Running With Scissors: The Continuing Tax Debate

Conservatives, including the talk radio guys and members of the DeMint/Bachmann caucus, continue to complain about last Monday's tax deal extending the Bush tax rates. I think these are good faith disagreements. An informal survey of my Tea Party friends here in SF (it took 5 minutes) tells me that the extension of unemployment benefits really sticks in their craw, much more so than temporary nature of the tax rate extension. Still, I continue to be unmoved by the cries that "they could have asked for 'permanent' tax cuts!" and "they could have gotten so much more!" Look at it from the perspective of the GOP leadership in Congress:

1. the assignment was to extend the Bush tax rates. Mission accomplished. No one was talking seriously about tax cuts starting 01/01/11.

2. we are still in the fading days of the already infamous 111th Congress. The Democrats have huge majorities in both houses of Congress. Yet, the president bent to Republican demands on tax policy in a way that was more conservative than liberal, regardless of how many times Obama declares the payroll cuts to be "stimulus." If Democrats really cared about the middle class as much as they claim, they could have passed whatever tax plan they wanted. But, they didn't. That's not Mitch McConnell's fault.

4. Yes, Republicans won a historic victory last November. Voters are clearly engaged in matters of tax and spending. But, if you are an old-timer like McConnell or Boehner, you can remember other times when you won major elections and then - when your party made the mere mention of reforming entitlements and cutting spending - those conservative voters mysteriously disappeared, replaced by quailing moderates worried about "partisanship," "racism," and "The Children."

When George W Bush tried to pass social security reform, he did it virtually alone. Where were all the fiscal conservative voters back then? I don't know, but I do remember the Democrats' inevitable demagoguery over "Republicans want grandma to eat dog food." I could say the same about Fannie/Freddie reform, efforts to defund PBS/NPR, closing the Department of Education, etc.

Look at what happened in California. I've been critical of the Governator. He rode into office on a real mandate to shrink California government. Yes, he frittered away his mandate over pointless "negotiations" with state Democrats. But, when the time came in 2005 for the voters to pass some reforms he proposed, all those fiscal conservative voters disappeared. Instead, the airwaves were filled with ads from the nurses union and other public sector unions, all with the same message: Republicans are destroying the state! And it worked! Schwarzenegger's propositions all failed and that was that for reform. Ever since then, he has found applause and good press passing progressive legislation like cap & trade and high speed rail, not tax cuts or free market reforms. And, it's Democrats who have destroyed the state for real, rather than on teevee as the Republicans are always supposed to be doing, but never quite accomplish.

The fact is the the recent volatility in American politics has been due to the voters' continued lurches from right to left and then right again. Voters have shown themselves to be fiscally conservative more in theory than in fact. Maybe the recent explosion in spending and debt has effected a permanent change in voter attitudes, but I feel like we've been here before. As others have noted, the government has been growing steadily since 1932, even during the Reagan years. Yeah, you can blame cowardly politicians, but it's the voters who feed that fear.

Voters may not trust the Republican leadership. But, the leadership may still have reason to not trust voters to be there when the grim business of breaking up the welfare state begins.

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