Taking its name from a series of antityranny pamphlets published in the early 18th century, the libertarian Cato Institute is the foremost advocate for small-government principles in American life. Its 95 full-time employees, 70 adjunct scholars, 20 fellows, and army of interns work out of an eye-catching cube of glass and steel on Massachusetts Avenue and generated more than $22.4 million in revenues in 2005. And while Cato's millions haven't been enough to elect Atlas Shrugged's John Galt president, they've at least made him heard: The media watchdog group Fairness and Accuracy in Reporting ranks Cato as the fourth most cited think tank in American media, racking up more citations than all its progressive competitors combined.
But despite its media presence -- and, more importantly, despite six years of every branch of government being controlled by the putatively free-market GOP -- all is not well within libertarian land. The state, even under George W. Bush and a Republican Congress, grows ever larger, the entitlement programs ever stronger. And so, in May 2006, Cato Unbound, the think tank's vibrant online journal, solicited essays asking whether “the GOP and limited government have a future together.” The lead respondent, conservative intellectual and former Bush speechwriter David Frum, delivered an answer unnerving to the anxious free-market apostles: No.
Frum is certainly no enemy of small-government conservatism, which, in his book Dead Right, he identified as one of two animating impulses for conservatives (the other being anti-communism). In his essay, however, Frum minced no words about small-government conservatism's record of failure. “Sometimes,” he wrote, “intellectual movements are called to life to save their countries at a time of challenge -- and then gradually fade away as their work is done, as the Whigs faded away in the 1850s or the Progressives after the First World War. It may be that the future of conservatism is to recognize that it belongs to the past.” Today, Frum sighed, “[t]he state is growing again -- and it is pre-programmed to carry on growing. Health spending will rise, pension spending will rise, and taxes will rise. … [T]he day in which we could look to the GOP to have an affirmative small-government vision of its own has I think definitively passed.”
Frum's essay ignited a furor on conservative blogs. Dozens sought desperately to wriggle away from its dispiriting conclusion. Jon Henke, proprietor of the libertarian QandO, admitted that “on the question of the size of government, the Left has indisputably won.” Will Wilkinson, a Cato scholar and the managing editor of Cato Unbound, termed Frum's piece “depressingly convincing.”
I'd go a step farther and call it irresistible. Small-government conservatism is anachronistic, but not because of Newt Gingrich's failures. Rather, three longer-term factors have deprived the ideology of both intellectual legitimacy and popular support: structural changes in the GOP's coalition, accelerating economic insecurity, and the empirical failure of supply-side economics.
Of these factors, the first is the most noteworthy. Through its use of cultural and “values” issues -- and, since September 11, security concerns -- the Republican Party has captured the allegiance of working-class, socially conservative whites and seen its coalition's center of gravity shift from West to South. But recent research shows that these voters, whatever their views on gay marriage, are quite fond of the stability and protection of the entitlement state.
The dilemma for conservatism is obvious: How can a pro-business, pro-tax cut, and anti-entitlement creed such as today's conservatism cater to this constituency without abandoning everything it has believed for 40 years? For much of the old guard, such a radical re-imagining of conservatism may prove impossible. But some younger, less tradition-bound conservative thinkers are sketching out a pro-government philosophy that supports conventionally progressive proposals like wage subsidies and child-tax credits but places them in a new context -- as rear-guard protective actions in defense of the nuclear family. That is, whereas progressives argue for economic justice for a class or classes, these conservatives are arguing for economic favoritism for families, buttressed by government policies that encourage and advantage them as the central structure of American life. It isn't hard to see the potential appeal of that approach, and it could corner Democrats and liberals into being the party of the poor, while the GOP becomes the party of parents.
Evidence for this change in the republican coalition came with the release of the 2005 Pew Typology Survey, a comprehensive polling project conducted by the Pew Research Center for the People and the Press. Pew's political typology studies, conducted in 1987, 1994, 1999, and 2005, sort the electorate into homogenous groups based on values, political beliefs, and party affiliation. The trends are telling: In 1987 and 1994, the Republican Party relied on two groups, Moralists and Enterprisers, the former emphasizing social conservatism, the latter small-government conservatism.
