Republicans never learn.
In 1982, Reagan raised taxes, and was promised cuts over the next six years to balance the deal out…cuts that never really became real. Reagan stated quite clearly in his autobiography “An American Life” that he would happily compromise with Democrats if he could get 75 or 80 percent of what he wanted…and that is exactly what he did. However, Reagan later clearly explained he did accept tax hikes “in return for [the Democrats’] agreement to cut spending by $280 billion,” but, Reagan continues, “the Democrats reneged on their pledge and we never got those cuts.” Some liberals, and others like David Stockman, counter today that there were no spending cut promises in that plan…but that seems to be a rewriting of history more than any true explanation of what occurred at that time.
In 1992, George H.W. Bush was forced into a tax increase, where House speaker Tom Foley (D., Wash.) and Senate majority leader George Mitchell (D., Me.) promised to cut spending by $274 billion over the FY1991–1995 period. Of course, those cuts never occurred, and it took the 1994 Republican Revolution to wipe out Congressional Democrats to allow the cuts from beginning to occur.
The lesson learned? Tax increases are real; spending cuts, unless they are done first, are always illusory.
So we enter 2013, and we are in somewhat a similar predicament. Barack Obama demands tax increases for the top earners; something that doesn’t promote economic activity in any economic theory, either liberal or conservative. The demand is purely ideological, but here we are.
And Republicans are willing to give in…without any strings attached. Charlie Brown, meet Lucy and her elusive football.
I am a realist. I understand that the control of the Democrat Party is in the hands of idealogues, not pragmatists, and that is why the current tax demand from the President is what they will fight for, to the death. And because of their intransigence and stubbornness, we will probably have to allow taxes to increase.
But it should come at a price. The GOP is spending their time eating their own, instead of agreeing on the price that Obama must pay to get what they want. We have Sen. Bob Corker accepting tax increases, without clearly stating what he needs in return. We have Grover Norquist attacking everyone that is trying to avoid the cliff. We have Sen. Jim Demint attacking Speaker John Boehner as he exits Congress, without providing any answers along the way.
The Republicans need to get their act together. This debating in the public arena weakens the conservative cause across the board. As it is, we are in a precarious position as a party and as a political movement. And to compound that, our leaders are making the situation worse by appearing petty and vindictive, and unable to rise above their own political goals for the greater good.
I am no fan of tax increases. It will do damage to this weak economy. Democrats are fooling themselves. They believe that the Clinton tax increases of 1993 didn’t harm the economy, and actually led to the great economic revival of the 1990s. Nothing could be farther from the truth. GDP growth throughout 1992 was over 3.4%. When the Clinton taxes were enacted retroactively to January 1993, it slowed the recovery, with lower GDP growth rate through out 1993 of 2.9%. We did rebound somewhat in 1994 with a growth rate around 4% but slowed again in 1995, but it wasn’t until 1996 (after the GOP tax cuts came into effect) that steady growth over 4% lasted through out the rest of the decade.
But the reality is we face higher taxes either way. If we do nothing, the Bush tax cuts expire. So, the question is, do we get something in return for increasing taxes, or nothing at all? Our goal should be long term deficit control. I would like to focus on the economy by reforming taxes and decreasing rates, but Obama makes that an impossible task…so we should focus on what we can accomplish, and not languish in a debate about what we cannot accomplish. And we should do so with clear, immediately provided demands…no future promises to play games with. If Obama wants a tax increase today, he has to provide for entitlement and spending cuts…today.
Come on, Republicans…pick a position, any winnable position. Then stand by that position as a united front…or fall apart as a divided and broken movement. No more of being the Charlie Brown Party.
This was cross posted at Neoavatara.