Discover more from Sanity Clause
Is Sanity Clause actually going to tackle the debt ceiling mirage and budget politics right here, right now, so early in the process, even though—by my calculation—about 99% of what can be written at this point is idle, finger-twiddling speculation? Am I willing to risk your boredom and scoffery…even if it will offer further proof of this newsletter’s central principle, that cultural issues are closer to the bone and therefore more interesting, and therefore more important, than economic ones?
Yes, indeedy. Budget battles involve massive amounts of baloney-slicing by both parties…and, almost always, a familiar outcome: a deficit-accelerating tax cut (if the Republicans are in control) or a modest tax increase (if the Democrats are). A few domestic programs may be cut, at the margins. But there’s not much money to be found down that rabbit hole, just the conservative fantasy that the undeserving poor are being stiffed. These are fights the Democrats almost always win. People like the budget the way it is, overstuffed with missiles and entitlements, under-nourished by your tax dollars. I’ll offer some basic principles for the skirmishes to come below, but first, via The New York Times, this is the current state of play:
Mr. Biden still sees his position in any fiscal talks, and the public debate around them, as a political winner. In the early months of this year, he demonized Republican plans that included cuts to safety-net programs and forced Mr. McCarthy to make Social Security and Medicare — the two largest drivers of federal spending growth in the years to come — untouchable in the Republican bill.
In a White House memo obtained this week by The New York Times, officials sketch out what they believe Republicans would have to cut in order to satisfy the spending caps in their legislation, while keeping military spending intact. Over a decade, the reductions would include $500 billion for veterans’ health care, $300 billion from scientific and other research and $100 billion from the early childhood education program Head Start.
Okay, here we go:
The House Republicans did something clever this week, voting to raise the debt ceiling—and not to cut social security or medicare. The House GOP’s budget would obliterate Biden’s environmental spending and the various domestic programs listed above by the Times. (Veterans health care? Really?) This will never pass, but it’s a clever opening bid because it undercuts two perennial Democratic arguments: the Republicans just want to shut down the government and (2) the Republicans just want to throw old people onto the street.
Democrats are shameless when it comes to Mediscare—an all-purpose term we can use to describe the demagoguery of entitlement-cut politics. But Biden may have misplayed it this year: he Mediscared the Republicans so effectively in the State of the Union Address, which occasioned great hooting and hollering from the right-wing of the chamber, that they took it off the table. The GOP, led by Donald Trump and now Kevin McCarthy, has made it clear it will absolutely not cut entitlements this year. Biden—and Ron DeSantis, and Paul Ryanish Republicans—have thus been undercut. Mediscare has lost all credibility as a tactic for 2024.
Republican fiscal policy has been a joke since Arthur Laffer drew that Supply Side thingy on the napkin in the late 1970s. You can’t be for tax cuts and also for fiscal responsibility, without also being for entitlement (or military) cuts. Ronald Reagan proved that Laffer was wrong—his income tax cuts did not reduce the deficit by increasing economic growth. In fact, Reagan had to pass a massive tax increase in 1982 to close the monumental deficit he created—and then another in 1984 to save Social Security. (Sanity Clause is nostalgic for the days when statesmen like Daniel Patrick Moynihan and Bob Dole ran the Senate Finance Committee, and trusted each other to find honest compromises.)
Let me amend that: Republican fiscal policy has also been a matter of rank hypocrisy since the Laffer Curve was posited. As Dick Cheney once said, “Reagan proved that deficits don’t matter.” He might have been right, or perhaps not; who really knows? (Ask any three economists; you’ll get four opinions.) Republicans certainly act as if deficits don’t matter, except when Democrats are in office. Then they suddenly grow frantic over “wasteful government spending.” They aren’t referring to the Pentagon’s search for a perfect toilet seat or the Iowa ethanol scam. They’re really saying: the Democrats want to tax you and give money to black and brown people. (Again, economics is a hidden race issue…or, at least, it is played that way when Democrats are in power.)
The Republicans have a point. Check out the $100 billion cut proposed for Head Start. Oh my God, how soulless! It will be said. Suffer the little children! Except that Head Start doesn’t work very well. It is, as a high-ranking member of the Obama Administration once told me, “a jobs program.” As opposed to an education program. If Democrats want to spend billions on stuff like this—and the research suggests that well-run early education programs can work even if badly-run programs like Head Start don’t—they should devote a lot more time and energy to making them effective rather than their usual, eternal effort to outspend their own incompetence. (Again, anti-poverty programs are a drop in the federal bucket compared to the military or entitlements.)
Tax increases don’t hurt the economy. Reagan’s tax increases didn’t. Nor did George H.W. Bush’s, nor Obama’s, nor Biden’s. Bill Clinton’s actually helped create the boom of the 1990s by convincing Wall Street that he cared about deficits. Even FDR’s confiscatory 90% income tax rate helped win World War II, end the Depression (with lots of war industry jobs) and set the stage for the boom that followed. As a general principle, Sanity Clause supports two kinds of tax increases: (1) anything that reduces the difference in rates paid by wage earners and investors (i.e. higher capital gains taxes) and (2) a small tax on massive transactions of exotic financial instruments (the kind that caused the crash of 2008). Tax policy should discourage financial casino games; it should promote the growth of actual enterprise.