But the 1999 study noticed the emergence of a surprising third group: Populist Republicans. These are low-income and economically insecure Republicans who favor strong government regulation, entitlement aid, and moral enforcement; are largely centered in the South; and attend church regularly. By 2005, this group had solidified into Pro-Government Conservatives, and proven itself more than a momentary statistical artifact. Fully 80 percent of Pro-Government Conservatives believe the government must do more to help the needy, even if it means going into debt. More than 60 percent believe that environmental regulations are worth the cost, 83 percent fear the power corporations have amassed, and 66 percent believe government regulation is necessary to protect the public interest. Most tellingly, only 29 percent report that “paying the bills is not generally a problem,” as opposed to 88 percent of the Social Conservatives (the updated name the study gave the Moralists) and Enterprisers. That financial insecurity, more so than anything else, may explain their unwillingness to see the safety net shredded.
Scott Keeter, director of survey research at Pew, notes “this group really diverges from other [conservative] groups in how government should use its power.” Nevertheless, in 2004, Pro-Government Conservatives remained in the Republican coalition, held there by social conservatism and, more importantly, national security. “When it came down to it,” Keeter says, “people's economic anxieties were not as severe as their security anxieties.”
But with the GOP's national security bona fides lying tattered in Iraq and the American people tiring of war, small-government conservatism represents a sort of ticking time bomb for the right. “If [national security] concerns recede or are replaced by concerns about the endless nature of the Iraq War,” Keeter says, “then these individuals are available to the Democratic Party.”
The Democrats may also gain from the shifting interests of a second group: Social Conservatives. While distinct for the typology's purposes, these voters share the Pro-Government Conservatives' beliefs about regulation and corporate power, with 88 percent fearing Big Business's influence and 58 percent agreeing that regulation is necessary to safeguard the public interest. And large majorities of both Pro-Government Conservatives and Social Conservatives support the government guaranteeing health care (even if it requires raising taxes), raising the minimum wage, and repealing either all or some of the Bush tax cuts. Many of these voters are recent recruits to the GOP, absorbed during the Southern realignment of the past 40 years, during which once-monolithic Democratic control of all levels of government has ceded to a reality in which more than 50 percent of state houses, 60 percent of governor's mansions, 90 percent of the South's senators, and more than 60 percent of their counterparts in the House.
Meanwhile, the traditionally Republican, libertarian interior West is trending blue. Ryan Sager, author of the forthcoming book The Elephant in the Room, has been tracking the cobalt creep. “In 2004,” he writes, “Democrats took over both chambers of the Colorado legislature and sent the Democrat Ken Salazar to the U.S. Senate to replace a retiring Republican, Ben Nighthorse Campbell. … That same year, Montana elected its first Democratic governor in two decades. … Democrats won four out of five statewide offices in that election and also took control of Montana's house and senate. Counting Schweitzer, Democrats now hold the governorships of four of the eight states that make up the interior West; in 2000, they held none.”
Sager, who got the researchers at Pew to break their polling data down by region, found that “the West was the least likely to believe that corporations were keeping you down or people don't have ultimate control over their own destiny. They stand out on all issues as more traditionally libertarian and self-reliant.” Yet this Republican tilt is being overwhelmed by Hispanic immigration into the region and California exiles. These migrant populations have eroded the GOP's hold on this region, and as they wrest the West from the conservative coalition, the territory's libertarian pull on the Republican Party weakens.
At the same time the electoral ground has shifted beneath small-government conservatism, its intellectual and empirical foundations have collapsed. To some degree, this was predicted by the political scientists Lloyd Free and Hadley Cantril in the 1960s. They found that the country is rhetorically conservative and operationally liberal, and so they foresaw that conservative rhetoric would prove potent in campaigns but suicidal in office, leading to a dysfunctional political system in which voters support candidates whose policies they would later reject.
