IE 11 is not supported. For an optimal experience visit our site on another browser.

On 'three-martini-lunch' policy, Republicans get what they wanted

Republicans can try to be "the party of the working class" or it can champion the "three-martini-lunch deduction." But to do both is ridiculous.
Image: A man on a laptop with a martini
According to a March survey from personal finance website, nearly half of 2,000 Americans surveyed said they'd made a purchase while under the influence.Niki van Velden / Getty Images

A few weeks ago, Senate Majority Leader Mitch McConnell (R-Ky.) said he was sticking to a paltry economic relief package, which did little for millions of struggling families, but which included a striking GOP priority: the "three-martini-lunch deduction."

Whatever happened to that? I'm glad you asked. The Washington Post reported overnight:

The draft language of the emergency coronavirus relief package includes a tax break for corporate meal expenses pushed by the White House and strongly denounced by some congressional Democrats, according to a summary of the deal circulating among congressional officials and officials who are familiar with the provision.

Let's review how we arrived at this point. As regular readers may recall, it was Donald Trump who helped get the ball rolling on this in April and May, pushing lawmakers via tweet to approve "business deductions" for "restaurants & entertainment."

At face value, the idea may not seem outlandish. After all, the restaurant industry has been brutally slammed by the pandemic, and it's hardly unreasonable for policymakers to look for ways to give the industry a boost.

But the details matter. At issue here is a tax break to those who talk business while eating out. As the Center on Budget and Policy Priorities' Robert Greenstein noted a while back, the "three-martini-lunch deduction" is generally celebrated by wealthy executives and lobbyists.

Jon Chait added, "It is certainly true that restaurants face an existential threat from the coronavirus. But letting executives write off the cost of meals where they 'discuss business' -- a notoriously lax requirement that functionally subsidies pleasure as a business cost -- is unlikely to save those restaurants."

So why in the world would Democratic negotiators agree to include this policy in the final economic relief package? Because GOP lawmakers made it worth their while: the Post's report added that Democratic leaders "agreed to the provision in exchange for Republicans agreeing to expand tax credits for low-income families and the working poor" in the bipartisan agreement.

And therein lies the rub: the "three-martini-lunch deduction" is amazing in its own right, but more important is what the fight over the policy tells us about the major political parties in 2020.

GOP leaders occasionally try to make the case that the Republican Party is the party of regular folks, pushing populism over elitism. Sen. Ted Cruz (R-Texas) recently argued that today's GOP is "the party of the working class."

The trouble, of course, is that reality keeps getting in the way. Regular folks in the working class don't generally feel the need to deduct the cost of business lunches. They do, however, benefit from tax credits for low-income families and the working poor.

Republicans can try to be "the party of the working class" or it can champion the "three-martini-lunch deduction." But to do both is ridiculous.