The deficit pose

I know it’s a dead horse, but it’s an important dead horse, damnit.  Jon Chait has a great timeline of the history of policy approaches to deficits over the past 30 years.  There really can be little doubt that Republicans are not and never have been concerned about deficits (excepting GHWB who is an apostate for it.  Here’s what I think is the key bit:

The story begins in 1990, when George H.W. Bush decided to compromise with Democrats in Congress and sign a major deficit reduction law. The deal contained significant cuts in spending, along with a small hike in the top tax bracket, and pay as you go budget rules requiring that any entitlement increases or tax cuts have offsets to make them deficit-neutral. Conservatives revolted, voting en masse against the deal — just 10 House Republicans supported it — despite a full-court lobbying effort by Bush. The deal is still remembered as a betrayal by Bush and the prototypical example of how a GOP president should not govern. Every major adviser associated with the deal from Bush’s side has since been purged from the party.

In 1993, Bill Clinton’s administration decided that the deficit was still too high, and pushed through another deficit-reduction measure — similar in design to the 1990 deal, though somewhat smaller and more titled toward tax increases. Republicans declared it an economic and moral abomination and, having completed their reaction against the 1990 agreement, gave the Clinton budget zero votes in either house of Congress. After gaining control of Congress, Clinton fought with Congressional Republicans over how much to reduce the deficit and whether it was appropriate to enact a large regressive tax cut as part of such a program…

The next most important debate over the deficit occurred during the appearance of a budget surplus at the end of the Clinton administration. Republicans argued that the surplus demonstrated the affordability of large permanent tax cuts. Clinton argued that a surplus at the height of a red-hot business cycle ought to be devoted to reducing the national debt.

Once Republican George W. Bush took office, Clinton’s veto was gone, and Republicans immediately began dismantling the bulwarks of fiscal conservatism. They ended the pay as you go budget rule, and passed a series of large tax cuts. They also passed a Medicare prescription drug benefit, also unpaid-for, and major military and homeland security spending increases. Much of the criticism over the enactment of these policies, especially the 2001 tax cut, centered around the durability of the surplus, which Democrats called uncertain, and Republicans insisted was bound to continue growing.

The most frustrating part to me is the Bush tax cuts because they occurred under the fanciful and ahistorical belief that a booming economy was simply the new state of the world and would not wane.

 

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About Steve Greene
Professor of Political Science at NC State http://faculty.chass.ncsu.edu/shgreene

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