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Republicans Place Risky Bet on 1980 Economics to Win in 2010

5 years ago
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Republicans are relying on 30-year-old economic ideas to catapult them to congressional majorities in the November midterm elections. But that's a risky business, given that so many Americans remain strung out with anxiety over money, jobs and health insurance.
At first glance, nothing would seem safer in 2010 than campaigning on the old Ronald Reagan themes of less government, less regulation, less spending and lower taxes. After all, voters are angry about bailouts, concerned about deficits, worried about their personal finances.
Let's put aside the fact that Reagan greatly expanded government and raised taxes numerous times, and that lax regulation of Wall Street, coal mines, and oil drilling has led to a few problems lately. Likewise we'll put aside big-time deficit spending by George W. Bush and his GOP Congresses. Republicans now say they were wrong, they have reformed and this is a new beginning.
To that end, House Republicans have launched "YouCut," a weekly public referendum on five spending cut proposals. The minority party then tries to force a floor vote on the winning cut. It's a clever idea, but we probably shouldn't hold our breaths waiting for big-ticket cuts or any that gore GOP oxen. So far the YouCut chopping block has featured spending that benefits the poor or the United Nations or federal workers, or the occasional exceedingly special interest like mohair. There's been no expensive equipment the Pentagon says it doesn't need, or unpopular curbs on the future growth of Medicare or Social Security spending. No suggestions for closing tax loopholes, either.
House Republicans also have instituted a temporary, unilateral moratorium on earmarks -- the pet projects lawmakers insert in bills without a competitive evaluation process -- although it's not clear that all GOP lawmakers want to comply. The GOP House campaign committee, meanwhile, in press releases to dozens of targeted congressional districts, is going after Democrats for "their job-killing runaway spending spree" (although, actually, private-sector jobs are being created these days). The GOP press releases assert that "the economy is so bad off that (insert Democrat's name here) and his party leaders refuse to even pass a budget."
It took me a while to understand what seemed like a non-sequitur. Apparently, the economy equates to the deficit in this case. And it is certainly true that heavy spending -- to shore up banks, auto companies, states, localities and the economy in general -- has swelled the deficit and national debt to record levels. That is making lawmakers in both parties tense about spending more money. It has already led to the defeat of at least one incumbent, veteran Republican Sen. Bob Bennett, who failed to win renomination in Utah.
Democrats are not ignoring voter apprehensions about spending. A day before the GOP passed its temporary moratorium, House Democrats imposed a ban on earmarks for private companies. And President Obama has proposed a number of steps, among them a freeze on domestic discretionary spending, a bipartisan deficit commission, and a plan to revive the line item veto in a way that's constitutional. Moreover, Democrats and Obama have been trying to emphasize all the taxes they've cut in the past 18 months, including payroll tax cuts for workers and a number of business credits and cuts designed to foster job creation.
Yet from a stark political standpoint, the bottom line is this: Most people do not choose spending and deficit reduction when asked what the federal government's top priority should be. That honor goes to jobs and the economy. In Fox News and NBC-Wall Street Journal polls this month, spending came in a distant second place (the gap in the Fox poll was especially huge -- 47 percent picked jobs, 15 percent spending).
Another indication of what matters came in a special House election last week in a blue-collar, conservative leaning part of Pennsylvania. Republicans ran a campaign against Washington and House Speaker Nancy Pelosi, and expected to win. But Democrat Mark Critz, who had been an economic development specialist for the late Rep. John Murtha, pulled off an 8 percentage point victory. Critz pledged in his campaign to focus on jobs in the tradition of his late boss, a champion earmarker and one of Pelosi's closest friends in the House.
Let's extrapolate from that Pennsylvania district to the big picture. The national jobless rate is 9.9 percent. In some states with critical Senate and House races, it is much higher: 13.2 percent in Nevada, 12.6 percent in California, 12 percent in Florida, 11.2 percent in Illinois, 10.9 percent in Ohio, 10.7 percent in North Carolina. Are voters enduring hard times going to be more interested in spending cuts, or in spending that extends health and unemployment benefits and keeps teachers and cops on the job? Are they going be up in arms over earmarks, or over the jobs and projects they won't get because of an earmarks moratorium?
Most fundamentally, will they blame Democrats for their current plight, or give them credit for partially digging out of a hole left by Republicans? Both are valid reasons for a voting decision, and obviously a lot depends on how well Democrats explain their spending choices. They do have a case to make, about saving and creating jobs, investing in infrastructure, technology, research and clean energy, averting a Great Depression, providing greater health care security to Americans and trying out ways to reduce health costs. Before Congress leaves for the summer, they'll likely be able to say they tightened the reins on Wall Street to avoid another 2008, with the country staring into an economic abyss.
Almost all Republicans in the House and Senate opposed those initiatives, and believe they were right to do so because many of them are unpopular. They are not inclined to rejigger a formula that has won them the White House for 20 of the last 30 years, and congressional majorities for most of that time. The latest sign of staying the course is America Speaking Out, the new website House Republicans say is meant to help them formulate a bottom-up governing agenda.
The enterprise raises some questions: Who exactly will be speaking out? Will there be any effort to draw people who aren't already conservative Republicans? What if GOP leaders hear things they don't want to hear? What if people are more concerned about jobs than the deficit? What if they want the government to spend more money on them, not less? What if they suggest cuts in agriculture subsidies or a tax on financial transactions? What if they want to end tax loopholes for hedge fund managers and corporations that move jobs overseas?
In other words, what will become of ideas that aren't 100 percent in line with conservative principles? The answer, House GOP leaders said Tuesday, is they won't be part of the new agenda. "Someone who wants to come on and make suggestions on how to raise taxes, for example, they're welcome to do that, but it's not something that we're going to take up," said Rep. Kevin McCarthy (R-Calif.), chairman of the new project. Added conference chairman Mike Pence (R-Ind.): "This is not a political party in search of a keel or in search of principles. It's not a listening tour. House Republicans know what we believe."
I'll give them points for consistency, and for a certain level of high-tech cool. But make no mistake, this is not about how to give health coverage to 31 million people who won't have it if Republicans manage to repeal the new health law or get the courts to strike it down. It is not about strengthening the safety net for 15 million jobless Americans, and it is not about outreach. It's about doubling down and leading us toward a future that could look more like the past than the past ever did.

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Seriously, are we to fall back on the past administration to shore up blame for the present eighteen months into the government that promised no higher than 8% unemployment if the stimulus bill were only to be passed? Foolish enough for anyone to promise a certainty of a limit on unemployment. Are we naive enough to think that no blame lies with current policy while Greece burns, and Spain too? We should be so distracted by partisan blame or exchange of simplistic platitudes of political rectitude as to ignore the cause and effect of our present choices. Our creditors are not blaming half the country. They're holding both halves accountable.

June 01 2010 at 1:27 AM Report abuse rate up rate down Reply

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