May 11, 2005

A Good, Old School Republican Post

Veteran Republican PR guy Rich Galen is a talented, observant and often highly amusing writer who to my regret usually employs his skills delivering a more articulate version of the RNC message of the day to people who already agree with it. But he had an old-school Republican post last week that I promised myself I would write about.

Let me say up front that you'll never hear me calling myself a "small-government conservative Republican." The United States, with close on 300 million people, is a very big country; naturally we need a big government. We need a government able to do the things we ask it to do with energy, initiative and skill; sometimes we will need it to do things it has not done before. And we need government to do what we ask it to within the limits of what we are willing to pay in taxes. That requires that at least some people in Washington have the ability to say no, not only to new spending programs but to the inertia that keeps old spending programs going whether they make sense any more or not. It's been a generation at least since anyone in the Democratic Party had that ability, and almost all the Republicans who had it up until 1994 have lost it since.

Galen's post is about the perhaps inappropriately-named Small Business Administration, and deserves to be read in full, as does his follow-up reporting reader reaction. Now personally I'm with the readers who think SBA has outlived its usefulness, as of about 20 years ago. Creditworthy small businesses don't need it, and the federal government should only be backing more risky ventures if it has extra money to throw around, which it doesn't right now. Plus, doing away with SBA would allow Congress to disband the two committees with perhaps the highest ratio of fluff to substance.

At a minimum, SBA certainly shouldn't be catering to very large businesses to the extent that very large businesses are willing to cater SBA functions. Or hiding the extent of the catering from the public (this just completely frosts Galen, and I can understand why). To me, though, the minimum really isn't good enough. Major comets pass near the earth more often than minor federal agencies lose their funding, which would be OK if the government were taking in enough in taxes to pay for them without going hundreds of billions a year further in hock to Asian central banks. It isn't.

Is there, as one economist suggests, just a lack of seriousness in Washington about the federal deficit? You could say that. The White House has its approach, which is to support freedom around the world, remember 9/11, and be on the lookout for any GOP campaign contributors who have somehow not yet been rewarded with a cut in their taxes. The Democrats have their approach, which is restricted to criticizing anything the White House does as an attack on the middle class and denying that they want to raise taxes. It isn't even hard to find people willing to talk about extending the commitment in Iraq, which has already cost over $300 billion, into the indefinite future as if this were an option.

Well, it isn't. I don't care how right and noble and inspiring your cause is, you can't do things you aren't willing to pay for. Most Democrats in the backs of their minds think that this really does mean we need to raise taxes, not just for Iraq but to fix Social Security, ensure Medicare's solvency, deal with the Alternative Minimum Tax problem, pay for military transformation, insure the uninsured, bail out more private pension funds, pay for whatever help the Small Business Administration needs to give to Sam's Club and cut the current deficit. We'd end up with tax rates as high as Sweden's.

Which means that Republicans, if they want to avoid this, had better come up with some alternatives. There isn't any question that Washington will need to raise more revenue in taxes than it is right now; no one is contemplating and no one is suggesting cuts in federal spending large enough to make higher taxes unnecessary. The question is whether higher taxes are to be the only tool we will use to correct the current enormous fiscal imbalance. Would proposing spending cuts be popular? Well, no. But it is easier to make good policy ideas popular than it is to make bad but popular ideas good policy.

Posted by at May 11, 2005 03:59 PM | TrackBack (22)
Comments

Let me say up front that you'll never hear me calling myself a "small-government conservative Republican." The United States, with close on 300 million people, is a very big country; naturally we need a big government.

Well, as long as you are for a smaller government (and it sounds like you are), you should still call yourself a "small-government conservative Republican," because that's what it really means. It's just not as catchy, and conservatives have figured out that simpler language, in particularly when it comes to labels, is much more important than 100% accuracy.

Besides, "small" is a relative term. I assume your ideal government would appear small compared to what we have now?

Is there, as one economist suggests, just a lack of seriousness in Washington about the federal deficit? You could say that.

Institutionalized, I would say. Presidents don't care about the deficit largely because of term limits, so I'm not sure whether that's worth addressing. But as I've said before, Congress is motivated by bringing home enough bacon and getting enough campaign contributions to win reelection. My previous suggestions would address this, but of course, they don't have an Slurpee's chance in hell in our two-party system. But note that SBA and similar agencies and programs will continue to stick around otherwise.

Posted by: fling93 at May 11, 2005 08:20 PM | Permalink to this comment Permalink

"That requires that at least some people in Washington have the ability to say no, not only to new spending programs but to the inertia that keeps old spending programs going whether they make sense any more or not. It's been a generation at least since anyone in the Democratic Party had that ability, and almost all the Republicans who had it up until 1994 have lost it since."

Ever heard of William Jefferson Clinton?

