The Bush Bankruptcy Plan

We are used to politicians moderating their programs once in office. But George W. Bush has done the opposite, ratcheting up his plans to the applause of conservatives while much of the public still doesn't grasp the radical implications of what's under way. Nowhere is this more evident than in the president's fiscal policy.

During the 2000 election, Bush's proposed tax cuts appeared reasonable to many voters only because the federal government seemed to have plenty of money to spare, thanks to the fiscal turnaround of the Clinton years. Then in the past year, with the economy slumping, the administration has sold another round of cuts as a timely stimulus for renewed growth despite soaring deficits. Whatever the size of the package finally approved by Congress this year, these cuts will not be the end. The White House is already thinking about another round and, according to The Washington Post, plans to cut taxes every year Bush is in office.

Republican members of Congress, who in the mid-1990s were pushing a constitutional amendment to require balanced budgets, have learned to stop worrying and love fiscal bombs. Even their own Congressional Budget Office forecasts that the tax cuts they're about to pass will produce ballooning deficits. And with the aging of the baby-boom population, the federal government faces predictable increases in Medicare and other obligations that it cannot possibly meet with the reduced tax levels the Bush policies would leave behind.

The underlying strategy here is all too familiar: Instead of challenging popular liberal programs directly, the Republicans are creating fiscal conditions that make those programs unsustainable. In 1981 the Reagan administration slashed taxes, deliberately intending -- as Ronald Reagan's budget director, David Stockman, later disclosed -- to starve the federal government of funds, force reductions in domestic spending and keep new liberal initiatives off the agenda. Republicans dominated national policy for a decade as a result. That the tax cuts plunged the country into a fiscal disaster was merely a side effect of a policy that conservatives continue to hold up as a model of presidential leadership.

It was a Democratic Congress that began to rectify the problem, forcing the elder George Bush in 1990 to accept a tax increase in a concession on his part to fiscal prudence widely thought on the right to be an unforgivable blunder. Bill Clinton followed the same politically thankless path, raising taxes and cutting expenditures in 1993 in the interests of long-term budget balance and suffering the consequences in the 1994 congressional elections. It took us a decade to work our way out of the fiscal hangover of the Reagan years -- and here we are again, not so much with Bush II as with Reagan II, as the Republicans once again cut taxes while sharply raising military expenditures.

The patterns of contemporary history only slowly come into focus, but on the evidence of the past quarter-century we have the makings of a new cycle in American politics in which Republican revolutions alternate with Democratic restorations. In the first phase, Republicans gain control of the national agenda through tax cuts that drain the Treasury. Then, trying to prepare the ground for new initiatives, Democrats enact responsible tax increases that hurt their own popularity, leaving them unable to carry out their positive agenda and setting the stage for a fresh round of tax cuts.

It's a great script for Republicans. They get to play Santa Claus while Democrats get to play Scrooge. Ultimately the Republican strategy unravels, as no government can keep cutting taxes and raising military spending indefinitely. But by the time the Republicans lose an election, there's no money to spend, and conservative policies are effectively locked in. So what should Democrats do?

Reframe the choices. While the Republicans' conservative base loves tax cuts, the electorate isn't asking for them now. According to the most recent Washington Post-ABC News Poll, the public prefers increases in domestic spending to tax cuts by a margin of 67 percent to 29 percent. The Democrats need to frame their criticism of the cuts as a positive case for their own priorities, not so much by dealing with the issues in the abstract as by spelling out how they would redirect specific cuts into specific programs that voters care about.

Connect the dots. As the Republicans cut taxes on corporate dividends of all things, the states are laying off school teachers, slashing health care for the poor and retrenching on other programs. The federal government, as in previous slumps, could be helping the states cope with their growing burdens, but by imposing new requirements on the states without providing the revenue to cover the costs, Bush has aggravated the problem. The Democrats need to hold the president accountable for the crisis unfolding beneath him.

Rewrite the script. The Republican Party has cast itself as the nation's protector as well as Santa Claus, but the same cuts in taxes that imperil popular social programs also imperil the nation's health, safety and security. Americans want a government strong enough to protect them, and the Democrats need to make clear what ought to be obvious: A bankrupt government cannot deliver that protection.

Bush will get a big tax package this year, but if the Democrats draw the right lessons, they may still be able to hang the Republicans with it.

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