A new Congress begins two weeks from today, and if the American people sense that change is coming, they’re right. We got a preview last week when the president signed a bill that extends current income-tax rates for the next two years. After insisting for the past two years that the best way to help the economy was to send trillions of dollars to bureaucrats in Washington, here was the president praising a tax cut that, as he put it, would help business owners “take the reins of the recovery and propel the economy forward.”
But that surprising admission was only part of it. A day earlier, a group of Senate Republicans whom most people expected to vote for a $1.2 trillion spending bill surprised the political class in Washington by uniting in opposition to it. Once they had absorbed the fact that this bill froze in place for another ten months the big-government policies of the past two years, they changed their minds and their votes. They realized the message voters sent last month was to change the culture in Washington now, not next October.
Both events mark an important shift in the great national debate that’s been raging for the better part of the past two years about the proper role of government. On one side are those who believe that the solution to our current economic troubles lies in giving more to Washington, and that the only way to dig us out of the recession, create the conditions for job growth, and put America on a stronger economic footing is to hand over more of our freedoms — and more of our paychecks — to Washington. On the other side are those who have argued that in order for the economy to rebound and for more Americans to find work and resume their rise up the economic ladder, individuals at all economic levels must be free to take risks and free to fail. They argue for government limits and for making as many decisions as possible close to home.
It’s no secret most Americans fall into the second group. A Gallup poll from earlier this year found that 86 percent of Americans have a positive view of the free-enterprise system, while only 10 percent view it negatively. Voters may occasionally find the big-government message appealing, as they did in 2008, but this is the rare exception. Once it became clear that Democrats in Washington were more interested in extending the size and scope of government than they were in addressing the nation’s immediate economic problems, Americans rebelled. And on Election Day 2010, they made it very clear that they’d had enough of the Democrats’ two-year experiment in big government.
Some Democrats have responded to the election by reaffirming their belief in government’s ability to solve our problems. But many others have acknowledged with their votes on the tax bill that the policies of the last two years have fallen short, and that it’s time to move in a different direction. The importance of this shift can’t be overstated.
Parts of the tax agreement are counterproductive, such as the Democrats’ insistence that Congress not pay for an extension of unemployment insurance. It’s foolish to exacerbate one problem — a $14 trillion federal debt — in our efforts to alleviate another. In another way, though, this compromise represents an essential first step in tackling the debt, because in keeping taxes where they are, we are officially cutting off the spigot. Until we did that, Democrat lawmakers were never going to get serious about cutting spending or debt.
History is clear on this point. As economist Stephen Moore has noted, every dollar of new tax revenue the federal government has collected since World War II has been associated with $1.17 in new spending, meaning lawmakers in both parties have spent every dime of revenue that has come in and then borrowed a little bit more on top of it to set a higher baseline for the next year. But the public has caught on to this game. Americans know that the root of our current problems lies in the fact not that Washington taxes too little, but that it spends too much. And they want us to live within our means.
Some may continue to deny that Washington has a spending problem. But their favorite argument — that some people deserve a tax increase and others don’t — also happens to be their worst. Most Americans don’t view the world as divided into fixed economic groups, and they’ve never really bought in to the idea that we should punish those who prosper. Most Americans want everyone to succeed. They’re far less interested in scapegoats than in opportunity, and in giving everyone the chance to move up the ladder.
The good news is that after the experience of the past two years, most Americans have lost faith in government’s ability to get us back to prosperity. The fact that many of these people have until now been advocating big-government policies is even better news. It’s also the reason Americans are correct in thinking change has come to Washington.
— Sen. Mitch McConnell is the Republican leader in the U.S. Senate.