GOP Fiscal Policy More Complicated than Collender Suggests

GOP Fiscal Policy More Complicated than Collender Suggests

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My good friend Stan Collender dismisses my notion of tension within Republican circles between lower taxes and lower deficits, saying the tax cutters always win and apparently always will. But he needs to broaden his horizons a bit, for GOP fiscal policymaking has been, and remains, far more complicated than he suggests.

For starters, he should broaden his historical perspective. Yes, President George H.W. Bush violated his “read my lips, no new taxes” pledge of 1988 and paid dearly for it. But he was not alone, nor even necessarily, as Stan puts it, “the most notable exception to the tax reducers usually winning.”

It was, instead, Republican icon Ronald Reagan (as the Wall Street Journal’s Gerry Seib reminds us today) – which puts the lie to the notion that, in GOP circles, deficit cutting will always lose out to tax cutting. After his 1981 tax cuts, Reagan raised taxes several times, most notably with a tax increase in 1982 that recaptured much of the lost revenue of a year earlier and subsequent increases in gas and Social Security taxes.

More broadly, Stan ignores my review of pre-Reagan fiscal policymaking, which was dominated by budget balancing, earning it the nickname “root-canal economics” – that is, all pain without the pleasure of tax cutting.

My point is not that we have returned to such an era. My point, instead, is that history does not move in a single line. It ebbs and flows, and we cannot be sure what its next stage will bring. We can only look for hints of what’s to come.

Speaking of hints, Stan points to “tea party favorite” Rep. Michele Bachmann’s stated notion that only spending increases, not tax cuts, generate higher deficits. Noted, but GOP fiscal thought – if you care to elevate Bachmann’s meanderings on the subject to actual “thought” – hardly ends there.

Has Stan noticed that Republican Senators Tom Coburn of Oklahoma, Mike Crapo of Idaho, and the retiring Judd Gregg of New Hampshire all signed on to the Bowles-Simpson plan of President Obama’s fiscal commission even though it includes tax increases?

Has he noticed that a bipartisan group of about 20 senators, organized by Democrat Mark Warner of Virginia and Republican Saxby Chambliss of Georgia, have been meeting to discuss approaches to deficit cutting, with Chambliss telling reporters last week, “The way you do it is put everything on the table?”

Has he noticed, as I highlighted in my post last week, that Obama’s tax-cut deal with Republicans earned the scorn of some leading GOP presidential aspirants and tea party activists precisely because it will generate higher deficits – meaning that, in their eyes, on this one, tax cutting should take a back seat to budget balancing?

Has he noticed that several bipartisan commissions with former Republican officeholders and other leading party figures have crafted deficit-cutting deals that call for sizeable tax increases along with spending cuts, most notably the recent plan of the Bipartisan Policy Center’s Rivlin-Domenici task force?

Of course – of course! – a bipartisan plan to significantly reduce deficits will be no easy thing to achieve. Of course, Republicans will swallow hard before voting for tax increases, and, in the end, perhaps not enough of them will swallow at all.

But, Coburn? Crapo? Gregg? Chambliss? Something is stirring within Republican circles. Let’s not dismiss it out of hand.

Lawrence J. Haas is former Communications Director to Vice President Gore and, before that, to the White House Office of Management and Budget. He's now a public affairs consultant who writes widely about foreign and domestic affairs, including fiscal policy.

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Lawrence Haas
is former senior White House official and award-winning journalist, writes widely on foreign and domestic affairs. His articles have appeared in The New York Times, USA Today, Los Angeles Times, Baltimore Sun, Miami Herald, San Diego Union-Tribune