May 5, 2009
POLITICS: Why Republican Unity On Spending Matters
While the defection of Arlen Specter to the Democrats had a number of causes, the proximate cause was that his support of the Obama stimulus bill brought Pat Toomey off the fence and into a primary race Specter would have lost. Jim DeMint followed this up with a provocative WSJ op-ed arguing for more purity in the GOP caucus in sticking to small-government principles and opposing big federal spending. There's been a lot of hand-wringing about whether the Toomey run and the views of people like Sen. DeMint mean the GOP has become too narrow and exclusionary to appeal to moderates. (Leave aside Barney Frank saying the same thing on the other side). As a deep-blue-state Republican, I have always been a believer that the GOP needs to have some flexibility in the demands of party loyalty if it is to have a tent big enough to contain a majority governing coalition; sometimes our elected officials need to treat our principles as a compass, not a straitjacket. But broad generalizations about "conservative" and "moderate" miss the fact that politics is situational. And the political situation we find ourselves in today demands that the GOP have a strong preference, in every jurisdiction, for candidates who will hold the line on spending.
How We Got Here
Let's start by briefly recapping where we have been. The Reagan Revolution did not spring ex nihilo from the mind of the Gipper; it was the culmination of decades of pent-up, un-responded to public disapproval of high taxes, big spending, heavy regulation, and extravagant and flagrantly unsuccessful welfare policies. What finally cleared the way for Reagan was unified Democratic governance and the mess it made under Jimmy Carter. Reagan, of course, was a genuine conservative on all fronts, but even Reagan had to pick his battles, leaving some segments of the party happier with him than others. Eventually, a combination of bad decisions, weak leadership, bad economic circumstances and political tides brought down Reagan's successor; at the core of the fall of George H.W. Bush was the loss of credibility that came about when he broke his pledge not to raise taxes, leaving voters in peacetime without a reason to distinguish him from his opponent.
But then Bill Clinton came to town, jacked up income taxes and came perilously close to imposing a ruinous energy tax plan and a disastrous government takeover of health care. Strong GOP opposition helped derail the latter two plans, and restore a clear contrast between the parties. The Gingrich Revolution of 1994 - like the Reagan one triggered under unfied Democratic governance - was largely about small government, taxes and spending, and the spending hawks got their turn at the head of the party from about 1995-98. They had some signal successes, including reducing federal spending to below 21% of GDP for the first time since Watergate, a benchmark it has stayed below until this year. But they were also outmaneuvered by the elusive Clinton, and after Clinton declared that "the era of big government is over" and worked with them to balance the budget (with a big assist from the late-90s tech boom), public enthusiasm waned.
The GOP responded by nominating George W. Bush, who accused the GOP Congress of "balancing the budget on the backs of the poor" and set about relegating the spending hawks to the back of the bus with the immigration hawks. Instead, Bush built a winning coalition in 2000, 2002 and 2004 on the three pillars of national security, taxes and social conservatism. With a war on, the spending hawks swallowed more of this than they generally wanted to.
Bush's record on domestic discretionary spending was never as bad as it was portrayed - certainly the contrast to Obama has reminded us of that - and he did try things (like Social Security reform) that would have made a difference if they'd passed, and some of his individual initiatives are defensible on the merits ... but DeMint aptly summarizes how the Bush-era GOP's cumulative effect, combined with a handful of Capitol Hill scandals that unsurprisingly tended to arise from allocation of federal spending, eroded the GOP's distinctive message of taking better care with other people's money and thus respecting the freedom over one's own property that forms the foundation of all other liberties:
No Child Left Behind didn't win us "soccer moms," but it did cost us our credibility on locally controlled education. Medicare prescription drugs didn't win us a "permanent majority," but it cost us our credibility on entitlement reform. Every year, another Republican quality was tainted: managerial competence, fiscal discipline and personal ethics.
Now, we come full circle. Once again, the Democrats have unified control of the government. Once again, they are on a spree, jacking federal spending up to 26% of GDP in a single year, blasting the deficit into orbit, rolling out plans for more taxes and regulations, plotting to nationalize health care and tax energy. Once again, the popular anxiety and anger is out there, as the voters wonder whether anybody has a better answer. Who should they call?
How We Get Out
In short, the current situation calls for the party to once again - as it did in 1980 and 1994 - re-emphasize spending discipline, lower taxes and less intrusive government. The fact that this is an especially powerful message when the Democrats are running things is not coincidental. But to do so, the GOP needs to convince voters of two things: first, that what the Democrats are doing is really bad; and second, that the GOP, if given more power, will actually do something and not just posture, fall back into bad habits or go along with the Democrats. And with the small megaphone of a legislative minority, Republicans need to paint in bold strokes to get heard at all.