Finally, no matter how annoying the next few months of budget negotiations will seem, some perspective is useful: this battle is actually older than the Republic. It was the dispute that made the U.S. Constitution necessary. As historian Joseph Ellis points out in The Cause, his latest—and, as usual, excellent—book about the American Revolution: even in victory, most Americans had a better sense of who the enemy had been—the King—than who or what they were. George Washington was infuriated by the Congress’s refusal to pay his troops or grant them pensions. The very idea of a national army—as opposed to “well-armed” local militias—was controversial; the idea of a nation, rather than 13 different whatevers, was dodgy, too. Our ancestors were natural libertarians; governments were by definition oppressive: “pluribus,” Ellis writes, was more plausible than “unum.”
Their experience of the war had occurred within their local communities…their political horizons did not extend beyond a day’s walking distance. If perchance they had encountered Hamilton’s quite brilliant idea that the absence of a national ethos rendered a more robust federal government even more essential, it would have struck them as incomprehensible…Their insistence that any powerful federal government was a betrayal of the original understanding of The [revolutionary] Cause contained more than a kernel of truth. And their conspiratorial posture toward any form of consolidated power…had played a significant role in mobilizing popular opinion against Great Britain…As a result, The Cause contained a double-barreled legacy: government was “Them” and government was “Us.” The dialogue between those two competing legacies of the founding became, and still remains, the great debate in American political history.
If Washington and Hamilton and Madison hadn’t won that debate, we wouldn’t have a country. It’s good to remember, in populist times like these, that significant numbers of “Americans” never wanted one in the first place. It’s an ongoing battle.
Flavors of the Week
Several members of the Sanity Clause Oracular Hall of Elders—namely Mark Halperin, John Ellis, George Will and Andrew Sullivan—are touting the candidacy of Robert F. Kennedy Jr. and/or Tucker Carlson and/or the No Labels effort to get a third party on the ballot in all 50 states. These are top-of-the-list political thinkers; I am a humble paid subscriber to their newsletters and you should be, too. But, I must protest! This is an act of transcendent, year-before, nothing-happening-right-now boredom. Sullivan is candid about that: “The thought of a Trump-Biden rematch is soul-deadening and mind-numbing to me and others.” Yeah, but the thought of an authoritarian, illiberal America is worse. Anything that helps Donald Trump is, by definition, bad for democracy. You don’t want to play with that sort of fire, Andrew. But Ellis argues, persuasively, that the Kennedy candidacy could be consequential: it could help Trump by weakening Biden:
The fact that [Kennedy] won’t be the 2024 Democratic presidential nominee does not mean he won’t have a significant impact on the 2024 presidential campaign. Ask Lyndon Johnson if Sen. Gene McCarthy had any chance of being the Democratic presidential nominee in 1968. Ask George H.W. Bush if Pat Buchanan had any chance of being the Republican presidential nominee in 1992. Neither McCarthy nor Buchanan had a realistic chance of being their respective parties’ nominees. Both men had a measurable impact on the outcome of the general elections in 1968 and 1992.
McCarthy and Buchanan were “messengers.” The “establishment” reaction to their candidacies was “shoot the messenger.” But they persisted, and subsisted, because they gave voice to discontent. That’s what some candidates become, sometimes. They become vehicles of discontent.
As a vehicle of discontent, you could do worse than Robert F. Kennedy Jr.
Kennedy certainly gives voice to the always-feverish environmental, conspiratorial, isolationist, anti-vax populist nutters in the Democratic Party. He certainly will be more “fun” to watch than Biden. And catnip to political writers and other thrill-seeking political junkies. And therefore dangerous. As George W. Bush once said, “You may think Bill Clinton beat my dad. He didn’t. Pat Buchanan beat my dad.”
Tucker Carlson is another story. Ellis thinks he may have a (very long) shot if he runs for President. I agree…and while a Carlson candidacy would draw from the same cesspool as Trump, and might cut the demagogue’s strength, he may be more dangerous than Trump because he is so good at TV.
It is not impossible that the populist supporters of a candidate like Carlson (or Trump, or the ghost of Ross Perot) could hijack the third-party route now being prepared by No Labels. This is a particularly sad development for members of the Sanity Caucus: Yes, we love the moderating force No Labels can be in the Congress—however minimal their efforts have been so far—and we’d love to see a moderate third party…in principle. Someday. But any sort of third party would take votes from Biden in 2024 and strengthen the forces of illiberal authoritarianism. We can’t take that risk right now. (And yes, I fear Biden is too old—but, however doddering, he remains the sanest alternative in 2024 at this point.)
A Kennedy v. Carlson race, however implausible, is not unthinkable. Nor is a three-way race. Nothing is unthinkable in American politics right now…which was just the sort of thing that George Washington and Alexander Hamilton and James Monroe were most worried about—that there wasn’t enough seriousness and perspective and discipline in the land to sustain a nation.
If you’re not yet a member of the Sanity Caucus, shame on you and push this butto:
If you have a friend who might enjoy this, send them a free subscription: