The tea party Congress comes of age

Roger Pilon Vice President for Legal Affairs, Cato Institute
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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.

The focus shifts necessarily, then, to spending — and to growing the economy. And the two are intimately connected, because apart from spending on truly public goods like defense and infrastructure, money is spent far more efficiently in the private than in the public sector, generating more wealth for all — and more taxes besides, which is the only way ultimately to reduce the debt. Thus, the tea party House was right last year to resist tax increases and focus instead on government spending — and right too, mostly, to resist the Beltway’s siren song of compromise, which ordinarily means a one-way ratchet for more government.

But not always, and there’s the rub. It’s easy to be frustrated with the pace of change in Washington. That seems to be what happened in the House just before Christmas. As syndicated columnist Charles Krauthammer put it, however right members were on principle when they resisted the Senate’s two-month payroll tax extension, “this was absolutely the wrong place, the wrong time, to plant the flag. Once Senate Republicans overwhelmingly backed the temporary extension, that part of the fight was lost. Opposing it became kamikaze politics.” In fact, it gave the president and the Democrats the tax issue they hadn’t had in decades.

Which brings us back to where the House began its year, with the Constitution. The Framers may not have been econometricians, but they understood basic principles of political economy. They’d read the ancients and the moderns, Plato and Aristotle, Locke, Hume, and Smith, men who knew the democratic potential for majoritarian self-dealing and, ultimately, self-destruction. That’s why they wrote a Constitution that checked those tendencies by limiting the scope of government’s concerns and powers. Little of life was meant to be lived in the public sector, where some measure of material and regulatory redistribution, for the provision of public goods, was unavoidable. We were meant to be free, not government dependents.

We’ve abandoned that vision, of course, mostly since the New Deal, which instituted the big-government ideas Progressives had been promoting for over 40 years. But right there is the point that members of this tea party House need to grasp as they begin their second session: ideas matter, because ultimately they determine the course of human events.

Thus the lesson of the first session is that these budget battles, given the intransigence of the other side, cannot be ends in themselves: rather, they’re means, to be used in the real game, which is to change public opinion, to move Americans from an entitlement mindset to an independent one. Every budget battle, win or lose, is an opportunity to educate the public about the real game going on in Washington. But the game has to be played in public, not behind closed doors, as is Washington’s way. And members have to take the long view, every decision looking not only to November but far beyond. We won’t reverse course, much less restore limited constitutional government, in one session of Congress, or even over several Congresses. Indeed, the deeper political question is whether we’ve reached a tipping point, where so many people have become so dependent that it’s unrealistic to expect them to vote against their immediate interests. We shouldn’t believe that, or there’s no hope.

Other countries have recently had significant course corrections, and over relatively short periods — New Zealand, Canada, even Sweden. As parliamentary systems, they’re able to respond more quickly to political shifts than we are. But our system too, even if slower, rests ultimately on popular support, which is why the public debate should be the main focus. Fortunately, the House has already begun that debate. It’s no longer about how much to increase but how much to reduce spending. In Washington, that’s a sea change. But it’s only the beginning.

Roger Pilon is vice president for legal affairs at the Cato Institute and director of Cato’s Center for Constitutional Studies.