This is why party loyalty on this issue is so critical at this time. If a lot of Republicans sign on to Obama's bills, he will have a leg up in claiming to the public that he's not really up to anything dramatic. He knows that - it's why he tried so hard (if ham-handedly) to get Republicans to support the stimulus, and why he has tried so many legal maneuvers to compel unwilling Republican governors to accept stimulus funds and thus make it seem as if they approved of the whole idea all along. (And it is, in fact, hard even for true believers to say no to the money when the federal government has effectively already taken it from your constituents and is only asking if they want a little piece of their own money back). Only a united front can match through actions what the President - by virtue of the bully pulpit - gets to say in words.
And to rebuild the GOP brand on this issue, party unity is also critical. Contrast the ever-controversial issue of abortion. It is well-known that the GOP is the pro-life party. But voters also know and understand that some Republicans - like Rudy Giuliani, or like Specter before he switched - are not pro-life. It's not difficult to accept that dichotomy: pro-choice Republicans call themselves "pro-choice," and so voters can discern the difference without a lot of difficulty and without unduly watering down the party's longstanding identification with opposing abortion.
Spending is different. All Republicans, and most Democrats, run around saying they are opposed to excessive government spending. Northeastern Republicans, in fact, have tended to excuse their views on abortion, in fact, by intoning that they are "socially liberal but fiscally conservative." What are voters supposed to believe when they hear those terms? Only what the parties can prove by their actions. If voters are unhappy with Democratic policies on spending, taxes and regulation, and they see that a bunch of Republicans voted for all those things, they will reasonably conclude - and Democrats will be happy to tell them - that Republicans don't really oppose them or that Republican opposition is somehow not realistic. "Don't listen to those guys, they just want to change who spends the money." If the GOP runs a bunch of candidates who deviate from the party line on opposition to Obama's spending plans, they water down the message of everyone who does.
The special election in NY-20 should be a wake-up call. Republicans ran a candidate who (1) was tied to the bloated, corrupt and incompetent Democrat-dominated state government in Albany, where the GOP has not done much to draw contrasts on spending discipline and its close cousin, public integrity; (2) failed to take a clear, early stand against the stimulus bill; and (3) attacked the Democrats' businessman candidate on liberal-populist grounds as an outsourcer who created the wrong kinds of jobs for the wrong kinds of people. Somehow, we were surprised that this didn't work.
And that's why even a GOP that can ill afford to lose another Senate seat is better off running Pat Toomey than Arlen Specter. Because right now, under today's political circumstances, the only road back in the short term or the long term is to offer an unambiguous message to the voters: if you are not happy with how the majority is doing things, you have a choice.
This retelling of Republican history seems to me to be quite wrong. Spending hawkery has NEVER been a popular position, other than for a year or so from late 1994 to mid 1995 when there was a backlash against Clinton's health care plans and taxes on the middle class.
The idea that spending hawkery was popular at any time since mid 1995 seems to me to be a misreading of history. Clinton killed Dole in 1996 on the basis that Dole would cut spending on "Medicare, Medicare, education and the environment". The Democrat followed up by winning the elections in 1998 (even though it was the 6th year of Clinton's term). Republicans only won the Presidency in 2000 because Bush promised more spending and tax cuts (and Republicans lost ground in Congress that year). And Republicans increased spending a lot in 2002 and 2004 and won elections.
Let's face it: increasing spending is popular. Reducing the Republican brand to a single-minded focus on decreasing spending is a sure way to *hurt* the Republican brand, not help it.
Moreover, it hurts Republicans to continue to claim that people like Specter (and, presumably, the other Republicans who voted for the stimulus: Snowe and Collins) should not be part of the Republican coalition. These politicians *are* fiscally conservative - relative to the states they come from. Republicans seem to have this moronic idea that "fiscally conservative" should mean the same thing in South Carolina as it does in Pennsylvania or Maine. But politics doesn't work like that. Specter is (or was) more fiscally conservative that the average Pennsylvania Democrat. Snowe and Collins are are more fiscally conservative that the average Maine Democrats. That's the standard by which we should be judging them. To judge Specter against some like Toomey, who can never, ever, ever get elected to statewide office in Pennsylvania is downright moronic. We might as well judge Specter against the tooth fairy.
But I've always though of the Republican Party as the stupid party (and I'm a Republican). As usual, Republicans are doing everything possible to destroy the party to which they belong. It's just sad to see Crank join that group.
Dude-1.8 trillion annual deficit. 52 trillion dollars in outstanding obligations-Medicaid, SS, other. Trillion dollar deficits as far as the eye can see. States going bankrupt left and right due to out of control social spending and the salaries, health care and retirement for unionized workers. The Democratic party promising more entitlements , more unionized workers and greater government control of the economy-If now is not the time for Fiscal Conservatism-when?
