Armed with Austerity

ISSUE 32 : FEBRUARY 2013

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More than 25 years ago, the late Rep. Jack Kemp told me, “In the past, the left had a thesis—spending, redistribution of wealth and deficits. Republicans were the antithesis— spending is bad.’’

The man who became the Republican nominee for vice president in 1996 went on to say, “Ronald Reagan represented a breakthrough for our party. We could talk about lower taxes and more growth. We didn’t have to spend all our time preaching austerity and spending cuts. The question now is, do we take our thesis and move it further, or do we revert to an antispending party?”

We now have the answer: Republicans have reverted to an anti-spending party. Their latest cause? Austerity. Their argument? A shrinking economy is better than big government.

President Obama tried to call the Republicans’ bluff in his State of the Union speech. “Deficit reduction alone is not an economic plan,” the President said. He didn’t come out against deficit reduction. He said it should not be given a higher priority than economic growth. There are many reasons why it is important to reduce the national debt, but short-term economic growth is not one of them.

There’s little argument that the impending sequesters—across-the-board government spending cuts scheduled to begin March 1— will slow the nation’s economic growth. In fact, it’s already happening. The nation’s economy shrank in the last quarter of 2012. Economists attribute it to cutbacks in defense spending in anticipation of the sequesters. More cutbacks will give us exactly what the country doesn’t need right now— austerity. “The American people don’t believe in these austere things,” Senate majority leader Harry Reid (D-Nev.) said.

Among the austere things would be an additional million Americans thrown out of work. “There is no reason that the jobs of thousands of Americans who work in national security or education or clean energy—not to mention the growth of the entire economy—should be put in jeopardy,” Obama said.

Yes there is, Republicans say. It’s to makea point: we have to shrink government. If that means some economic pain, well, “No pain no gain,” as they say in sports.

Republicans are gambling that voters will take the spending cuts in stride. Then Republicans can say, “See? We can live with smaller government.” The financial markets have already absorbed the spending cuts and are hitting record highs. Safety net programs like social security and Medicare are protected from the cuts. Taxes are not going up. Americans who live in areas hard hit by spending cuts—near military bases, for instance—are likely to squawk. But Republicans think they can blame the President. He’s in charge, isn’t he? Why didn’t he do something to stop us? Sen. James Inhofe, the ranking Republican on the Senate Armed Services Committee, called the military situation “desperate” but then added, “It’s not desperate enough to raise taxes.”

Democrats believe this will be like the government shutdown in 1995, which discredited the Republican Congress and helped get President Clinton re-elected. It’s not likely to be that dramatic—at first—because the cuts will not occur all at once. But there is another looming deadline at the end of March when the federal government really could shut down if Congress doesn’t pass a budget. Tea Party Republicans are willing to take that risk. They want to make the point that government spending has gotten so out of control that extreme actions must be taken to cut it back. Most of them weren’t in Congress in 1995.

President Obama learned something in his first term. He learned from bitter experience— notably the debt ceiling episode in 2011— that you can’t make deals with Tea Party Republicans. As a White House adviser told the Financial Times, “You can’t be reasonable with unreasonable people.” How unreasonable? In the January Pew poll, 59% of Democrats and 53% of Independents said “I like elected officials who make compromises with people they disagree with.” Only 36% of Republicans felt the same way.

The President is taking his case directly to the American people, rallying supporters around the country and keeping his 2012 campaign operation going. He’s making the case for government, something he started doing in his second inaugural address and in his State of the Union speech. That government should not just keep the economy growing but also fix problems that the market can’t solve, like increasing economic inequality and declining competitiveness of U.S. workers.

Republicans believe that if they keep Congress fixated on an unending fiscal crisis—first the sequesters, then the federal budget, later the debt ceiling—they won’t have to pay any attention to the programs President Obama proposed in his State of the Union speech. Like raising the minimum wage to lessen inequality. And universal preschool to help make American workers more competitive. Republicans believe they can just run out the clock.

They think they have President Obama over a barrel by forcing him to defend big government. They thought the same thing during the campaign last summer when President Obama said, “If you’ve got a business, you didn’t build that.” Meaning, government played a role in making your business profitable. Republicans tried to turn Obama’s comment into the central meme of their campaign. Delegates at the Tampa Republican convention carried signs saying, “We built it!” They chanted “We built it!” on the convention floor. “You didn’t build that” was supposed to be the equivalent of Mitt Romney’s “47%” gaffe.

But guess what? Obama won.

Inside Politics with Bill Schneider is published by Third Way. Visit us at www.thirdway.org. © 2013 Third Way.IS

Date: 2015-12-24; view: 688