The small-government movement's attempt to square that circle was supply-side economics -- the argument that by cutting taxes the government would spur investment, grow the economy, and thus see an absolute increase in government revenues. But when Ronald Reagan tested the stratagem in office, deficits and not revenues skyrocketed, and inequality shot up. Still, tax cuts remained politically popular, and the small-government crowd devised the so-called “starve-the-beast” strategy -- continue to fight for lower taxes while forcing spending cuts in order to balance the budget.
But a funny thing happened on the way to a small government: Government grew. William Niskanen, Cato's chairman, recently crunched the numbers. He found that over the period 1981 through 2000, “there was a strong negative correlation between the relative level of federal spending and tax revenues. … [F]ederal spending increased by about one-half percent of GDP for each one percentage point decline in the relative level of federal tax revenues.” When taxes are low, voters are happy to green light further spending. And because Congress can deficit spend, legislators focused on the next election -- as opposed to the next generation -- found that they could have their cake and eat it, too. Is it any wonder the government grew fat?
In the states -- 49 of which are statutorily forced to balance their budgets -- deficit spending wasn't an option. So small-government extremist Grover Norquist sought to starve the beast in a more direct manner, extracting antitax pledges from 1,200 of the nation's state office holders and targeting tax raisers for electoral execution. But, as reported in the March 2005 Washington Monthly, Norquist's strategy has begun to implode, with his former allies in the governors' mansions breaking their oaths. Mitch Daniels, Bush's first budget director, was the recipient of Norquist's 2002 “Hero of the American Taxpayer” award. Two years later, he became governor of Indiana, and proposed a 29 percent hike in the income tax for the highest bracket to close a $600 million budget gap. Norquist raged against the betrayal, warning that “Governor Daniels [was] closing Indiana for business” and counseling Americans to “turn to people like [Texas] Governor Rick Perry ... for alternative solutions.” Days later, Perry offered up a tax increase of his own. It had turned out that starving the beast sounded good to voters, but starving the schools didn't.
Speaking to Norquist, I glimpsed the pathological inflexibility aiding his movement's deterioration. After listening to his astute explanation of the challenges faced by an emergent philosophy, I asked whether, in this period of rising economic insecurity, stagnating middle-class incomes, and increased inequality, the conservative movement wouldn't need to evolve. Suddenly, the incisive analyst I'd been speaking to a moment before disappeared, and Norquist collapsed into a robotic recitation of conservative talking points. Asked about risk, he promised growth and “the guarantee that if you earn a dollar, you'll keep a dollar. A guarantee the left won't give you.” But they will guarantee that if you lose a dollar, you won't lose your health care, and that's what the broadest swath of the electorate is actually worried about.
Jared Bernstein, an economist at the Economic Policy Institute, best summarized Norquist's bind: “There's no small-government solution for globalization. There's no small-government solution for force 5 hurricanes. There's no small-government solution to the health care crisis. There's no small-government solution to economic inequality.”
But if small-government conservatism lacks solutions, conservatives who want to keep controlling the government need to find some. And among the movement's intellectual elite, there are stirrings of a search for a somewhat pro-government outlook that counters the liberal prescriptions for economic justice and redistribution with a platform advantaging and protecting the traditional family from the forces that seek to rip it asunder. It's the putative pro-family goals of social conservatism transposed onto the economic realm, and, as Democrats have been telling us for years, they make a lot more sense there. The ideological argument over stay-at-home parenting, after all, is hardly worth having if the mortgage has already decided in favor of double shifts for both parents.
An early template came last November in The Weekly Standard, which featured an article by Ross Douthat and Reihan Salam arguing that the GOP is “an increasingly working-class party, dependent for its power on supermajorities of the white working-class vote, and a party whose constituents are surprisingly comfortable with bad-but-popular liberal ideas like raising the minimum wage, expanding clumsy environmental regulations, or hiking taxes on the wealthy to fund a health-care entitlement.” They identified a new breed of “Sam's Club Republicans” and urged GOP politicians to take the economic fears and anxieties of their constituents seriously. Doing so “would mean matching the culture-war rhetoric of family values with an economic policy that places the two-parent family … at the heart of the GOP agenda.” They even admitted that such a program would “begin with the recognition of a frequent left-wing talking point -- that over the past few decades, returns to capital have escalated while returns to labor have declined, and that the result has been increasing economic insecurity for members of the working and middle classes.”
