Politics & Policy

The Two-Percent Solution

Taking a saber to Leviathan.

While the spirit of compromise still stirs the nation’s capital, while children dream new dreams that they may one day cut a side deal in the corridors of power, while the media treats John McCain as the only Jedi capable of saving our republic, let us turn to something worth cutting a deal over: The bloated, sweaty, belching, Jabba-the-Hut-like size of the federal government and the acrid flatulence it creates that we call the “deficit.”

I hate writing columns about cutting government because it feels so pointless, like writing about how bears shouldn’t be using the nation’s forests as toilets. The American people have grown cozy with the idea of a federal government which has grown far beyond anything imaginable even a few decades ago. Did you know–and I am not making this up–that in the 1980s, Nancy Reagan’s White House staff was larger than FDR’s at the height of World War II?

But this is a new moment. The Senate deal over judges has caused a herpes-like outbreak of consensus-philia along the Potomac. The lamb will vote for cloture with the lion. Lex Luthor and Superman have signed a Memorandum of Understanding.

So perhaps now is the time to get serious about taking something more than a dull pocketknife to the mountain range of fatback running along the spine of Leviathan.

The problem so far has been, simply, politicians like spending other people’s money. As one wag put in the 1980s, “Today, wanting someone else’s money is called ‘need,’ wanting to keep your own money is called ‘greed,’ and ‘compassion’ is when politicians arrange the transfer.” Nothing could be more true of life today under Big Government Conservatism.

In Bush’s first term, he spent money like a pimp with only a week to live. He had some good excuses. He had inherited a crashing economy, and the war on terror wasn’t exactly factored into his budget forecasts. But enough’s enough. For the first time since World War II, federal spending per household is $20,000. And more people work for the federal government than at any time since then end of the Cold War.

Bush’s people are making the right noises these days and they seem–seem!–to be taking spending just a bit more seriously. Unfortunately, Bush lost some credibility in his first term. And, to be fair, he was never a small-government conservative in the first place. He always said he wanted to do more on education, teen pregnancy, social activism and the like.

The left was convinced Compassionate Conservatism was simply a case of another Republican president saying “nice doggie” until he could find a rock. So they spent much of the first term screaming about Bush’s heartless policies, even as he was increasing spending almost across the board. Now, he’s heading toward lame duck territory and his most exciting reforms on social security and taxes are moldering.

But that was the case before the new spirit of compromise!

In my ideal world, I’d never agree to a hike in taxes. But the simple fact is that a huge chunk of the public thinks it’s the job of the rich to pay more than their share for government they don’t use. I’d much prefer a flat tax or, even better, a consumption tax, which would tax everybody at the same rate and not punish people for working harder (aka making more money). For those who think this is outrageous, consider the fact that nobody ever called church tithing immoral, even though everybody’s expected to pay the same percentage. But we shouldn’t make the perfect the enemy of the good.

So even though this country’s fiscal problems have to do with overspending, not undertaxing, the fact remains that major, serious spending cuts are probably politically impossible without some tax increases. What I propose–for conversational purposes in this new age of bipartisanship–is that for every two-percent cut in spending we increase taxes by one percent on the top one percent. I know there are all sorts of economic arguments against this, but the political argument is the one that concerns me.

The moralizing watchword since the war on terror began has been “sacrifice.” Americans need to share more of it. Cutting spending alone would inevitably fall on the backs of the poor because they rely on entitlements more, and you can’t seriously cut spending without cutting entitlements. In effect, my hope is that the tax dollars of the wealthy would buy the cuts for the poor.

I’m sure I will hear plenty of screams from both sides about this. But do keep in mind that in my own Memorandum of Understanding, this deal must work both ways. For every two-percent increase in spending, the top one percent get a one-point tax cut. The idea is to make government growth not just fiscally but politically expensive. And the way things are going now, the rich would end up living tax-free under my plan.

(c) 2005 Tribune Media Services


The Latest