Posted by: praktike at May 11, 2005 09:10 PM | Permalink to this comment Permalink

also worth noting: cutting all of federal discretionary spending wouldn't even close the entire budget deficit. The SBA is peanuts. Federal receipts are at 16% of GDP or so, which is the lowest they've been since Eisenhower.

Nope, JB, we need to reverse these idiotic tax cuts.

Posted by: praktike at May 11, 2005 09:13 PM | Permalink to this comment Permalink

I beg your pardon. President Clinton left office with a surplus. He was a Democrat. He eliminated the deficit.

Posted by: antibes at May 11, 2005 09:13 PM | Permalink to this comment Permalink

praktike: Nope, JB, we need to reverse these idiotic tax cuts.

Tax shifts.

Posted by: fling93 at May 11, 2005 09:26 PM | Permalink to this comment Permalink

Praktike is right. Even if you eliminated all discretionary spending (which no one could - even with bi-partisan support), there would still be big time fiscal problems.

I think that is why the GOP is moving to cut down the size of SS and Medicare. If you could bring those programs to their knees, then you might have some flexibility. At the very least, they've drained away the supposed SS surplus built up because of tax increases in the 1980s - then turning around and calling the trust fund worthless paper. Yeah, its worthless because you've left the govt in such bad shape financially that it will be hard to collect.

Of course, in the alternative, you could just repeal some of the massive multi-trillion dollar tax cuts we've seen over the past four years. But what would Grover say?

Posted by: Eric Martin at May 11, 2005 11:47 PM | Permalink to this comment Permalink

Eric, that's quite right. Entitlement spending can't continue on its current trajectory. I don't think altering that trajectory downward is even a possibility, though, if discretionary spending continues in binge mode.

I also think we need to be aware of the importance and difficulty of distinguishing between honest conversation and campaign spin on this subject. Campaign spin will always seek to give full credit for any good thing that happens in a given four years to the the man in the White House at the time, and conversely assign all the blame for any bad thing to the other party. But even as large as the federal government is there are a lot of things about the economy that are going to happen, or not, regardless of what the government does.

In retrospect we can see that the Internet boom and stock market bubble of the late '90s was a mixed blessing, but one thing it did do was produce a temporary surge of revenue for the federal government. Attributing this to the wise governance of the Clinton administration is makes no more sense than giving Clinton credit for good weather -- which is not a knock on Clinton, only a recognition that the limited restraints on federal spending first applied in the 1980s had mostly disappeared by the end of the 1990s, and alarmed no one only because it seemed that the government was so flush it could easily afford lots of new spending.

This boom psychology has still not dissipated in Washington, one reason I think why the White House can so easily get Republicans to go along with tax cuts we can't afford and Democrats can vehemently insist that all entitlement benefits need to be preserved as if in amber, in perpetuity. Another reason, of course, is that so many people really want to believe campaign spin. The actions called for outside the limited but comfortable intellectual world of the permanent campaign will be genuinely difficult, and the many people in Washington who get their livings from the permanent campaign -- and even more people around the country who derive entertainment and some measure of emotional gratification from it -- do not want difficulty.

Posted by: JEB at May 12, 2005 03:34 AM | Permalink to this comment Permalink

JEB: Attributing [the boom and bubble] to...Clinton...makes no more sense than giving Clinton credit for good weather...

Yeah, I always thought that if anybody deserved credit/blame for the boom/bubble, it was Greenspan. He was probably the one guy who had a chance of popping the bubble back when he talked about "irrational exhuberance," but he chickened out on actually doing anything about it when the markets screamed bloody hell. That's the problem when your Fed chief is a political animal, in contrast to Volcker, who was willing to cause a recession in order to end inflation.

JEB: I also think we need to be aware of the importance and difficulty of distinguishing between honest conversation and campaign spin on this subject.

The blogosphere definitely needs more honest nonpartisans, man. I really hope you keep blogging after your gig here is up.

Posted by: fling93 at May 12, 2005 03:59 PM | Permalink to this comment Permalink

OT:

JEB, glad to see your still posting despite Greg's return.

You're a great addition to my mental blogroll.

And same for Praktike. P.Lukasik was a poor substitute for your contributions from the left.

Posted by: byrd at May 12, 2005 04:00 PM | Permalink to this comment Permalink

F93: Thanks for your kind words, but I need to tell you that no one who knows me would ever confuse me with a nonpartisan. It's true I don't have much use for the Bush family and regard fear of being seen with Democrats or talking with the dreaded liberal media as somewhat unmanly. But my biggest gripe with the Republicans today is that they are becoming too much like Democrats, in their slavish devotion to organized interest groups and obsession with campaign politics.

Posted by: JEB at May 12, 2005 04:29 PM | Permalink to this comment Permalink

Well, sounds about as nonpartisan as any person can be (nobody's 100%). And your gripe seems to involve campaign financing, which is really a nonpartisan issue.

Posted by: fling93 at May 12, 2005 05:07 PM | Permalink to this comment Permalink
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