Tea Party to Hatch: Play it Our Way or You’re Out

Tea Party to Hatch: Play it Our Way or You’re Out

Alex Wong / Getty Image News / Getty Images

The Tea Party is making life very difficult for long-serving Republicans in both the House and Senate. Their usual methods of achieving power and success in Congress have been turned on their head, leaving many of those members traditionally seen as being on the top of the heap scrambling to reinvent themselves because their positions of power have become political liabilities.

The classic example is the House Appropriations Committee, which has long been one of the most coveted assignments for any congressman. I remember back in the 1980s a friend of mine, who worked for a member of that committee, told me there was an unwritten rule that each member had $10 million per year ($20 million in today’s dollars) that he could appropriate for just about anything annually, no questions asked.

But in recent years, the attractiveness of being on Appropriations has waned as Congress came under heavy pressure to eliminate so-called earmarks, which were universally seen as unjustified pork barrel spending even before the Tea Party movement came into existence.

Now, with extraordinary demands to cut spending that goes through the Appropriations Committee – so far, Republicans have exempted entitlements such as Medicare from cuts – membership on that committee has become downright painful. Instead of handing out goodies, the committee is now being forced to take them away. Indeed, the House Appropriations Committee’s status has fallen so low that House Speaker John Boehner recently took away its offices in the Capitol to build a new bathroom.

The same problem confronts senators as well. Those with long seniority are desperately trying to figure out how to keep their service from being a liability, rather than the asset it has always been. Sen. Orrin Hatch, Republican of Utah, is one of those who is attempting a makeover lest he fall victim to the same forces that caused his state’s Republicans to dump his longtime Senate colleague, Robert Bennett, last year for the sin of having occasionally cooperated with Democrats.

According to a Feb. 21 Gallup poll, Utah is the second most heavily Republican state in the nation, very slightly behind Wyoming. Republicans in Utah start with a 30-point advantage over their Democratic challengers in statewide races. Therefore, winning the Republican nomination is tantamount to winning the general election. And those that are delegates to Republican conventions or voters in Republican primaries tend to be the most hard-core conservatives in a very conservative state.

In case Hatch didn’t already know he is in political trouble , he was told so bluntly when his newly elected colleague in the Senate from Utah, Mike Lee, a favorite of the Tea Party crowd, declined to say he would support him for renomination next year when Hatch must run for re-election.

Despite a consistently conservative voting
record, both he and Hatch are now viewed
as insufficiently principled.

Such a snub by a newly elected senator from one’s own state and party is extraordinary. Historically, freshmen have shown great deference to the senior senator from their state, especially one with as much seniority as Hatch, who was first elected in 1976 and is the fourth most senior senator and the second most senior Republican behind Richard Lugar of Indiana.

Lugar is also in political trouble in his state for the same reasons. Despite a consistently conservative voting record, both he and Hatch are now viewed as insufficiently principled and too willing to work with Democrats. However, while Lugar has basically decided to stand on his record and take his chances, Hatch is fighting back, working hard to remake himself as one who can champion the Tea Party’s agenda with the best of them.

A good example of this can be seen in a speech Hatch gave on the Senate floor on Feb. 17. It laid out Hatch’s philosophy on tax policy, which is important because starting this year he has become the top Republican on the Senate Finance Committee. In this position, he will have a great deal to say about tax reform and entitlements, and whether there will be any hope of cooperation with Democrats on these issues. We can be certain that he will not make the mistake his former colleague Bennett made of co-sponsoring any bills with Democrats on hot-button issues. (Bennett’s co-sponsorship of a health reform bill with Democratic Sen. Ron Wyden of Oregon was a major factor in his downfall.)

In his speech, Hatch was very careful to take the Tea Party line that the budget deficit has nothing whatsoever to do with tax cuts; it is 100 percent a problem of too much spending. No mention was made of the fact that federal revenues will take just 14.4 percent of the gross domestic product this year; the lowest percentage since 1950 and far below the postwar average of 18.5 percent. But in the Tea Party world, it is impossible for tax cuts to cause the deficit or for higher revenues to ever reduce the deficit. As Hatch explained, “We cannot get out of this hole by taking more of taxpayers’ hard-earned money.”

