In 2012 Democrats Will Run as Defenders of the Welfare State – Beyond Spending Cuts, Republicans Have to Make a Case That Small Gov. Works Better – Examples from Indiana, New Jersey, Virginia

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By Paolo von Schirach

May 26, 2011

WASHINGTON– The Republicans just lost NY-26. This used to be a safe House seat in up state New York. This defeat happened largely on the basis of the Democrats’ strong opposition to the Medicare radical reform plan presented nationally by the Republicans. True enough, Democrat Kathy Hochul did not win by a huge margin, (only a 47% plurality), while Republican Jane Corwin was hurt by Jack Davis, a third party candidate claiming a Tea Party allegiance, who syphoned off 9% from the Republican vote. Karl Rove commented in The Wall Street Journal that it was this unfortunate combination, and not the Medicare issue, that cost the Republicans this safe seat.

Medicare the issue?

Well, the Democrats have an entirely different reading. As they put it, it was all about “Medicare, Medicare, Medicare”. The Republicans –this was the message– want to take it away from you, the Democrats want to keep it for you. The emerging conventional wisdom is that this New York state upset is an indication that the Republican plan for Medicare is so scary that even conservative voters lean towards the Democrats. Repeat the NY-26 results nationally and you got another major electoral upset in 2012, with the Democrats retaking the House.

Difficult to make national extrapolations from one House race. But I believe that the Republicans need to do a lot more work to convince the general public that: 1) Radical Medicare reform is absolutely necessary, as the system will be broke soon; 2) Their reform plan is the way to go. So far, I see no indication that they know how to do this. I also see no Middle America appetite for a radical overhaul of such a key retirement benefit. Very simply, nobody “sees” the federal deficit; for most its is still an abstraction. Everybody “sees” very tangible Medicare benefits.

Pundits think that the Republicans have a strong platform

But some pundits think instead that a GOP bent on serious fiscal reform has excellent electoral chances. Daniel Henninger of the WSJ, (The Building Blocks of a GOP Agenda,May 26, 2011), gives an upbeat prognostication about future Republican success on the basis of spending cuts implemented at the state level by capable Republican Governors such as New Jersey Chris Christie, Indiana Mitch Daniels; and now newly elected John Kasich in Ohio and Scott Walker in Wisconsin.

Henninger’s point is that these elected officials are working to shrink bloated and unaffordable state governments in order to recreate fiscal health as the necessary precondition to restore the fundamentals for economic growth. Downsizing government and reducing taxes are going to be the building blocks of a national political agenda to be embraced and carried forward by whoever the Republican nominee to run against Barack Obama in 2012 will be.

Fiscal rigor, no taxes is not enough for a national agenda

This is all well and good. I am totally in favor of re-establishing fiscal sanity. Looking at our monstrous yearly deficits and at the accumulation of more and more federal debt, we should all be in favor of cutting spending, including entitlements reform, as most of the federal money goes to entitlements.

That said, I am extremely skeptical that “the fiscal probity theme” is enough to build enthusiasm around a Republican platform. Cutting spending is absolutely necessary. But this cannot be the core of a governing platform.

True enough, Ronald Reagan run on a similar platform in 1980, “Get the government off the back of the people”. But at that time it got traction because it was bold and new. And the issue was not the deficit. The issue was a conservative revolutionary wave that wanted to do away with liberal thinking.

The Reagan Revolution was different

Reagan could say that he was the reformer that would dismantle the oppressive machinery of the state in order to unleash the productive potential of millions of Americans. This was new talk. And it sounded intriguing. By slashing and killing the federal monster, Reagan could restore the American Dream to its proper station and glory. And so he won in 1980 and again in 1984.

But at that time all this neo-liberism –and indeed the first version of neo-conservatism– were all new. The Republicans appeared to be the party of new ideas. The Reagan/Conservative Revolution was about a deep rethinking and reappraisal of the role of the state and especially about debunking the liberal conventional wisdom asserting that “Big Government” is good that had been accepted for decades as “the truth” by the larger part of the American cultural establishment.

We cannot repeat the Reagan experience, it will not be new now

The point of this historic reference is that we cannot do a Reagan Revolution again, because we have already done it once. And, by the way, whatever the faithful may claim, it did not work as advertised. The Federal Government was not defeated by Reagan. Whereas tax cuts, without matching spending cuts, gave us the first taste of large federal deficits. And then the Revolution was diluted. After Reagan it was George H. Bush. But he lacked the credentials of a believer. And then 8 years of Bill Clinton, to be followed by George W. Bush who could not be considered a disciple of Ronald Reagan. He allowed profligate spending without any regard for deficits. And finally, under Republican stewardship we have had the most colossal financial disaster since the Great Depression shaking any confidence in the Republicans ability to run anything at all.

Ronald Reagan looks awfully far away, after all what happened, and his model and legacy hard to recreate. And, most fundamentally, Reagan’s small government ideas –at the time– looked new, revolutionary and exciting. The painful cuts proposed by his current would be Republican disciples look just painful.

A national platform needs an invigorating plan

While fiscal rectitude may be a good currency at the state and local level, at the national level Americans want to believe in someone who says something new and energizing. Small government and no new taxes alone just will not do it.

Not to mention the fact that, as things are shaping up, while Obama will have to defend his record, now he is also the self-appointed defender of the welfare state against the insane and mean spirited attacks of the Republicans. This is a bonus handed over to him by the House Republican budget blueprint.

Fiscal rigour versus populism

Sensible people should recognise that the Republicans are serious about fixing public finances, while the Democrats are demagoguing on this, using scare tactics to convince people that if the GOP wins it will throw widows and orphans in the snow, just to save a penny, while giving tax brakes to their millionaire friends. If you think that people will see through this attempt to muddy the waters and choose the sensible economic rebuilding platform proposed by the GOP, I think you are a real optimist.

Magic trick: show that small government really works better

The real magic trick that the Republicans should be able to produce, on the basis of real facts, is that their smaller, streamlined government really works better. Yes, lean Government under competent stewardship delivers higher quality services at a lower cost. Yes, you can be lean, and smart and capable and truly serve the public interest, all at the same time. Can such a case be made between now and November 2012?

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