A.S. - the think about "spending hawkery" is that it is, generally, an effective position when you are running in opposition. It's just that once you are elected, the voters tend to think you meant you'd cut spending on somebody else.
Also, I think all smart people who pay attention to politics tend to consider their own party the stupid one.
Jerry nails it on the head.
Regarding spending, the question I always ask of the Republican party is whether they are willing to restrain military spending. The answer I get from Reagan onward is "no." It's useless to stress lower taxes and less social spending if you are simply going to turn around and spend those savings somewhere else.
As a percentage of the budget, miltary spending has been declining, with upticks here and there, for over 40 years. We use to have a standing military of over 3 million soldiers, now its what 1.2 or so-with a much larger population. Social spending with its out of control growth and the future obligations is what is strangling this country. We cut miltary spending in th 70s and the Soviet Union expanded their miltary and influence. Slick Willy and his "peace dividend" underfunded the miltary by 400-500 billion dollars and cut intelligence spending by about 30%-3000 dead americans later and a worldwide terrorist network called Al Quaeda-that really doesn't appear to have been prudent spending cuts. 52 trillion dollar projected shortfall and not one cent of that is for future military spending. Yes, we can homogenize our military hardware across the services and we can spend our money more wisely on workhorse equipment instead of show horse equipment, but military spending is not what is bakrupting state and local governments its medicaid. And we have a party in this country that despite seeing a 26 trillion dollar hole caused by government health care spending is much much more.
Are you counting the cost of the two wars we're fighting as military spending? I've heard those costs were "off the books".
As for the 3000 dead, my condolences to their friends and family--but only 911 Truthers really think that day was important. The rest of us followed GWB, and decided it wasn't important enough to look into how it happened. (i.e. Condi lied, and Bush made her Secretary of State).
Reducing the Republican brand to a single-minded focus on decreasing spending is a sure way to *hurt* the Republican brand...
Take a look at that graph again and tell me this doesn't need to be addressed. I don't know if it has to be "single-minded", though that suits me fine, but somebody's got to try to get spending back under control. I find it hard to believe many Americans don't or wouldn't feel the same.
A few points, from the past going forward.
 Politically, tax increases are very unpopular ... spending is always popular -- in theory "wasteful, big" spending may be unpopular, but spending on me is always very popular, and that's what politicians use to get votes ... and the result of course is deficits, with deficits above a point being unpopular.
Ergo Milton Friedman's dictum: cut taxes to restrain spending thru the effect of deficits.
 The "Gingrich revolution" Republicans did NOT cut spending 1994-2000. Spending declined as a portion of GDP due to four factors:
(1) Bipartisan "paygo rules" enacted during the Bush I years, in response to the huge Reagan deficits (see Friedman above) that required spending to be financed with new taxes -- a serious constraint to politicians.
(2) Decline in defense spending after the collapse of Communism.
(3) Divided government, in which Clinton and the Repubs blocked each others' spending programs. (E.g.: reducing Clinton's social spending initiatives from "nationalized health care" to "midnight basketball").
Note well: THIS is what you want for spending restraint ... divided government!
(4) The totally unexpected huge economic boom, which increased the denominator in the equation.
ALSO note well: The moment that the first surplus came in, the "paygo rules" went overboard (see Friedman above) and Gingrich and Clinton started shoveling out the money again together ("a billion for you, a billion for me, a billion ...") to get their respective troops re-elected in 1998.
 The party in power is always pro-spending, the party out of power always poses as "fiscally responsible", the reasons for these facts should be obvious. Democrats or Republicans, same difference.
There's no real-world example of this more clear than the recent power flip-flop. When the Repubs were "in" nobody was more porky than them -- not only with bridges to nowhere but also with tax slashes which *are* spending, used exactly like cash expenditures to buy votes, with the same effect on national (in)solvency.
Don't get me wrong, like Friedman I surely prefer tax cuts to spending increases, for political reasons, but tax cuts NOT FINANCED BY SPENDING CUTS have the exact same purpose and economic effect as spending increases not financed by tax increases -- vote buying at the cost of national solvency.
(And don't anyone kid yourself that such tax cuts are good for the economy. Even the Bush II Treasury said that in the long run tax cuts are BAD for the economy if they are not financed with matching spending cuts.
Friedman famously pointed this out too: The govt's only source of money to spend is taxes [including if it borrows, because the tax cost of debt service equals the size of the debt] so it is *impossible* to cut taxes without cutting spending, doing so only *defers* the taxes. Spending determines taxes, dollar for dollar. Economically, tax cuts without spending cuts are a sham. )
Of course during the Dubya years the Dems were all "fiscal responsibility" -- but look at them now, with a $1.7 trillion deficit in their first year!. And of course the Repubs suddenly have taken fiscal responsibility to their collective heart -- as of getting the boot.
