by the end of the news day after the shock wore off) and a within-the-margin-of-error polling performance.

Thanedar, who last year sold his company, Avomeen Analytical Services, “for a lot of money” (as he told the Detroit News), has a fascinating story to tell, something he heavy-handedly does on his campaign website: “My story is one of grit and determination, of the highs of success and the lessons of failure, of unwavering optimism in the face of harsh adversity. It is about pursuing the American dream and never giving up.”

Here’s the thumbnail version: Thanedar escaped poverty in India to earn a PhD in polymer chemistry in America. He settled in Missouri and bought a business, which ballooned and then went belly up. Thanedar remade himself in Michigan with a new company and has now decided he wants to be the state’s next CEO.

Meanwhile, frontrunner Gretchen Whitmer, a former state Senate minority leader known for her leadership on women’s issues and establishment support, raised $1.5 million the hard way. And former Detroit Health Department head Abdul El-Sayed, who’s captured the imagination of many Bernie Sanders supporters, posted an impressive $1 million.

Thanedar needs to make up ground quickly, as his name ID is nil. Though it’s unfair, his accent won’t help him tell his story with some voters in Michigan. Moreover, Democrats are wondering what the newcomer stands for, especially on issues he doesn’t touch on his website, like the Second Amendment and abortion rights.

If no one else jumps into the race, most expect Thanedar to play the role of footnote or spoiler, possibly splitting up the non-establishment vote.

In a February column, I noted that there was some hankering for nontraditional outsider gubernatorial candidates in both parties. Michigan Democrats traditionally have a smaller donor base than the GOP, so a self-funder is always attractive (it’s one reason why many were eager for well-known attorney and University of Michigan Regent Mark Bernstein to get in).

Thanedar, however, isn’t exactly in the mold of other wealthy Dems like Illinois gubernatorial hopeful J.B. Pritzker, a key Barack Obama fundraiser whose family owns the Hyatt hotel chain, or Tom Steyer, a hedge fund manager and climate change warrior who could run for California governor. Thanedar’s fortune isn’t as vast and he’s not ensconced in the party (he gave just $60 to the House Democratic Fund last year and $2,300 to Republican John McCain’s 2008 presidential campaign).

The blueprint for a Thanedar victory is obvious: Our current governor, Rick Snyder. There’s no shortage of similarities. Both are Ann Arbor entrepreneurs who never ran for office before their self-funded outsider gubernatorial bids.

At this point, few would be surprised if Thanedar copied Snyder’s signature move, releasing a biographical Super Bowl ad next year (perhaps declaring himself to be the compassionate nerd Michigan needs right now).

In 2010, Snyder kicked in nearly $6 million of his own money to win a five-way GOP primary. That might explain why the buzz around Lansing is that the Thanedar plans to dump close to eight figures into the ‘18 primary alone, which could make some on his campaign team millionaires themselves. The former CEO could also make things interesting if he can tap into the national Indian-American donor base, as former Louisiana Gov. Bobby Jindal skillfully did.

However, the governor was certainly better known around business and political circles when he embarked on his campaign than Thanedar is. Snyder has always had powerful connections with the more moderate corporate wing of the Republican party (which tolerates the social conservative platform in the name of tax breaks). He also served on the Michigan Economic Development Corp. board and supported the ‘08 embryonic stem cell amendment.  

Thanedar, the 2016 EY Entrepreneur of the Year, has tried to make up ground quickly and has met with dozens of reporters, lobbyists and GOP and Democratic strategists across the state. (Full disclosure: He met with my husband, Joe DiSano, who declined to work with him, and talked with me about writing his biography).

Thanedar has also courted the Small Business Association of Michigan (SBAM), which is smart, but this could ultimately end up costing him. President Rob Fowler told MIRS that Thanedar was initially questioning whether to run as a Republican or Democrat, which is not terribly helpful in winning a partisan primary (especially in these polarized times). While Thanedar has denied the conversation, Fowler is a Lansing institution and a straight shooter respected by both sides.

There’s certainly no shortage of fodder for Thanedar’s rivals if he starts edging up in the polls. But right now, that’s still a big “if.”

Susan J. Demas is Publisher and Editor of Inside Michigan Politics, a nationally acclaimed, biweekly political newsletter. Her political columns can be found at SusanJDemas.com. Follow her on Twitter here.

Susan J. Demas: The Income Tax Cut Could Come Roaring Back

The dramatic collapse of the Michigan income tax cut last month really was something to behold.

In their first big policy push of the new term, the House Republican leadership announced what looked like a surefire winner to (gradually) scrap the state’s income tax, a longtime priority of groups like the Mackinac Center for Public Policy and Americans for Prosperity.

Conservative bitterness over the tax rate stems from the 2007 government shutdown when the state was staring down an almost $2 billion deficit. Then-Senate Majority Leader Mike Bishop (R-Rochester), who’s now a congressman, agreed to a deal with Gov. Jennifer Granholm to temporarily up the 3.9-percent income tax rate to 4.35 percent.

