In my most recent column here on Justia’s Verdict, I laid the groundwork for a discussion of the policies that former Massachusetts Governor Mitt Romney would very likely pursue, if he is successful in his bid for the White House this year. Today, I will discuss the approach to government spending that a Romney Administration would be apt to embrace.
The difficulty in assessing Romney’s policy views on any topic, as I noted in my prior column, is that Romney is infamously uncommitted to any set of policies or principles. During his two presidential campaigns, he has completely changed his positions on so many issues, so often, that a reasonable person can only conclude that he has no commitments other than a firm commitment to the idea that he should be President.
As it turns out, however, this very stance makes it perversely easy to predict what a President Romney would do. Because he will soon be the nominee of a political party that has a well-earned reputation for lockstep conformity on issues, and because that party has, over the last few years, adopted a very specific and reactionary policy agenda—one that can only be described as radical—Romney’s political instincts will surely lead him to endorse with great enthusiasm the agenda of his party’s extremist base.
As an aside, it is worth noting that the term “Tea Party” has already become redundant in describing the Republican Party and its supporters. Although the Tea Party was originally identified as a separate movement within the Republican Party, the extreme anti-government protesters’ views—views that were, after all, already well-represented within the party’s Congressional ranks—were so quickly adopted by the leadership of the party that it soon became obvious that nearly every Republican had become a “Tea Party Republican.”
Because of this development, Republican politicians are now on notice that they must follow the extreme views of this anti-government base, or they will be drummed out of the party—as soon-to-be-former Senator Richard Lugar learned this week in Indiana.
The Roles of the House and Senate in Setting Economic Policy in a Potential Future Romney Administration
A future President Romney, therefore, would necessarily govern with the exclusive goal of pleasing his party’s radical base. Moreover, as I explained in my earlier column, we can safely assume that Romney would govern with a Republican majority and leadership in the House of Representatives that would pull him as far to the right as possible.
On some issues, the Senate would be a possible brake on Romney’s attempts to follow his party’s real leaders to the right. As I noted at the end of my last column, this dynamic could generally leave the country in policy gridlock—so long as the remaining Senate Democrats defy their own history, and their tendencies to crumble in the face of a Republican President. A filibuster-proof 60-seat Republican bloc in the Senate, on the other hand, would make it impossible for even a disciplined Democratic minority to stop the country’s lurch to the right.
The rules are different, however, for laws that affect the budget, which is the focus of this column. A 51-vote majority in the Senate is sufficient to pass legislation that is budget-related, under the “reconciliation process.” Although that process is itself restricted by other parliamentary rules, the central fact is that budget policies would generally not be subject to the filibuster.
Therefore, whereas my earlier column suggested that we would generally need to imagine a 60-vote Republican caucus in the Senate to give a President Romney free rein to follow his base’s instincts, in budgetary areas the requirement would only be 51 Republican votes—a far more imaginable outcome of the 2012 elections.
Or, to put it more bluntly, the Republican base is much more likely to get its way on budgetary issues than on any other set of issues. If Romney wins, therefore, what I am about to describe below is not merely a wish list of Republican ideas that would become reality only if the stars happened to align. Instead, passing those extreme policies into law would merely require a simple majority of Republicans in both houses of Congress.
Those reactionary policies, in other words, would be enacted in short order, after a President Mitt Romney promised to “preserve, protect, and defend the Constitution of the United States.”
Romney, Ryan, and Imaginary Numbers: The Republicans’ Budget Man Will Call the Shots in a Romney Presidency
What would a President Romney’s budgetary policies look like? That is an easy call. The most recent of a series of so-called “Ryan Plans,” named for House Budget Committee Chair Paul Ryan of Wisconsin, was passed enthusiastically by House Republicans earlier this year. Ryan is the darling of his party’s base. He was unsuccessfully wooed to challenge Romney in the primaries, and he is still being courted as a possible Vice Presidential nominee. If Mitt Romney wishes to have any success at all at dealing with his party in Congress, he will simply have to sign whatever Paul Ryan tells him to sign.
