Meet Washington's New Big Spenders
Republicans are about to win a big victory on a promise of lower taxes and less spending. But if they win, that might not be what voters will get.
Republicans are about to win a big victory in the U.S. midterm elections on a promise of lower taxes and less spending.
Horribly ironically, the vote will likely lead instead to higher taxes and more spending. That’s not what Republican voters want. But based on Republican House Minority Leader John Boehner’s pre-election interviews, it’s what they are likely to get.
Taxes first.
The Bush tax cuts expire at the end of December. When they do, income tax rates jump for virtually everybody who pays income taxes. Capital gains taxes will rise, ditto taxes on estates and corporate dividends.
To renew the tax cuts will require a vote in the House, a vote in the Senate and a signature by the president — in other words, a deal between Democrats and Republicans.
You’d think such a deal would be reachable. But when Boehner has spoken in the past about compromise, he was slapped down by his own followers in Congress. Now Boehner has changed his message. On the Sean Hannity radio show Wednesday, Boehner declared: “This is not a time for compromise.”
The unofficial leader of the House Republicans’ more conservative wing, Indiana’s Mike Pence, said the same thing in a TV interview this week: “There was altogether too much compromise” back in the 1990s.
But no compromise means no tax cut.
The dirty secret of the tax-cut battle is this: President Obama is actually very happy to see the tax cuts expire forever, so long as he does not get the blame. If the Republicans volunteer to look unreasonable, Obama gets the (for him) best of all possible worlds.
The spending trap is even more dangerous.
While Republicans have been campaigning hard against Democratic overspending, they have scored even more points by attacking the one example of Democratic budget-cutting: the reductions in Medicare spending in the Democrats’ health reform.
Boehner has proposed that the first order of business for a new House majority would be a vote to repeal the Obama Medicare cuts. Unlike the tax vote, this vote could actually go somewhere. And even if it somehow fizzles out — if the bill vanishes into the Senate or is shunted aside by the president — Boehner’s proposal signals what is to come:
Republicans are coming to depend more and more heavily on the support of older voters. (Back in 1988, voters over 60 were the most pro-Democratic group in the electorate, now over-65s are by far the most Republican.)
Over-65s also are the group that benefit most from federal spending. More than one-third of the entire federal budget is spent on the two programs for the elderly, Social Security and Medicare.
As Republicans become the party of the elderly, they also find themselves the party of Medicare. George W. Bush hugely expanded Medicare with a new prescription drug benefit back in 2004. Today, 57% of Republicans oppose any reduction in Medicare. But without changes in Medicare, it is impossible to see how the U.S. budget can be brought under control. Medicare is not only enormous: It is also among the fastest-growing of all U.S. domestic programs.
Republicans campaigned in 2010 on four big commitments: lower taxes, higher Medicare, no cuts in defense — and a rapid reduction in the U.S. budget deficit. It’s impossible to see how all four promises can be kept. Individual Republicans have had fun with odd little bits of Democratic over-spending: The number-two House Republican, Eric Cantor, has proposed to eliminate a program that pays travel expenses so descendents of Native Alaskan and Native Hawaiian whalers now living in Massachusetts can visit their ancestral home. That program certainly does sound ridiculous! (President Obama wants to eliminate the program, too.) But really: Federal spending over the next 10 years is projected to exceed $42-trillion. The whaling reunion program? $87-million, or about 0.0002%. What happens to the remaining 99.9998%? If Boehner’s pre-election remarks are an indication — not too much.
I had a conversation a little while ago with a Republican who had served in the House of Representatives for 14 years. He said: “It’s very important in politics to understand why you were elected. I worry that these new guys won’t figure it out until it’s too late.”
Originally published in the National Post.