Six days before Christmas, Sen. Sherrod Brown stood before the Senate and made this prediction about the tax overhaul championed by Republicans and President Donald Trump:
"These dollars will not go to employees and not go to investing in more jobs."
Nearly a month later, a host of companies in Ohio and across the U.S. have announced employee raises and new investments, and GOP backers exulted.
Trump tweeted, "Companies are giving big bonuses to their workers because of the Tax Cut Bill. Really great!" And on Sunday, House Speaker Paul Ryan said more than 2.6 million Americans have received bonuses or wage increases in the three weeks since the Tax Cuts and Jobs Act was signed into law.
So was Ohio’s Democratic senator wrong?
You won’t hear him say that, although he likes it when his constituents benefit.
"These workers have earned a raise and I applaud Ohio companies who are doing the right thing," Brown said in a statement prepared for this story.
"I wanted to put even more money in the pockets of even more Ohioans by cutting their taxes directly instead of passing a bill that gives 83 percent to the top 1 percent in the country."
Republicans, as you might expect, are having none of it. With Brown up for re-election this year in a state that Trump carried by 8 points in 2016, the GOP has pounded him on several fronts for opposing the tax changes.
"Career politician Sherrod Brown’s opposition to the Republican tax cut looks worse and worse as workers see the economic benefits of the plan in their own paychecks," said Bob Salera, deputy director of the National Republican Senate Committee, the day Nationwide Insurance announced $1,000 bonuses for all but its top-paid employees.
When Fifth Third Bank, based in Cincinnati, rolled out an increase in its minimum wage to $15 an hour plus a $1,000 bonus to thousands of employees, Chris Pack, spokesman for the Senate Leadership Fund, said, "Kudos to Fifth Third Bank for doing what Sherrod Brown has failed to do during his entire dismal career in the U.S. Senate — providing relief to the middle class."
When the tax cut bill passed, Ellie Hockenbury, regional communication director for the Republican National Committee, said, "When voters go to the polls next November, they will remember that Brown bowed to Democrat party leadership instead of helping Ohio’s middle class."
But the 51-48 approval of the $1.5 trillion tax cut bill did not end the struggle over the proposal. With polls showing the measure remains unpopular with U.S. voters, both sides are striving to control public opinion. The outcome of that tussle for Americans’ hearts and minds could determine who wins this fall’s mid-term election and controls Congress.
Voters in battleground states such as Ohio are especially likely targets for the competing spin operations, since GOP-friendly groups — including one led by billionaire Oklahoma industrialists Charles and David Koch — have launched a multimillion-dollar public relations campaign to sell the tax changes.
Republicans are counting on public opinion to turn their way when Americans skeptical about whether they would see a tax cut actually get larger paychecks after the IRS adjusts withholding tables next month.
Brown’s office cites three primary reasons why he has not backing away from his Dec. 19 claim:
• In many cases, a direct link was not established between the tax cut and ensuing raises and bonuses to workers, nor with companies’ plans for investment. For instance, in Columbus, the head of a company visited by Ohio GOP Sen. Rob Portman because it announced an expansion after the tax changes told The Dispatch that the investment probably was going to happen anyway, but the cuts made the decision a no-brainer.
• Some of the companies are giving raises or bonuses with one hand but making cutbacks with the other. For example, when Walmart declared last week an increase in its minimum wage from $10 to $11 an hour and a $1,000 bonus for many employees, the company also announced the closing of 63 Sam’s Club stores.
Tax bill supporters tend to count only one side of the equation. After Walmart’s twin announcements, Trump press secretary Sarah Huckabee Sanders tweeted: "Huge news! Truly amazing and inspiring to witness the tax cuts lifting millions of hardworking Americans up."
• While hourly raises or one-time $1,000 bonuses to workers are nice, they pale next to the huge executive bonuses and stock buybacks many corporations are offering. Even before the tax cuts passed, several large companies acknowledged the money would go to shareholders, not workers.
"They would keep that money for themselves. They will do bigger bonuses, they will do stock buybacks, they will do dividends," Brown said in his Senate speech, which stretched nearly 20 minutes.
"History shows anytime they get big tax cuts, anytime they bring money from overseas, the money doesn’t go to employees’ pockets or create jobs, it goes to give more benefits to the executives."
A 2014 Harvard study showed that S&P 500 companies used more than 90 percent of their profits to buy back stock and pay dividends to investors instead of increasing worker pay.
Brown noted that he pushed for a direct tax cut for middle-class workers, instead of giving the bulk to top earners and hoping the largess will trickle down.
"Instead of cutting taxes for the middle class, though, Washington chose to cut taxes for millionaires and corporations and pay for it by cutting Medicare and kicking people off their health insurance," he said.
(A similar statement by Senate Minority Leader Chuck Schumer about the bill "kicking off" people from their health care because the GOP ended the Obamacare mandate to buy health insurance was given two Pinocchios out of four by Washington Post fact-checkers, meaning it wasn’t entirely accurate.)
The bottom line, a Brown spokeswoman said, is that "it is still true that, nationwide, the vast majority of the benefit corporations get from the tax bill will go to CEO pay and shareholder profits, not workers."
Senate Democrats have compiled a list of about $90 billion in stock buybacks since the upper chamber approved the tax bill in early December that, along with typically helping shareholders, usually benefit executives whose pay is based on stock prices.
For example, the $23.6 million Fifth Third committed last month for the initial year of increased worker raises and bonuses is less than a tenth of the amount of a stock buyback that Morgan Stanley announced a couple of days earlier.
A Fifth Third news release said the tax changes allowed it to re-evaluate its employee pay and share some of the windfall with workers. But the total new money for employees is only a bit more than the total of what the bank’s six top executives were paid in 2016.
Brown said he supported cutting taxes for corporations, but only if they keep jobs in the U.S. and invest in American workers.
The tax debate won’t end anytime soon, especially if U.S. Rep. Jim Renacci of Wadsworth wins the GOP primary to challenge Brown. Renacci, one of the wealthiest members of Congress, touted the tax changes in several TV appearances in late 2017.
drowland@dispatch.com
@darreldrowland