The tax rate was supposed to roll back, but it never fully did. That’s because in his first year in office in 2011, Gov. Rick Snyder had bigger plans for the tax code. He wanted to cut business taxes by $2 billion a year. One of the ways he paid for that was to keep the income tax at 4.35 percent for the first year and then freeze it at 4.25 percent thereafter.

That was a hard pill for the Republican right flank to swallow.

So to kick off 2017, new House Speaker Tom Leonard (R-DeWitt) and his team hatched their plan to whittle down the income tax to nothing over the course of 40 years. This had the added benefit of giving the GOP something to run on in 2018, which they know could be a rough Republican year if President Trump’s approval ratings keep dropping.

Their messaging was simple and effective for voters.

“This is the people’s money, not ours,” Leonard declared in a January press release announcing the plan.

But things quickly skidded downhill from there. Snyder let his displeasure over the tax cut be known. Senate Majority Leader Arlan Meekhof (R-West Olive) wasn’t exactly enthusiastic, either.

It soon became clear that a majority in the lower chamber wouldn’t sign off on killing the tax completely, so it was retooled as a partial rollback.

However, that didn’t solve the huge stumbling block of the first-year $1.1 billion sock to the budget, which several Republicans worried would hit education and infrastructure particularly hard. And future tax projections are running so red that they look like they’re ripped out of a horror movie.

Republicans have controlled everything in Michigan state government for the last six years. But as all comic book geeks know, with great power also comes great responsibility. And that means that it’s completely on the GOP to balance the state’s $55 billion budget (unlike the feds, we can’t run a deficit).

Chopping more than $1 billion from the budget would probably mean worse schools and roads (which voters probably wouldn’t understand after being slapped with huge gas tax and fee hikes). So 12 Republican representatives refused to walk the plank, which torpedoed the bill during a late-night session, a rarity this early on in the year.

Leonard took his share of slings and arrows for putting up the bill without having the votes. But it’s doubtful that too many voters will remember that rookie move when 2018 rolls around. (I took a lot of grief from politicos when I wrote that the Todd Courser-Cindy Gamrat sex scandal would have zero impact on the 2016 election. But I turned out to be correct, as nobody cared once Trump barrelled onto the political stage).

Leonard is also doing a juggling act between leading his caucus and looking ahead to next year when he’s term-limited. He’s interested in running for attorney general, which means he has to be nominated at the state GOP convention that’s dominated by conservative activists. Needless to say, the speaker’s hard line on taxes will be wildly popular with them.

And despite this initial setback, I don’t believe the income tax cut is dead this term. Some may be being lulled into a false sense of security.

Don’t forget that Sen. Jack Brandenburg (R-Harrison Twp.) has been working on his own plan. This isn’t a new cause for the Macomb County small businessman, who was a vocal “no” vote in the House during the ‘07 increase. Anyone who knows Brandenburg knows he’s never going to give up.

And consider this scenario. Let’s say that a Democrat is elected governor in 2018, which even many Republicans acknowledge is a decent possibility.

It’s easy to see the GOP-controlled Legislature mustering up enough votes in lame duck to slash the income tax. That way, they can brag to their constituents in the next election that they fought to put more money in their pockets.

And the best part is they can stick the next governor with the bill.

Let the Democrat how to figure out how to pay for their tax cut. If s/he struggles to do so, Republicans can argue it’s clearly a case of liberal economic incompetence (like we got from Granholm for eight years). And if the new governor wants to get rid of the tax cut, s/he’s a typical liberal tax hiker.

Sure, that would all be wildly fiscally irresponsible. But why let good policy get in the way of good politics?

Susan J. Demas is Publisher and Editor of Inside Michigan Politics, a nationally acclaimed, biweekly political newsletter. Her political columns can be found at SusanJDemas.com. Follow her on Twitter here.

Susan J. Demas: The Next Governor May Be Someone You’ve Never Heard Of

It may be hard to remember now, but nobody thought Rick Snyder would ever be governor.

When he announced he was forming an exploratory committee roughly eight years ago, the Capitol press corps collectively yawned. In polling for a five-way GOP primary matchup, the former Gateway CEO fell within the margin of error.

Everyone knew the race was going to come down to Republican Attorney General Mike Cox and House Speaker Andy Dillon (D-Redford).

Everyone turned out to be wrong.

In 2010, Snyder released his memorable “One Tough Nerd” Super Bowl ad. He showed he was willing to kick in over $5 million from his personal fortune. And he made a late appeal to Democrats and independents, which paid dividends.

Thanks to money, strategy and some luck, Snyder ended up winning the August primary by 9 points and went on to trounce Democrat Virg Bernero in the general election. And despite controversies over Snyder’s conservative agenda, which included Right to Work, he won re-election in 2014, albeit by a far smaller 4 point-margin.

But that’s still a pretty impressive track record for someone with zero political experience who no one initially took seriously.

