fbpx
Politics Foreign Affairs Culture Fellows Program

Trying To Have It All

If we instead refuse to raise taxes right now, we will be setting a stage in which cuts in federal spending are the only path. Cutting spending will seem inevitable, like something that will actually happen. This will give rise to hope. There’s a way out! We can do it! ~Peggy Noonan This is silly. […]

If we instead refuse to raise taxes right now, we will be setting a stage in which cuts in federal spending are the only path. Cutting spending will seem inevitable, like something that will actually happen. This will give rise to hope. There’s a way out! We can do it! ~Peggy Noonan

This is silly. Maybe there is a case that extending all of the 2001 and 2003 tax cuts is desirable for spurring economic growth, but the idea that extending the tax cuts will compel spending reductions is pretty clearly nonsense. Spending cuts won’t “seem inevitable.” As always, they will seem readily avoidable, as they have been for decades. During the 1999-2000 presidential primary debates, Bush explicitly invoked the “starve the beast” argument to guard against attacks that he was not fiscally conservative enough. We know how that worked out. Taxes went down, spending exploded, and the deficit soared. As Bruce Bartlett argued last week, the “starve the beast” theory is nonsense. The tax debate offers a very simple test for all those newly-converted deficit hawks who claim to care so much about mounting federal debt: Republicans can refuse to extend some or all of the tax cuts if they genuinely wish to tackle the problem of debt, or they can make clear that this problem doesn’t really matter to them right now. Senate Republicans have made clear that they want to increase the deficit, and will hold up legislative action on everything else until that happens.

Coming back to Noonan, spending cuts will not be “the only path.” The other path of growing the deficit is the path that both parties always take. They do this because it is true that most voters don’t care about deficits, and any party that makes any effort to impose real austerity or reduced spending is punished. This is part of what just happened at the midterms: one party proposed cuts to Medicare as part of its health care legislation, and the other energetically demagogued the issue to its advantage. The demagogues won in a big way. The House GOP leadership issued a “pledge” that, if taken seriously, would address no long-term, structural problems and would increase the deficit in the near term. Most voters were probably unaware of the “pledge,” but despite being widely mocked on all sides it certainly did the Republicans no harm on Election Day.

Noonan asks, “Will the American people, over the next few years, act seriously on their own beliefs?” Yes, they will. The trouble is that these beliefs do not include large spending cuts and entitlement reform. Everything Republican leaders have been doing over the last few months tells us that they understand this far better than the people who have become fashionable fiscal conservatives. This is why they put everything controversial off limits in their “Pledge.” Republican politicians know that their constituents will punish them for real fiscal responsibility, but the constituents will reward those politicians who offer them the illusion that they can have it all. This is the same illusion Noonan is offering: you can have lower taxes, which will supposedly force the government to rein in spending, so you can feel as if you are fiscally responsible when you absolutely are not.

Noonan insists that things are different now. We are in a crisis! “It can engender a spirit of unified action and sacrifice.” Maybe it can, but have you seen any evidence of such a spirit? No, you haven’t. Noonan allows that “it will take leadership to make that spirit concrete,” but while she is waiting for this concretized spirit to appear she might do well to notice that none of the leaders in her party has any intention of appealing to a spirit of “unified action and sacrifice.” Over the last month since the election, the leaders of her party have made clear that it wants as little unified action as possible (except to unite in opposition to the administration), and wants to avoid making any sacrifices. After all, why would they want to do that? If they can receive credit for being fiscally responsible when they are not, why risk trading political support to be fiscally responsible in reality?

Noonan then goes on to give Obama some remarkably bad advice:

Barack Obama should startle everyone right now. He will win on New Start. He should confound everyone, and give a headache to his foes, by bowing to the spirit of 2010 and accepting the Bush tax cuts, top to bottom. It would be electrifying. It would seem responsive, and impress the center. And it would help Mr. Obama seem credible, not ideological or partisan but reasonable and moderate, when he weighs in on taxing and spending in the future.

It wouldn’t confound everyone. It would hardly surprise many of us. It would confirm that Obama is so willing to accommodate his political opponents that there is nothing he would not accept if it meant building a consensus. At that point, Obama would have declared to the world that the second half of his term would not be defined by triangulation, but instead by abject capitulation. This wouldn’t impress “the center,” but would thrill his most determined foes and disillusion anyone who still had confidence in his abilities. His credibility on taxes and spending would not be enhanced. In his party, his credibility would be badly damaged if not destroyed, and the other party would not give him credit for coming around to their view, but would instead ridicule him for taking so long to embrace their position.

What doesn’t make much sense is Noonan’s confidence that Obama will prevail on New START. Despite some more positive hints from a few Senate Republicans that they might be willing to consider the treaty this year (and even this is thin gruel), it remains the case that Obama has reached this point through unfailing accommodation and yielding on every demand Kyl has made. Kyl has reasonably concluded that he can keep dragging his feet, and Obama will simply keep giving him more, and the more that Obama insists that the treaty must be ratified the more eager Kyl becomes to extract a larger price. In other words, Obama has been reliably willing to give in on every demand on this issue, and it is partly because of this that the treaty is much more likely to be delayed and to fail than it is to be ratified. DeMint’s wild-card filibuster threats make the treaty’s delay and death that much more likely, and DeMint is the sort that will not be satisfied by any concession that Obama makes.

Advertisement

Comments

The American Conservative Memberships
Become a Member today for a growing stake in the conservative movement.
Join here!
Join here