January 7, 2011

Republican myopia

GOP proposals emphasize short-term political gains, not solving nation’s problems

After the Republican electoral victories last November, many have commented on the new vitality of an American right that appears to have avoided the exile to political wilderness that seemed to be in store for it after the 2008 Democratic landslide. This energy is claimed to flow from an eagerness to respond to public anger about our government’s indebtedness and to restore fiscal sanity. A look at the seemingly obscure issue of accounting rules in the House of Representatives, however, shows that this view is largely misguided. The new Republican majority has recently made two changes to those rules that reflect a lack of genuine interest in restoring fiscal responsibility or in pursuing virtually any other public policy goal. Both changes involved departures from the pay-as-you-go (PAYGO) rules that both houses have recognized (but often neglected to follow) for the past four years, which mandate that any measure which adds to the federal deficit must be offset by either spending increases or tax cuts.

The GOP’s weak commitment to fiscal responsibility is most evident from a change in the rules that exempts all tax cuts from PAYGO requirements; the increase in the deficit which results when Congress reduces federal revenues while keeping spending constant does not need to be offset in any way. The right would presumably respond to this claim by asserting that tax cuts can potentially increase the total amount of federal revenue because they increase the rewards attached to hard work, and therefore give people incentives to work more. While there is some truth to this logic, it applies only when tax rates are relatively high. Currently, there is widespread agreement amongst economists that tax rates in the contemporary United States are not high enough for tax cuts to increase revenue.

In fact, the new rule governing tax cuts is likely to make it harder for the Republicans to achieve what is presumably one of their main aims: avoiding disruption of the economy through sudden tax increases. This is because, as the great libertarian economist (and University of Chicago icon) Milton Friedman often pointed out, a tax cut without offsetting spending cuts is just a deferred tax increase. Any debt the federal government incurs must eventually be paid off, and if spending is not reduced in order to pay for increases in the deficit caused by tax cuts, then taxes must be increased. Given the political difficulty of raising taxes, the increases necessary are likely to be postponed until the last possible moment and then suddenly enacted, which will probably damage our economy more than moderately higher rates in the present. In light of the inconsistency between this change and the Republicans’ professed interest in fiscal responsibility, it seems likely that the change is meant largely to enhance the party’s political prospects by making it easier to give voters free money. It therefore demonstrates just how little genuine energy or enthusiasm the party has.

The second change demonstrates even more powerfully that the GOP lacks the sort of vitality necessary to be politically viable over time: It posits that any increase in spending can only be paid for by a reduction in spending elsewhere in the federal budget. This measure is clearly designed to make it as difficult as possible to increase spending since, as conservatives rarely tire of noting, government programs tend to create their own constituencies and therefore existing programs will all have lobbies trying to prevent cuts while proposed programs will have none. Therefore, the Republicans’ decision to enact this new rule suggests that they have no positive agenda of any kind: They want to roll back President Obama’s expansions of government but have no plans to use government power more constructively to address the problems his new programs are designed to solve. This indicates unresponsiveness to the concerns the American people actually have which, if not fixed, could again consign Republicans to the political irrelevance which loomed after their losses in 2008. While many Americans resent overly large and intrusive government, they do expect the state to play an active role in addressing their economic anxieties, and a party which cannot speak to those anxieties has no political future.

The overarching problem which both changes reflect is a lack of seriousness about governance. House Republicans prefer politically advantageous posturing to real deficit reduction, and a purist rejection of all spending increases to concrete efforts to make government programs less wasteful and more effective. Until the Republicans are willing to present a governing agenda that has both political viability and some plausible connection to its aims, they will not be able to restore their competitiveness in a sustainable way, and the continuing impoverishment of the national debate that will result will hurt all Americans.

Ajay Ravichandran is a third-year in the College majoring in philosophy.