Three Irreconcilable Fiscal Majorities

David FrenchIf we've heard it once, we've heard it a thousand times. "Washington is broken." Given the gift of the most prosperous and powerful economy in human history, our politicians somehow created an unmanageable fiscal monster. Despite (or because of?) high taxes, we have extraordinary deficits at the federal and state level, with some of the highest tax states facing the worst crises. And the fingers point everywhere. Public pensions bust the budget. Millions of soon-to-retire Baby Boomers bust the budget. Health care busts the budget. The Bush tax cuts bust the budget. An almost decade-long war busts the budget.

While partisans squabble over the policy causes of our problems, everyone seemed to agree that it was Washington's fault (Congress hit record lows in approval through bipartisan revulsion). So we tossed the bums out, placed the Speaker's gavel in not-exactly-new hands, and now the airwaves are ablaze with vows to hold the new majority accountable—to make sure that they serve the great and good American people in a manner that befits, well, our greatness and goodness.

Here's a prediction: The new congress will land in Washington and discover the same reality that faced their "revolutionary" predecessors, pass budgets that don't differ dramatically from the budgets that came before, and pray fervently that the mighty American economy pulls their chestnuts out of the fire.

And why won't this congress be much different from the last? Because we the people are not much different. Because our three great fiscal majorities have not changed, and those three great fiscal majorities—not Congress, not the president, and not "Washington"—are leading us to ruin.

First, it is absolutely clear that a majority of Americans do not want tax increases. I know that some will counter that "tax increases for the rich" poll well, and I know that some deep blue congressional districts never met a tax they didn't like, but on the national scale, tax increases are almost always unpopular. Ask Walter Mondale. Ask George H. W. "Read My Lips" Bush. Ask Bill Clinton, whose party got crushed in the 1994 mid-terms shortly after he passed his own tax increase.

Second, it is similarly clear that a majority of Americans are at least concerned with deficits, with the level of their concern waxing and waning depending on underlying economic conditions. But few Americans will admit to being untroubled by national debt, and fewer still in today's Tea Party era. Obama deficit charts have rocketed around the Internet, and stories of European fiscal meltdowns have only heightened anxiety. Big deficits are bad, and (almost) everyone agrees.

Does anyone see inconsistencies between the first two majorities? Some would say yes, that a nation can't lower deficits without raising taxes. I say that you can, that lower taxes and lower deficits are entirely possible, entirely responsible, and that we can achieve such a reality through responsible spending cuts. But this argument runs headlong into the third fiscal majority, the entitlement majority.

A majority of Americans do not want to see their own government benefits cut, limited, or eliminated, and since a majority of Americans receive one or more tangible government benefits, the entitlement majority may be the most enduring majority in American politics. Yes, I know, we all have our arguments why our particular entitlement should be sacred. The mortgage interest deduction incentivizes homeownership. Seniors paid for their Social Security. A humane society provides health care for the poor. The list of justifications is as long as the list of entitlements, and huge swathes of the American electorate guard their fiscal territory with pit bull aggression.

Liberal commentators often derive great joy watching conservative budget hawks squirm when confronted with a seemingly simple question: "How, exactly, will you cut spending?" Conservative activists scream at the television screen: "Say you're going to raise the retirement age! Say it!" But the budget hawk remembers how Bill Clinton took Republicans to the woodshed when they proposed limiting Medicare's growth—not cutting the program, mind you, just limiting its growth.

We simply can't have our benefits we want, low taxes, and a balanced budget. To be sure, it wasn't so long ago that we ran a budget surplus, and we ran one without having to make many tough choices. But how? There was, of course, a Republican congress pressing a Democratic president to limit spending growth, but how important was politics compared to peace (the end of the Cold War), prosperity, and a high tech bubble?

1/10/2011 5:00:00 AM
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    About David French
    David French is a lawyer, writer, soldier, and veteran of the Iraq war. He is Senior Counsel at the American Center for Law and Justice. Follow him on Facebook.