The Art of the Possible
posted at 11:25 am on November 23, 2011 by Karl
At New York magazine, Jonathan Chait asks, “When Did Liberals Become So Unreasonable?“, while David Frum asks, “When Did the GOP Lose Touch With Reality?” After accounting for the bias inherent in putting up Frum to write about the right, a common theme emerges, i.e., movement ideologues are almost invariably disappointed by the failure of the parties to sufficiently enshrine their respective ideologies in policy (Note: I’m not using ideologue as a pejorative, but to distinguish movement-types from basic partisans). This happens for a variety of reasons, from petty corruption to the checks built into our Constitution.
This is the basic backdrop against which my recent back-and-forth with Ramesh Ponnuru occurred. He and I are in basic agreement that Republican losses in 2006 and 2008 had much less to do with the GOP being insufficiently conservative than with the deteriorating popularity of invading Iraq and the deteriorating economy (underscored by the Wall Street panic of ’08). We disagree over whether a different policy emphasis would matter much. Ponnuru’s examples tended to be drawn from 2000 and 2004 — very close elections in which many factors may be argued to have mattered. In 2012, the economy is likely to be so dominant an issue that second-tier issues are unlikely to be decisive.
I suspect we may also disagree about the degree to which Ponnuru would be disappointed if the GOP took his advice on wage stagnation and policy appeals to the middle class.
One of the most obvious reasons for wage stagnation is the growth of health care costs. Ponnuru backs disconnecting health insurance from employment, but realizes how many people would resist that big a change to their health insurance arrangements, just as they resisted Obamacare. Thus, he backs an incremental approach offering an insurance tax credit to those not covered by their employer.
However, when Ponnuru writes about appealing to the middle class, he occasionally advances a more ambitious policy of expanding the child tax credit from $1,500 per child to something closer to $5,000. This is taken from a proposal by Jacob Stein, who proposed raising the credit to $4,000, offsetting both income and payroll taxes of middle-class families. Ponnuru’s column did not price the policy, but Stein estimated his lesser version as reducing revenue by about $200 billion per year. Like Stein, Ponnuru would make up the difference by eliminating tax breaks and lowering the floor on the top tax bracket.
But a little cocktail napkin math suggests the difficulty of turning that proposal into law. Stein’s proposal is roughly $2 trillion over a decade; Ponnuru’s would exceed that by a non-trivial amount. Most of the budget reform plans (a la the Simpson-Bowles recommendations) get only about half that amount from eliminating tax breaks. So the other half has to come from tax increases, which may explain why the GOP hasn’t jumped on the proposal (while the Dems need the revenue from eliminating tax deductions to stave off entitlement reform).
Stein acknowledges that “[g]iven the loss of the state and local tax deduction, his proposed tax hike will hit upper-middle-class taxpayers who do not have children in the home and be particularly acute for high earners from high-tax states.” I could cynically chuckle at the degree to which this sticks it to Blue state demographics. But if I was being cyincal, I would also recognize that upper-middle class professionals are a demographic the GOP would like to wrest back from the Democrats, and that it’s a demographic that disproportionately votes and donates. Moreover, the elimination and/or scaling back of the tax code’s vast web of deductions presents the basic political problem Ponnuru recognized when he was faced with just the tax-deduction for employer-provided health insurance, but multiplied.
In sum, if GOP candidates stopped tossing out red meat proposals to eliminate the EPA and started pitching Ponnuru’s proposals to address the concerns of the middle class, we might find selling and enacting the latter not all that much easier than enacting the former.
I make this point not to elicit another round with Ponnuru myself, but to suggest it as a useful basis for wonks to better understand and dialogue with people like Stacy McCain. The other McCain, rebutting Frum, nods in the wrong direction of blaming George W. Bush’s compassionate conservatism for GOP losses in the 2006-08 period (though he rightly gripes that movement ideologues take too much of the blame for Bush’s more statist impulses). And McCain is too glib in his view of the invasion of Iraq (though there’s certainly a case it was not conservative, there’s also a case against too much hindsight). But McCain has a stronger point:
Frum is a wonk very much concerned with the question of what legislative and policy initiatives can be feasibly enacted (and politically defended) by Republican elected officials. That’s a very different thing than declaring, broadly, what the ultimate objectives of the conservative movement should be.
Although I much prefer Ponnuru over Frum as wonks go, it’s a point Ponnuru should consider. As McCain notes, progressives (and Democrats) have pushed socialized medicine for well over 50 years, even though it’s not a popular plank — and get big bites like Medicare or Obamacare when the historic opportunity presents itself. Conversely, McCain may want to rethink his disdain for more incremental reforms of bureaucracies he opposes on principle, as progressives and Democrats work hard on smaller increments when historic chances are not present — and even then, enacting incremental reform can be tricky.
Ideologues should expect to be disappointed. Wonks should expect ideologues to be disappointed. Both should expect to be disappointed with each other. That sort of acceptance ought to help keep the focus on the far worse alternative presented by the left.
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