Wednesday, December 05, 2012

And I End With A Musical Allusion

Even Donna Brazile is getting into the act, the almost ritualistic plea to House Republicans to grow a spine and challenge their party's leader.  The CNN contributor and Democratic strategist writes "First, though, Republicans must break Norquist's insane hold on their party. More Republicans must put their country before someone else's agenda, and their Pledge of Allegiance before 'The Pledge' to Norquist."

Grover Norquist is extraordinarily influential in the G.O.P.   Bruce Bartlett, policy advisor to Presidents Reagan and Bush 41 and to Representatives Jack Kemp and Ron Paul argues the founder and director of Americans for Tax Reform "basically controls the Republican Party’s fiscal policy."

Bartlett takes us through the modern history of Norquist's goal of shrinking government "down to the size where we can drown it in a bathtub."  The "starve the beast" doctrine began, he writes, with Alan Greenspan in October, 1978 appearing before the Senate Finance Committee and advocating "restraining the amount of revenues available and trust that there is a political limit to deficit spending."

In February, 1981 President Reagan claimed "But there were always those who told us that taxes couldn't be cut until spending was reduced. Well, you know, we can lecture our children about extravagance until we run out of voice and breath. Or we can cure their extravagance by simply reducing their allowance."   Twenty years later, Bartlett continues,

George W. Bush justified his tax cut on starve-the-beast grounds, saying it would constitute a “fiscal straitjacket for Congress.” According to the journalist Ron Suskind’s book, “The Price of Loyalty,” the Bush adviser Karl Rove often invoked the starve-the-beast approach as “conservative economic theology” in White House meetings. By 2003, using deficits strategically to slash the size of government was widely considered to beparty doctrine among Republicans.

Cutting taxes is merely the means to the end of eliminating government.  In his famous interview with Politico on November 28, Norquist, asked whether the debt ceiling should be increased month-by-month, responded

Monthly. Monthly. Monthly if he’s good, weekly if he’s not. I mean, look, it’s an accordion, it’s an accordion, because if you’re really – well, that’s what they did – remember the first few months of the Obama – when the Republicans took the House and the Senate – took the House, they said, “O.K., here’s two weeks of continuing resolutions because you have saved $4 billion. Oh, now you’ve agreed to $8 billion in savings, you may have four weeks.

But, Bartlett explains in another column

At the risk of stating the obvious, the debt limit is nuts. It serves no useful purpose to allow members of Congress to vote for vast cuts in taxation and increases in spending and then tell the Treasury it is not permitted to sell bonds to cover the deficits Congress created. To my knowledge, no other nation has such a screwy system.

Nevertheless, we have a debt limit that is denominated in dollar terms; it is breached when the debt subject to limit, which includes bonds the government itself holds in various trust funds, rises above that limit. Currently, it is $16.394 trillion. The Congressional Budget Office estimates that given current spending and revenue trends, that figure will be reached before the end of the year.

At that point, Treasury will have to take extraordinary and costly measures to avoid technically hitting the debt ceiling. But these measures provide only a month or so of breathing room. At some point, Treasury will lack the cash to pay the bills that are due and it will face nothing but unthinkable choices – don’t pay interest to bondholders and default on the debt, don’t pay Social Security benefits, don’t pay our soldiers in the field and so on.

Either way, social services provided by government would suffer dramatically, either immediately or more gradually.  Disenchantment would result and disillusionment of voters toward "the government" would increase as the needs of the individual and of the community are neglected.   With government unable to meet its objectives,  people would grow ever more angry and demand further cuts in an institution which would increasingly seem to be without purpose.   Perhaps it wouldn't be so small as to be drowned in a bathtub, but it would become a shell of its former self.

The GOP thus is pursuing a long-term, ambitious strategy.   President Obama, by contrast, is pursuing a strategy of gaining prompt assent from congressional Repubs for re-imposing Bush-era tax rates on upper incomes.  If that is done before the fiscal cliff/curb/slope is reached, the President will have played his cards for, relatively speaking, chump change and the GOP will be ready to play its debt ceiling card.

In the context of modern American politics, the debt limit is not "nuts"- not, at least, for a Party determined to use it to bring support for government to a diminuendo and with it, its own fortunes to a crescendo.

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