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Exchequer

NRO’s eye on debt and deficits . . . by Kevin D. Williamson.

Real Tax Cuts, Real Spending Cuts



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Republicans have rotten luck when it comes to timing. Think about the miracle of the “Clinton economy” — Slick Willy took credit for a recovery that was under way well before he was elected and then evaded blame for a recession that began in the final months of his presidency, while two different Republicans, both named Bush, caught absolute hell.

In another case of bad timing, it’s a little bit unfortunate that when the Republicans finally summoned the testicular fortitude to start making a ruckus about spending, they ended up with an extension of unemployment benefits as the nearest issue at hand. For spending hawks, unemployment benefits probably aren’t the highest-value hill to die on. In fact, unemployment benefits are one of the better social safety-net programs we have in the United States. They’re not terribly expensive, in real terms; they reward work; and they have the happy effect of encouraging a dynamic labor market and supporting risk-takers who seek better lives in new jobs. Think about how much harder it would be for a scrappy, underfunded startup to attract good talent from well-established competitors if those workers didn’t know they had unemployment benefits as an emergency backup. Granted, our unemployment-benefit system is not especially well-run and could stand to be improved in a dozen ways — but, compared to Medicaid, student loans, farm subsidies, or a thousand other federal welfare programs, unemployment benefits are a pretty solid deal. (Though not as solid as they’d be if they were a privately run tax-free hybrid insurance/annuity that you begin paying into from your first job and can roll over into your retirement if you don’t tap into it before then. Feel free to pick that idea up and run with it, John Boehner. There’s more where that came from.)

Predictably, the Democrats are howling that the Republicans hate unemployed people and don’t really care about the deficit, that’s it’s all just a political charade. Of course it’s a political charade — but just a political charade? The Democrats’ go-to spokesman, Anonymous Aide, is challenging the GOP to show the same puritanical budgetary resolve when it comes to re-upping the Bush tax cuts, telling The Hill: “I will be curious to see if their newfound fiscal religion that everything must be paid for is something they stick to as long as debt and deficits are a problem. Or is [this] just an election-eve conversion [that] will be dropped as soon as convenient?” (Shame on The Hill, incidentally: Nothing in this cheap, substance-free quotation rises to the level of justifying anonymity. Seriously: Democratic aide talks smack about Republicans and he’s an anonymous source? Rent some self-respect.)

Embedded in Anonymous Aide’s line of attack is a familiar assumption, an article of faith, really, for Democrats: Tax Cuts = Spending. If what we really care about is the bottom line, the argument goes, then isn’t cutting revenue functionally the same thing as increasing spending? It is tempting to dismiss this as a high-school debaters’ trick, a flimsy and facile bit of see-through rhetoric. But never underestimate the Left’s ability to misunderstand (or simply ignore) conservative thinking. Of course conservatives care about something other than the bottom line: Conservatives want both fiscal responsibility and a state that is limited in size and scope, so as to preserve the private sphere of life and citizens’ individual liberties.

Liberals kinda-sorta want the same thing, but you’ll rarely get them to admit it. One of the head-clutchingest things ever written about American politics is this gem, from Jonathan Chait of The New Republic: “If you have no particular a priori preference about the size of government and care only about tangible outcomes, then liberalism’s aversion to dogma makes it superior as a practical governing philosophy.” Now, wipe that incredulous smirk off your face — liberalism’s aversion to dogma, indeed — and consider what it would mean to have “no a priori preference about the size of government.” Surely even the open-minded, dogma-shunning liberals over at The New Republic have an a priori preference that the size of government not equal 100 percent of GDP, or 500 percent of GDP. I’m pretty sure the non-ideologues in the sovereign-debt markets have a robust a priori preference that U.S. government spending not exceed GDP. Arguments over the size and reach of government are partly moral and ideological, but they are not exclusively moral and ideological. Reality intervenes. And reality is the friend of conservatism.

If congressional Republicans are going to argue for a balanced budget (or a less-unbalanced budget) and tax cuts, they are going to have to make — once again, whipping it up from scratch — the case for a limited central government. Americans are fairly receptive to that argument at the moment, but not as eager as some of my fellow conservatives would like to believe: Cut Social Security checks by 20 percent and that limited-government tea-party mob will be the one that comes around to tar and feather your sorry congressional hide. But the case can be made.

And while making the case, Republicans in Congress are going to have to make something else: a big list of things they are actually willing to cut. Otherwise, they will be refusing to recognize the reality in which they should be grounded, and they’ll be confirming Anonymous Aide’s cynical worldview. Instead, Republicans would do well to beat the Democrats at their own game: Offer Nancy Pelosi the extension of unemployment benefits — so long as she produces dollar-for-dollar cuts elsewhere in the budget. And then fight to extend the Bush tax cuts — with dollar-for-dollar spending cuts to match. Steny Hoyer’s out there saying that Democrats are going to be left with no choice but to raise taxes on the middle class, Obama’s campaign promise be damned. No choice? Republicans should give him some options.

– Kevin D. Williamson is deputy managing editor of National Review.


Tags: Balanced Budget , Taxes


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