Politics & Policy

Who’s in Control?

The Jeffords jump is not a seismic shift.

Contrary to the media spin, the Jim Jeffords move to become an independent who will caucus with the Senate Democrats is not nearly the seismic and tectonic shift most commentators would have us believe.

#ad#The fact is, the GOP still controls the House. One would think this is not a small fact, but wave after wave of punditry insists on ignoring it. Indeed, what has bothered me most about the coverage is the numerous commentators who assert that the Jeffords move results in Congress changing hands. But this is factually wrong.

Just as was the case yesterday, the Jeffords announcement today leaves Speaker Dennis Hastert and Majority Leader Dick Armey still at their leadership posts. And of course, along with the House, the GOP still controls the White House. So, with the benefit of simple arithmetic, two out of the three houses are in Republican hands.

Now, while it may be true that operationally the Senate moves into Democratic hands — which may in fact slow or “moderate” some of President Bush’s proposals — there’s surely no seismic shift here either. After all, the so-called GOP Senate was barely so. It was 50-50, or 51-50 counting Veep Cheney, but committees and their staffs were evenly divided between Democrats and Republicans — this because of an early-year deal between Trent Lott and Tom Daschle.

The reason George Bush got his across-the-board tax-cut bill passed in the Senate was not because the upper house was run by the GOP, but rather because of Democratic votes: 15 on the original tax-cut floor vote, then five on the budget resolution, then 12 in the final Senate vote Wednesday.

It could be argued that the tax-cut coalition of Democrats and Republicans now governing the Senate is more “moderate” than the House, which is indeed more conservative than the Senate. But in truth, this point should acknowledge that it’s only a moderate form of moderation.

A truly seismic political shift occurred in 1994 when the GOP handily won both houses of Congress for the first time in forty years. This forced President Clinton to abandon tax hikes and nationalized medicine, and over the next four years his political strategy moved decisively to the right.

Ironically, as Clinton’s coloration shifted from liberal Democrat to moderate Republican, a number of market-oriented measures were passed and signed into law. The economy prospered mightily as capital-gains taxes were cut, welfare reform enacted, and a balanced-budget passed without government shutdowns. All this was truly seismic. It got Clinton reelected, saving him from himself.

Contrast this with the 1960s and 1970s. Under LBJ and Jimmy Carter, Democrats controlled all three houses. During Nixon and Ford, the Democrats controlled both congressional houses. The economy suffered enormously from stagflation and high unemployment during those years, as social, economic, and defense policies were driven by liberal nostrums that badly failed. Republicans Nixon and Ford were continuously pulled to the left by relentlessly partisan liberal-Democrat congressional majorities. The nation suffered enormously.

Reagan’s 1980 landslide changed all that as his coattails swept Republicans to power in the Senate, though not the House. This was truly seismic change. White House and Senate control brought reform legislation on tax cuts, deregulation, and the defense buildup. Economic growth recovered, and the Soviet downfall was hastened.

The Democrats returned to two-house power in 1986 when they held the House and recaptured the Senate. Once again, liberal policies ascended as George Mitchell rode roughshod over late Reagan, all of Bush Sr., and early Clinton. Not surprisingly, economic and stock-market performance faltered during this 1987-to-1994 liberal revival.

Today, while it may be true that the Daschle Democrats will take over the operations of the Senate, there is no pronounced move to the left. The population of the Senate is the same 100 people today as it was yesterday — though the party mix has changed slightly.

Nevertheless, a conservative coalition of Bush Republicans and Southern and Western Democrats will continue to govern the upper chamber, just as it did on the tax-cut bill. Look for the same group, give or take a few, to generate legislation on expanded energy production, defense increases, pro-market health care and Social Security reforms, and other issues. Along with the Republican House, and the Republican president, this Senate coalition will continue free-enterprise and market-oriented policies that will revive prosperity at home and security-improving toughness abroad.

The liberal Tom Daschle did not control the Democratic caucus yesterday, and he will not dominate it today. Internet economy and investor-class voters favor ownership and entrepreneurship, not government planning.

Notwithstanding the minor historical footnote that is Jim Jeffords, the heyday of failed liberalism ended thirty years ago. Fortunately, there is no liberal recovery in sight.

Larry Kudlow — Larry Kudlow is CNBC’s senior contributor. His new book is JFK and the Reagan Revolution: A Secret History of American Prosperity, written with Brian Domitrovic.

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