Pity the poor Democrats. They thought they had discovered
the perfect issue: "fiscal discipline." By draping themselves in the mantle of
fiscal rectitude, Democrats discovered they could oppose tax cuts without
advocating any specific government spending -- thereby avoiding both the
potentially controversial nature of any new outlay and the generic "Big Spender"
label (as in "Democrats who just want to spend the taxpayers' money instead of
letting them have some of it back"). Even better, with the invention of the
"Social Security lockbox" -- which would wall off surplus revenues coming into
the Social Security trust fund from the rest of the budget -- it became possible
to present fiscal discipline as a way of protecting the very popular Social
Security program from "raids" by tax cut-loving Republicans. Fiscal discipline,
it seemed, could be the Democrats' political Holy Grail.
Never mind, of course, that protecting Social Security in this fashion does
nothing to make the program more solvent: The trust fund gets the same government
bonds whether the surplus revenues are spent buying back government debt,
supporting tax cuts, or funding new social programs. Never mind that the solvency
"crisis" of Social Security is itself wildly exaggerated. And never mind that
every dollar directed to the lockbox or to debt reduction is a dollar that cannot
be spent on worthwhile social programs like a prescription-drug benefit or
universal preschool. As a no-big-spenders-here cudgel to be used against
Republican tax cuts -- and as a way of capitalizing on the political popularity
of Social Security -- fiscal discipline's undeniable political benefits proved
simply too seductive for Democrats to resist. Forgoing important social programs
was worthwhile, Democrats calculated, as long as preaching fiscal discipline
continued to benefit the party politically.
But what if it stops doing so? Though there always have been reasons to doubt
the efficacy of the fiscal-discipline strategy as a political mobilizer -- for
one thing, the public typically ranks debt reduction quite low in any list of
policy goals -- there are especially good reasons to doubt its efficacy now.
"This year," wrote Charlie Cook in the January 19 issue of the National
Journal, "the federal budget will be back in the red. And while Democrats
will be mightily trying to blame President Bush and his tax cuts, most Americans
don't seem to be buying that explanation, and don't seem to even care about the
Cook's right. The party has finally succeeded in becoming the undisputed party
of fiscal discipline -- and nobody cares! Circumstances clearly have made their
favorite political strategy outdated -- as mainstream political commentators like
Cook have begun to note -- but the Democrats are in denial. Why else would they
continue to emphasize an issue that has so little political traction? How else to
explain their hysterical attempts to assert the imminent meltdown of Social
Security if the lockbox is discarded and some of that money is actually spent?
It's time for the Democrats to accept that times have changed
and move on. That doesn't mean giving up on Social Security, which is critical,
but it does mean giving up the single-minded focus on fiscal discipline and the
sanctity of the trust fund. Not only are these tactics not working politically,
but they effectively preclude public spending on worthwhile (and popularly
desired) Democratic programs like -- to list just a few examples -- a
prescription-drug benefit, expanded coverage for the uninsured, increased
support for preschool and after-school programs, and universal retirement
accounts. There just isn't enough money to both appear fiscally abstemious and
deliver these programs. Meanwhile, the Republicans haven't let their fiscal
rectitude of yesteryear stand in the way of the spending they like (namely, more
tax cuts). Why should the Democrats?
Here's the important question: Can the Democrats win a fair fight with the
Republicans over what's a better use of the public's money (more spending on
popular programs or more tax cuts)? Easily. Recent poll results show that the
GOP's emphasis on tax cuts is stunningly out of step with the public; ideas for
targeted spending, on the other hand, are well received.
The January NBC/Wall Street Journal poll showed that while 88 percent
of the public favored a proposal to provide prescription drug benefits to senior
citizens and 82 percent favored a proposal to provide assistance to people with
no health insurance, just 41 percent favored a proposal to provide tax cuts to
businesses. A February Pew Research poll showed that 69 percent of respondents
favored more spending on health care and 73 percent favored more spending on
education -- a higher percentage in both cases than the percentage of those
favoring more spending on military defense (60 percent) and even antiterrorism
defenses in the United States (63 percent). Given the current context, that's
What should the Democrats do? Bush's new 10-year budget proposes
to spend an additional $600 billion or so on more tax cuts. These can be opposed
effectively on the grounds that the money could be better spent elsewhere. But
there's no need to stop there; no one should treat the $1.3 trillion in tax cuts
already passed as sacrosanct.
Poll after poll shows that the public is willing to postpone or roll back
some of these already legislated tax cuts if the revenue were used for something
else they find worthwhile (and that's without specifying the likely scenario that
only those with over $130,000 in income would find their tax cuts deferred by
the postponement). A Zogby poll in early February, for example, revealed 71
percent of the public favoring a tax cut rollback if that money were used for a
prescription-drug program for seniors; 69 percent in favor if it were used for
education; and 63 percent in favor if it were used for environmental protection.
Similarly, an Ipsos-Reid poll in mid-February had 76 percent favoring tax cut
postponement to provide prescription drugs for the elderly; 72 percent favoring
it to improve education; and 68 percent favoring it to provide unemployment
benefits to displaced American workers.
It's not even necessary for Democrats to argue against the Bush tax cuts head
on. Rather, the best strategy might be to wait until Republicans object that a
Democratic proposal (say, a fully funded prescription-drug benefit) just can't be
fit into the budget -- and then bring up postponing the tax cut. If the
choice is presented as a Democratic plan to fully fund a prescription-drug
benefit through Medicare versus a Republican plan to fully fund tax cuts for the
affluent, even today's Democrats could easily prevail.
It will be tempting for Democrats just to stay the course. The fiscal
discipline strategy has worked for them before. And the idea of protecting the
Social Security trust fund still polls very well. But the Republicans already
have broken open the lockbox -- it's a fait accompli -- and the public didn't
seem to care. Wouldn't it be better for Democrats to advocate concrete programs
that people want rather than an accounting abstraction? Perhaps the public is
ready for the new tax-and-spend Democrats -- the party of prudent
taxation and targeted spending. Given how well the green-eyeshade approach
is working, it seems worth a try.