Politics & Policy

The GOP Should Think Twice before Returning to Austerity Politics

(Andrey Maximenko/Getty Images)
A singular focus on debt, deficits, and entitlement reform would come with serious political risks.

How quickly the shine wears off!

In the days after the election, Republicans were shouting from the rooftops that they had become a “multiethnic, multiracial, working-class coalition,” in Florida senator Marco Rubio’s words. Only a month later, many of them already risk being lured toward a pivot back to 2010s-style austerity politics during the Biden administration, with a renewed focus on the federal deficit and entitlement reform.

Spending and entitlement reforms are legitimate topics of concern, and an authentically bipartisan approach that tackles federal deficits and the debt trajectory could be smart as a matter of policy. But there is a risk that chasing the will-o’-the-wisp of austerity could leave Republicans lost in the electoral and policy marshes.

Trying to push party-line entitlement reform has backfired on the GOP again and again in the recent past. George W. Bush’s 2005 Social Security–privatization proposal kneecapped his second term from the start. In 2012, Republicans got bogged down defending their position on Medicare reform instead of reaching out to the blue-collar voters they needed. The 2017 attempt at health-care reform brought Donald Trump’s approval rating to nearly the lowest level of his presidency. (It was marginally lower during the congressional debate over the 2017 tax-reform package.) Health care was a key wedge issue for Democrats in the 2018 House wave that cost Republicans dozens of seats.

There is reason to think that this might not be the most propitious moment for green eyeshades, either. A successful roll-out of a coronavirus vaccine by early 2021 might set the stage for an economic rejuvenation, but the shock waves from the pandemic could still be echoing through the economy. And beyond political positioning, retreating to austerity politics could cost Republicans a chance to promote other kinds of reforms that would strengthen workers and families: fixing the medical marketplace (by reducing cartelization, revising medical licensing, etc.), passing a 21st-century infrastructure program, trying to secure a strategic industrial base, enacting smarter regulation of Big Tech that addresses market concerns and serves the public welfare, offering Americans family tax credits, and so on. To be a true party of workers, the GOP will have to show that it can deliver on some of these lunch-bucket issues.

Yes, a party can walk and chew gum at the same time. Republicans could certainly try to attempt to address the debt while also adopting more pro-worker policies. But there is a real risk that press releases about a “debt crisis” could become a substitute for the hard work of developing a policy agenda that tackles the needs of the present.

Moreover, if Republicans are serious about trying to get a political consensus behind efforts to tackle the federal debt, they will need to promote other policies to show that theirs is a full-spectrum political party and not just a budget-activism organization. This will mean recognizing that policy reforms can also help address the federal deficit. For example, while the American medical system can do great things (as the rapid development of the coronavirus vaccine might indicate), it is also inefficient in many ways. Efforts to reduce the cost of medical care could help level out the spending trajectory of federal health-care entitlements. Policies to tighten the labor market could also lessen the need for income-support programs and fuel more economic growth, which in turn would help reduce the federal debt burden.

In fairness to Marco Rubio, he said only that the “future of the party is based on a multiethnic, multiracial, working-class coalition.” But if there’s one thing 2020 has taught us, it’s that the future is far from certain. Republicans now tempted by the siren song of hard-line austerity politics would do well to keep that in mind.

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