So after the success that unconventional candidates like Snyder and now-President Donald Trump have enjoyed, it’s kind of curious that most political observers are banking on a conventional scenario for the next Michigan gubernatorial race.

With Snyder term-limited, the jockeying for 2018 has already begun in earnest. If you ask politicos, they’ll tell you they expect the Republican race to be between now-Attorney General Bill Schuette and Lt. Gov. Brian Calley, while giving the former the edge.

And they’d put their money on the Democratic primary coming down to former state Sen. Gretchen Whitmer (D-East Lansing) vs. U.S. Rep. Dan Kildee (D-Flint), with the latter being the favorite.

That’s not a bad bet to make, especially on the GOP side. Most Republicans seem content with those two choices. Calley is young, energetic and speaks the language of the religious right. And Schuette, who’s been elected to positions in every branch of government, is known for hitting the campaign trail in beast mode.

Lesser-known names like state Sen. Pat Colbeck (R-Canton) and Dr. Jim Hines may broaden the field, at least until they have to pony up 15,000 valid signatures next April. But so far, there’s no big self-funding candidate like Snyder on the horizon.

The Democratic side, however, could be more fluid than people think. Some of the party faithful are waiting for Detroit Mayor Mike Duggan to jump in and clear the field, but as of now, he’s playing the role of Godot.

Former State Board of Education President John Austin has long been interested in running, although his defeat last year may give voters pause. And Macomb County Executive Mark Hackel is keeping his name out there.

There are some intriguing and and relatively unknown hopefuls, like William Cobbs, a retired Xerox executive from Farmington Hills, and Dr. Abdul El-Sayed, a Rhodes Scholar and former Detroit health director.

The real wild card is the passionate Bernie Sanders supporters who swarmed the Michigan Democratic Party state convention earlier this month. Both Kildee and Whitmer will battle over these voters, but they can’t change the fact that they’re firmly ensconced in the establishment.

Democrats seem to be desperately searching for change. That could mean there’s room for a Snyder-style darkhorse hopeful in the gubernatorial primary who could really shake things up.

Susan J. Demas is Publisher and Editor of Inside Michigan Politics, a nationally acclaimed, biweekly political newsletter. Her political columns can be found at SusanJDemas.com. Follow her on Twitter here.

Susan J. Demas: Flint water crisis could propel Congressman Kildee to run for governor in 2018

He's a gravelly-voiced guy from Flint, a place nobody spent much time thinking about until last month.

But Dan Kildee has. He was born there. He was raised there. And he became one of the youngest public officials in the country when he was elected to the local school board at 18 (not dissimilar to the path followed by his friend, liberal filmmaker and Flint native Michael Moore).

Now Kildee, 57, is Flint's congressman (succeeding his uncle, Dale, in 2012). Many Democrats had been talking up the younger Kildee for governor in three years.

But there were plenty who doubted he could win in 2018. Democrats traditionally like their nominees to hail from metro Detroit, where the big media markets are and so are the votes. (That's why many are enamored with Detroit Mayor Mike Duggan running, although he's gruffly brushed off any speculation.)

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Susan J. Demas: A tale of two governors: Jennifer Granholm got the blame, Rick Snyder gets none

Let's say that as governor, Jennifer Granholm had pushed a massive tax increase and voters killed it by a 4-1 margin.

Do you think she would have gotten the blame? 

Would newspapers have editorialized that it was a failure of her leadership? Would political observers blame her team for the poor messaging? Would there be jokes circulating around the Capitol that that's what happens when you put a woman in charge?

Of course. And aside from the sexist cracks, I would have been right there with them (Folks with long memories may recall I wasn't Granholm's biggest fan).

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Susan J. Demas: Michigan Gov. Rick Snyder isn't running for president. Here's what he's doing

No, Rick Snyder is not going to be president.

He's much too smart to relegate himself to being one of 19 Republicans (who are almost all far more well-known than he) smushed on rural New Hampshire stage -- just hoping to get more than three words in between Ted Cruz's visions of Obama-inspired Armageddon and Marco Rubio mugging for the cameras. 

As an Iowa caucuses native, I can say Snyder would hate coffee klatches, where you're asked kooky questions about getting back on the gold standard that you must gracefully humor.
Let's be honest. Rick Snyder looks uncomfortable campaigning in his home state and even against just one opponent, which is why he cleverly launched his one-man town hall circuit in 2014.

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Susan J. Demas: Big money pours into 2014 Michigan election for winners and losers

People spent $80 million (and counting) on annoying TV ads this election, and all I got was this lousy headache.

Yes, almost $48 million was plunked down for ads for Michigan's gubernatorial race between incumbent Republican Rick Snyder and Democrat Mark Schauer.

Not surprisingly, Snyder was helped more ($26.6 million) than Schauer ($21 million).

But both sides recognize this race would be close and spent accordingly. They were proved right (no, a 4-point margin for Snyder does not a mandate make).

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