For Fiscal Conservatives, Losing May Be Liberating
Wednesday, November 29, 2006
All Republicans had a lousy November. For fiscal conservatives, the gloom only started on Election Day, when the GOP lost control of Congress.
Conservative candidates suffered humiliating losses in the House GOP leadership elections. Democrats threatened to govern from the center, turning conservatives into a minority of the minority. Milton Friedman, the patron saint of free-market economics, died on Nov. 16. Just yesterday, Sen. Charles E. Schumer (D-N.Y.) declared to the New York Daily News editorial board that "Reaganomics is dead."
But does that make the glass half empty, or half full?
In Congress, the minority life is mostly talk and little action, and yet for advocates of minimal spending and low taxes, that may not turn out to be so bad. It's easier to promote fiscal discipline in theory than to practice it as a party leader or committee chairman. Remember that $200 million-plus "Bridge to Nowhere" in Alaska? It still makes conservatives cringe.
"Now that Republicans are in the opposition, they're going to be the most saintly budget hawks you can imagine," said American Enterprise Institute economist Kevin A. Hassett. With the absence of power, he notes, comes the absence of accountability and blame. As Hassett put it, "being in the minority means never having to say you're sorry."
Fiscal conservatives started to agitate days after the election, when the Republican-led 109th Congress reconvened to wrap up unfinished business. At the top of the to-do list: nine remaining spending bills for the fiscal year that started Oct. 1.
Few Republicans returned to Washington expecting to complete all the outstanding bills. But many wanted to pass at least a few, if only to show that the GOP wasn't abrogating its governing duties. But several fiscal conservatives in the Senate saw an opportunity to take a stand against "earmarks," the special projects that members from both parties had tucked inside the bills. The rebels announced their intention to block all spending bills from advancing -- even one that financed veterans benefits and military housing.
"We need to examine the bills in the light of the last election, in which I think the American people were unhappy with our spending habits," Sen. Jeff Sessions (R-Ala.) explained to reporters. He and his allies, including Sen. Jim DeMint (R-S.C.) and Sen. Tom Coburn (R-Okla.), want Congress to pass a "continuing resolution" to extend funding from the previous fiscal year. "We'd save the taxpayers a lot of money," Sessions said.
Their quest has reinvigorated fiscal conservative groups such as the Club for Growth, which suffered several major election defeats this year. "The Senate showdown on earmarks is next week," the club's blog reported yesterday. "The good guys, Tom Coburn and Jim DeMint, are battling the appropriators and the big spenders." The article warned, though, that the continuing resolution "isn't a done deal."
A chief target of the budget hawks is a group of Democratic House freshmen who won seats in conservative districts, including the Florida seat that was held by disgraced Rep. Mark Foley, and Tom DeLay's former seat in Texas. Republicans call these "rented seats" and hope to win them back in 2008.
"Democrats aren't going to want to make massive cuts," said Stuart Roy, a longtime senior Republican House aide who works as a public-affairs consultant. Back in the GOP-minority days of the 1980s, House Republicans sought to force Democrats to vote against small spending reductions, often fractions of a percent. But as Roy pointed out, these little-noticed maneuvers helped Republicans build a case that Democrats' spending habits had spiraled out of control.
"Spending cuts resonate in a macro sense, especially if you can show they are tied specifically to waste," he said.
The trick, Roy added, is to avoid programs that happen to be popular, such as public television funding. "There will be a substantial number of people who will want to go out and do that." That impulse should be resisted: "This is not a governing strategy, it is a minority strategy."
Another enticing realm is taxes. In the 110th Congress, fiscal conservatives will act as chief defenders of the numerous temporary tax cuts that Republicans have passed since President Bush took office. Breaks that benefit wealthy individuals are particularly unpopular with Democrats, but particularly cherished by fiscal conservatives, who believe low tax rates at the top of the economic ladder fuel growth.
The first showdown will come over the alternative minimum tax, which Democrats have vowed to address early in their tenure. Adjusting the tax so that it will not envelop another 20 million or so middle-class families will cost $50 billion-plus per year, official estimates show. The incoming House Ways and Means chairman, Rep. Charles B. Rangel (D-N.Y.), has vowed to pay for the fix, but that could be politically difficult.
"Rangel is going to need a really large tax increase to keep his promise," wrote Bruce Bartlett, a conservative economist, anticipating the Democratic dilemma with glee.