If Obama crashses and burns and the Repubs take sole power again, you will see the two parties reverse on "fiscal responsibiliy" again -- you can bet your retirement savings on it.
 The "spending-(lack of) fiscal responsibility" problem and fiscal crisis it is taking us toward is NOT a "left v right" or "Dem v Repub" thing -- it is universal across the entire developed world in modern democracies, no matter who is in power. Here, before your eyes, is the proof.
It follows, as night follows day, that going partisanly conservatively Republican when the Repubs are out of office, ain't going to solve it. Because when they are back in office they will again act just like their former selves and every other political party in power in the world! (There's a reason why they all act this way!)
 For all the problems metioned above, actual current spending as reported in all the current deficits is *not* the real problem. The Bush II and Obama deficits as officially reported could run for decades without doing serious harm to the economy.
The Killer Problem is promised *future* spending that politicians use to buy votes today withouut incurring any current tax cost that harms them. (See, "Republicans and Medicare Part D".)
Including *that* in the deficit, by computing it under the same accounting rules that the private sectors uses, produces an annual deficit and total national debt, of ... Yikes!
If one imagines that could lead to a crisis...
 Here's where we are heading to, by 2030, only two-thirds of a home mortgage term away, as a result of all the above.
Republicans can show America how serious they are about spending by railing against corporate welfare.
They'll perform gay marriages in the town square 100 years before that happens*.
*I don't really believe Republicans hate gays, they just use it as a wedge to get the votes of the bigots. Corporate executives, the ultra-rich, and easily confused people who vote against their own economic best interests won't get you 50% of the vote. The bigot bloc makes up the other votes needed to get the first 2 groups elected representation.
"As a percentage of the budget, miltary spending has been declining, with upticks here and there, for over 40 years. We use to have a standing military of over 3 million soldiers, now its what 1.2 or so-with a much larger population."
It's the cost of wars too, as Berto notes. Right now we don't need a standing army of 3 million soldiers or anything near what it was in the cold war. The goal back then was to be able to fight 2.5 wars - 2 major wars and a regional one - presumably against China, the USSR and half-war like Vietnam.
We don't have anywhere near that problem today. It was necessary to draw down the military after the cold war and into this century. Yes, some adjustments have to be made for terrorism, and I'm not per se against a missile shield if it's feasible.
My big worry is that the Republican party will be too quick to pull the trigger in the event of a "crisis" - and they seem to view every international incident as some sort of challenge to US leadership. You can't have a knee-jerk, military reaction to everything that goes on the world. I don't know if I trust the Republicans to exercise restraint when it calls for it.
That graph Crank pointed out -does- need to be fixed, and a lot of it is social spending. But if the republicans are going to spend it on foreign affairs as opposed to social spending, then the fiscal problem will remain.
I hope the GOP does as Crank advises, but neither party is willing to take the steps necessary to significantly reduce the debt. The GOP goes into spasms at the mention of taxing at a level sufficient to fund the government the citizens wants. The Dems are unwilling to be take a hard look at government spending and do serious cutting. And neither party is willing to be honset enough to explain to the citizenry that there are no "free lunches" and some level of sacrifice is necessary.
In the end, we get the situation we deserve.
"Who should they call?"
Couple of problems with this chart. I've written the Washington Post about it, though I doubt it will be changed.
You've argued that Clinton never had a surplus, and that debt went up. Largely, this was due to debt rolling over. This chart does not nearly reflect how much actual debt was accrued, and to be consistent in arguments it would not be used.
"federal spending up to 26% of GDP"
Comparisons of spending to GDP are good - but don't forget that we are both in a falling GDP right now and that a substantial part of the past 3 years of GDP has been based on unsustainable personal debt. Let alone how (mostly starting with Reagan) both federal spending and GDP has been built on government debt.
"government has effectively already taken it from your constituents"
Actually, if you look at the State money received from Federal sources, many of the governors are in states that already receive more money in federal spending than put in.
It goes to logic that following existing patterns, much of the money will be from outside the state and not taken from their constituents. Poor New Jersey.
"Only what the parties can prove by their actions"
I've been recently told that many Republicans believe Country First. As far as the stimulus is concerned, an economist who is entirely against government spending and is honest would state that they have no idea if this spending would be good or bad - even if they've spent their lifetime arguing against it, since few examples exist. Most don't, or aren't willing to - smart people can realize this.
And I believe, much as you state, that these votes were not for Country First. They were for party first - to truly show that politics is situational, the near universal rejection with the stimulus would not have been using the spending straightjacket.
Allowances could have been made to say "we're in trouble now, and we believe this may be bad, but we'll make an exception so long as it is only high quality. Not after this." And that's without going into the open secret that some Reps thought this was good, but were afraid of primary challenges.
I embrace spending discipline, and hope it continues, and hope it isn't just to make the other guys look bad.