Because budgets involve both government spending and taxes, the Ryan Plan provides a window on current Republican orthodoxy about both sides of the budget. Here, I will discuss only the spending side. Indeed, even more specifically, I will discuss only the broad economic consequences of adopting Republicans’ spending cuts, when the economy still remains weak. In future columns, I will discuss the specifics of Ryan’s proposed budget cuts, and the changes in tax policy that Romney would adopt at the behest of Ryan and his acolytes.
Discussions of government budgets far too often revolve around dueling numbers, in an eyes-glaze-over assault on the attention span of even the most interested observer. Yet it is important to remember one thing about the numbers in the Ryan Plan: They are made up. I wish that there were a nice way to put this, but Ryan’s numbers are simply fiction.
As Ezra Klein explained in The Washington Post last year, when Ryan submits his budget plans to the official scorekeepers at the Congressional Budget Office (CBO), he simply tells them to assume certain things about the future. For example, he tells them to assume that his plan will slow the growth of Medicare spending—but not because there is anything in his plan that one could independently evaluate, to determine whether it would actually succeed in slowing the growth of Medicare spending. Instead, the CBO simply says that if Ryan is correct in his unsupported assertions about how his policies would change the path of spending, then one can make predictions about what the budget deficit will be in future years.
The exact numbers that Ryan and his fans toss around, therefore, are not based on independently-verified estimates of the effects of real-world legislation. They are, instead, best viewed as a combination of convenient assumptions and wishful thinking. Ryan’s numbers are, therefore, often instructive—but not for the reasons that he supposes. They are instructive because they tell us what policies the Republicans in Congress, deep in their hearts, wish that they could force upon the country—if only they had a willing President.
We need not, therefore, become bogged down in a debate over whether Policy A or Policy B will reduce spending by X percent or Y percent. What we have from the Republicans is a clear statement of beliefs and priorities, and a path to getting what they want.
Anti-Spending Extremism at the Worst Possible Time: Austerity Is Harming Europe, but the Republicans Apparently Like What They See There
As a matter of fundamental belief, nothing is more basic to Ryan and his contingent than the idea that government spending is bad. It is not merely bad, in their worldview, but also an assault on all that is good and decent in the world. It is so bad that it should be reduced as much as possible, as quickly as possible. Unless, of course, it is defense spending.
As a matter of economic management, therefore, Republicans have no patience whatsoever with the idea that the government can improve the economy by increasing spending during and after a recession or depression. Their rejection of Keynesian economics—notwithstanding its clear record of success in predicting and explaining the current economic mess, as well as pointing the way out of the wilderness—is thus complete.
This basic tenet, then, means that a President Romney would quickly enact the most radical spending cuts that any country has ever experienced. His policies would make those of Britain’s current Cameron government—which insists on continuing with its massive cuts in government spending, no matter the human and economic costs—look like a big-spending Marxist state by comparison.
Ryan’s imaginary numbers, noted above, include the amazing claim that he would cut non-entitlement spending over the next four decades by more than two-thirds. As Klein’s analysis pointed out, however, this would require that all non-defense spending be cut below zero, in order for the budget numbers to add up. Taken seriously, this would mean that there would simply be nothing left of the federal government, except the Pentagon and whatever tatters remain of the Social Security, Medicare, and Medicaid programs.
Of course, four decades is a long time. Thus, readers may ask, What would Ryan do in the short term? The Ryan budget that the Republicans passed this year would cut spending immediately to the level of spending that existed in 2008, and then freeze it for five years. Why is this radical? Because the year 2008 was the last year before the full effects of the Great Recession were felt. Thus, going back to that year’s spending levels would mean cuts in all of the current spending programs that support the large number of people who are still looking for jobs, who still need unemployment benefits to survive, who need Medicaid benefits after losing their job-related health insurance, and so on.
Going back to 2008 spending levels would also mean that these lower levels of spending would need to cover the increase in population that is part of our country’s natural growth. The immediate effects of this plan, therefore, would be felt in reductions of spending levels that are already too low to bring the economy back to life.
Moreover, there is nothing in Ryan’s rhetoric, or in that of any of his compatriots, to suggest that they would stop at these cuts. To the contrary, they have made clear that all non-defense spending is on the block, and they are merely waiting for their moment to cut, cut, cut.