Imagining a “virtuous cycle in which increased working-class economic security shores up familial stability,” Douthat and Salam suggest a policy platform that sounds more progressive than anything mainstream Democrats are willing to support: Subsidies to stay-at-home parents, pension rules that count child-rearing as labor, serious wage subsidies to low-income single men (who are currently frozen out of many welfare programs), and a tax code that does more to reward work than wealth.
Elsewhere, in the November 7, 2005, issue of The National Review, Ramesh Ponnuru offered a tax plan in the same spirit. Blasting the current tax code for “punish[ing] investment in children,” he proposed a replacement -- a “pro-family” tax code that, among other things, triples the child tax credit while lowering the burden on households with children and raising it on those without. “Some conservatives,” Ponnuru frets, “will say this plan is too progressive.” Having read it, I have trouble seeing how. What Ponnuru actually fears is that some conservatives will notice the plan has a point beyond the relentless lowering of tax rates and shrinking of government -- helping the traditional family survive the current economic moment. It's conservatism with a pro-family, rather than antigovernment, goal.
A shift to a pro-family economic policy would create a more intellectually coherent, and dangerous, opponent than progressivism has faced in decades -- one that could obviate liberal claims to best represent the economic interests of the middle and working class.
Bernstein described a series of focus groups he attended where the apparently antigovernment conservatives in the room revealed a more complex critique of the state, complaining that “when Democrats are in charge, the poor rip the government off, and when Republicans control it, the rich do the thievery, and either way, middle-class folks are left holding the bag. They want a level playing field and the opportunity to achieve their goals.”
That's a more dangerous sentiment than it may first appear. While the Democratic Party has lost elections, its economic vision has continued to triumph, ensuring the preservation of the entitlement state and the continuation of the government's role as guarantor of the safety net. For all their caterwauling to the contrary, Republicans have in practice caved in to a basically progressive conception of the state, preferring instead to take their stands on culture and foreign policy.
Social conservatism, during this period, has acted on its own -- a set of popular moral ideals with no corresponding economic vision. Were the ruin of small-government conservatism to yield to the emergence of pro-family economic conservatism, however, the traditional Democratic critique that moral values are a poor substitute for economic concerns would slam ineffectually into an ideology that fully agreed, and that had in fact united the two. What would be progressivism's rejoinder?
Of course, the intellectual elegance of magazine articles and demographic data will have to face down the demands of big business, the bluster of ideologues, and the vagaries of American politics. As demographic analyst Ruy Teixeira points out, the GOP is not just an empty vessel awaiting the strongest possible ideology, but a collection of special interests and demanding constituencies out to get theirs. So wondering about a progressive change may be “somewhat far-fetched in light of how the current Republican Party is configured,” Teixeira says. “This coalition would have to be really convinced that they had no choice.”
As any Democrat knows, though, even a mild electoral loss can send a party into a deep spiral of self-loathing. If the 2006 elections and the 2008 presidential race don't break well for the GOP, the search for answers will be on. But this isn't about the next election, or even the election after that. Politics is more structural than commonly understood, and parties really see their agendas and directions shaped by the demands of the moment. If the electoral “market” exhibits untapped demand, a savvy politician or desperate party will move to capitalize.
In that way, politics is a game of follow the leader, and among the leaders in coming years will be rising health costs, stagnating wages, and rampant insecurity. The GOP will have to adapt to these realities or it will perish. As of now, their responses have been scattershot, like John McCain's anticorporate populism or Mitt Romney's universal health care plan. Eventually, the impulse for integration and coherence will overwhelm, and the isolated instances of Republican progressivism will be rolled into a whole that can be relabeled “conservative.”
For Democrats, being boxed in as the Party of the Poor while the GOP assumes the mantle of the family is an electoral nightmare. A conservative progressivism primarily for the middle class and discriminating against the underclass, while less just, will be politically potent, promising downscale whites all the benefits of redistribution without all the subsidization of urban blacks. Call it the rise of the Republicrats. Call it a disaster.