With the second session of the 112th “tea party” Congress about to begin, let’s recall how the first session opened a year ago — with members reading the Constitution aloud for the first time in history. Could it be, tea party folks imagined, that Congress might at last begin restoring constitutionally limited government? A year later — after battles over the budget the previous Congress hadn’t passed, over raising the debt ceiling, and finally over the FY 2012 budget, following the collapse of the misbegotten super-committee — the session ended barely before Christmas with the payroll tax debacle, the House caving to the Senate’s two-month extension of the payroll tax “holiday.” So inconsequential was that ending that it made April’s 2011 budget compromise, more than six months into the fiscal year, look positively grand, even though it cut “baseline” spending from a $3.6 trillion budget by a mere $38 billion. Tea party folks in and out of Congress are today dispirited. They shouldn’t be, not if they’re in for the long haul, which is what it’ll take.
Let’s start by noticing that for the first time in years, the 2012 budget of $3.65 trillion is essentially flat over the 2011 figure. For Washington, that’s progress, even though few programs were eliminated. But meager as it is, if it’s to blossom into serious checks on out-of-control government, it’s going to take a fundamental shift in popular conceptions about the very role of government, and that won’t happen overnight. Right now, we’re a deeply divided people. The 2008 “hope and change” election brought neither. The 2010 “correction” propelled huge numbers of tea party people into offices across the country, suggesting an ideological shift might be underway. But in Washington it changed only the House, leaving Congress divided and gridlocked. So look for even less coming out of the second session than the first, but that’s all right; there’s other work to be done.
It’s no accident that budgets, federal, state, and local, so dominated our politics over the past year. Burdened by deficits and debt, they speak of nothing so much as a nation in denial, as The Washington Post’s Robert J. Samuelson put it — fittingly on Christmas Day, when Santa comes. Given our something-for-nothing culture, he wrote, more Americans than ever are now dependent on government: federal spending on individuals grew from 26 percent in 1960 to 66 percent in 2010. Yet the tax burden, he notes, has barely budged, going from 17.8 percent of GDP in 1960 to 18.5 percent in 2007. Still, thanks to falling military spending and a growing economy over most of this period, politicians were able to distribute more benefits to more people without raising taxes. But now, with a stalled economy, an aging population, and a federal debt of over $15 trillion and growing, the “giveaway” days are over, he says. Politicians now face “takeaway” politics — reducing benefits or raising taxes to prevent destabilizing deficits.
Sober as Samuelson’s assessment is, it seems to accept the need to raise taxes, despite countless economic studies that show the folly in that. As with debt and inflation, the two other ways governments raise money, there are certain “natural” limits to taxation. W. Kurt Hauser has famously shown, for example, that in postwar America, tax revenues as a percentage of GDP have averaged just under 19 percent regardless of the top marginal personal income tax rate. So much for the Obama and “Occupy” tax-the-rich agendas.