If they did so, the results would be devastating. Although Republicans like to claim that we should never be like Europe, they are embracing the exact economic principles and policies that have driven the Euro Zone to the brink of collapse. As I discussed in a Verdict column this past December, the theory that austerity can be expansionary—that consumers and businesses will be so pleased by their government’s spending cuts that they will more than make up for the drag on the economy with spending increases of their own—never made sense as a theory. No wonder, then, that it has (completely predictably) failed in reality. The European Continent, and Britain as well, have been teetering on the brink of a second recession, and Britain’s economy is actually recovering from the Great Recession more slowly than it did from the Great Depression of the 1930’s.
Moreover, the results of the failure of expansionary austerity are tearing at the political and social fabrics of Europe. In a reassuringly democratic development, the French have voted austerity adherent President Nicholas Sarkozy out of office. He will be replaced by Francois Hollande, a left-of-center (but completely mainstream) career public servant, who sensibly has questioned the wisdom of austerity at a time when unemployment rates in many Euro Zone economies are over twenty percent.
Greek voters, by contrast, were offered no mainstream alternatives, because all of the centrist politicians in that country had signed on to the austerity program that was being imposed upon them by Germany and France. Greece’s voters thus were left with nothing but extremist choices on the right and on the left. We are hearing rumblings from other parts of Europe as well, where neo-fascist and anti-immigrant movements are gaining ground. (Even within France’s peaceful rejection of Sarkozy, the far right has gained at the polls.)
Electoral Accountability Versus Ideological Fervor: Will Europe’s Woes Slow the Republicans Down?
With these cautionary tales coming from Europe, would a President Romney take heed and moderate his views, forcing his party to accept less than total victory over Big Government? While this year’s Presidential campaign is still ongoing, we are sure to hear reassurances from Romney and his supporters, telling us that he will respond reasonably to any changes in economic conditions.
We should not believe it. Again, Romney would not be in charge of the country; Ryan and his supporters would be. The one thing we have learned since they gained the majority in the House, eighteen months ago, is that they are not interested in listening to the voices of moderation.
The debt-limit crisis last summer was the best example of this ideological rigidity. There, the party’s hard-liners actually held out the possibility that they would rather have the United States default on its obligations than increase the debt ceiling. And readers should recall that the debt ceiling is an entirely symbolic statute, unnecessary to achieve the supposed goals of deficit reduction that the Ryan forces claim to hold dear. (It is also worth noting, however, that nothing in Ryan’s plans—other than simple assertions on his part—adds up to deficit or debt reductions. His spending cuts would be more than offset by his tax cuts for the rich and corporations.)
Moreover, the “accountability moment” elections provide is only meaningful if it is possible for disaffected voters to vote out the people who are responsible for their pain. Everything in the Republicans’ actions over the last decade or more indicates that they are trying to insulate themselves from voters’ ire.
In short, we should not count on the standard political calculations, or politicians’ own sense of self-preservation, to save us. If anything, Romney’s bosses have shown that they will respond to adversity by intensifying their efforts, making matters worse for everyone involved.
That is, bizarrely, not even necessarily a bad political strategy, for if they held to that plan, they would then be able again to become the “out party,” during a time of economic distress. A party that is willing to blame President Obama for a recession that began before he took office would surely be willing to take what it can while it is in office, and then, once again, blame the results on the other side.
The world that Mitt Romney would preside over, therefore, would be one of increasingly desperate economic straits. More and more workers would lose their jobs, and the answer from President Romney and his masters would be more spending cuts, and more tax cuts for the most financially comfortable people in America. In contrast, President Obama, if he wins re-election, would be likely to continue to move too slowly to truly fix the economy, but he would, at least, not embrace policies that would make matters worse. (Admittedly that is not an enthusiastic endorsement of Obama’s policies. That, however, is hardly the point.)
An honest assessment of what Romney would do as President, therefore, reveals that he would actively participate in an economic plan that would bring pain to millions of people, with little hope of Congress’ stopping him before (or even after) it is too late. One can hope that Romney, if elected president, would somehow rediscover the value of changing his mind, but under the circumstances, the best guess is that—put to a choice between feeding his anti-government base or mitigating economic disaster—Romney would make a bad situation much, much worse.