To emphasize that spending is the one and only fiscal problem the nation faces, Hatch said that concern for the deficit “is code for raising taxes.” That is because, mathematically, a deficit can be caused either by higher spending or lower revenues. But he wants everyone in the Tea Party to understand that under no circumstances will he countenance any tax increase, no matter how big the deficit is. Echoing a crackpot theory called “starve the beast”, Hatch insisted that tax increases never reduce deficits and only feed the beast. As he said, “If we raised taxes to eliminate the deficit, the current levels of spending would just cause a new deficit to arise.”

There is absolutely no substantive difference
between a tax expenditure and a direct
government handout.

Hatch did not address the fact that following the 1993 tax increase, which he and every other Republican in Congress opposed, federal spending fell from 21.4 percent of GDP to 18.3 percent in 2000. And, contrary to starve-the-beast theory, when Republicans slashed taxes during the George W. Bush administration, it did not put any downward pressure whatsoever on spending, which rose to 20.7 percent of GDP in Bush’s last year.

As all Republicans do, Hatch simply denied that the Bush tax cuts, all of which he supported, had anything to do with the evaporation of budget surpluses in the 1990s and the advent of massive deficits in the 2000s, while Republicans controlled the White House and both houses of Congress. Said Hatch, “The taxpayer does not cost the government money when he keeps what he earns…. Since when did keeping your own hard-earned money constitute the government giving you anything?”

Perhaps Sen. Hatch needs to become acquainted with something called “tax expenditures”. These are spending programs that run through the tax code rather than the appropriations process. They are special deals that allow some taxpayers to pay less than others in the same circumstances. In many cases, there is absolutely no substantive difference between a tax expenditure and a direct government handout.

Hatch attempted to prove that lower revenues are not a cause of the deficit by, correctly, saying that federal revenues have averaged 18 percent of GDP since 1971. But his point is utterly disingenuous because revenues are far below that now and have been for the last two years. Thus he is implying that we are starting from revenues at 18 percent of GDP instead of 14.4 percent.

Hatch notes that the Congressional Budget Office is forecasting a sharp rise in revenues to 18.8 percent of GDP in 2013, 19.9 percent in 2014, and more than 20 percent for the rest of the decade. Since this is above the 18 percent historical trend, which Hatch views as immutable for some reason, he says this is unjustified.

Any Republican failing to support further
tax cuts will, no doubt, be found guilty of
violating the taxpayer pledge.

The main explanation for this rise, however, is the assumed expiration of the Bush tax cuts, which Republicans themselves enacted with an expiration date of 2010. But when the time came for the tax cuts to expire, exactly as Republicans wrote the law in the first place, they insisted that failure to continue them indefinitely was an unconscionable tax increase. In the end, President Obama went along with a two-year extension that will expire at the end of 2012. The CBO is required to take the law at face value.

What is unclear is whether Hatch supports a rise in revenues from 14.4 percent of GDP even to 18 percent. The Tea Party line is that taxes must not rise for any reason, no matter how low they are. This suggests that not only must all the Bush tax cuts be extended forever, but additional tax cuts need be enacted to keep the tax burden where it is at 14.4 percent of GDP. Any Republican failing to support further tax cuts will, no doubt, be found guilty of violating the taxpayer pledge that is rigidly enforced by Republican tax guru Grover Norquist.

Whether Hatch’s pandering to the Tea Party will allow him to keep the Republican nomination next year and stay in the Senate remains to be seen. But it’s clear that he is not going down without doing everything in his power to become the Tea Party’s favorite senator. Unfortunately, this probably means that it’s going to be impossible to get either tax reform or serious deficit reduction through the Senate any time soon because the Finance Committee is where most of the action will take place, and its chairman, Democrat Max Baucus of Montana, always bends over backward to try and get bipartisan support for whatever the committee does.

It may be that action on two of the biggest problems facing this country will have to wait until Utah Republicans choose their nominee for the U.S. Senate next year.

Related Links:
Hatch prepared to be 'most hated man' in Washington (Cache Valley Daily) 
Poll: Bad News for Hatch (Wall Street Journal) 
Tea Party Targeting Orrin Hatch (Deseret News)