April 13 (Bloomberg) — Grover Norquist, the tax-cutting champion, famously said he wanted to shrink the federal government “down to the size where we can drown it in the bath tub.”
With gargantuan deficits, that seems like a pipe dream, but it may be time to start running the water.
The new plan offered by House Budget Committee Chairman Paul Ryan and approved recently by Mitt Romney and congressional Republicans puts the Republicans on record supporting a federal government that within a decade will consist of little more than national defense, entitlements and interest on the national debt.
Those are largely transfer payments to defense contractors, seniors and bankers. The rest of what the government actually does would be eviscerated, from building roads to environmental protection to medical research.
Ryan has abandoned the Republican fantasy on display during the primaries that cutting liberal spending programs will be enough to restore fiscal sanity. He’d go where the big money is — entitlement reform — and also eliminate a series of tax deductions used by the affluent, though in an April 10 editorial board session with Bloomberg View he was still mum on which ones.
Let’s stipulate that Ryan is right to start means-testing entitlements (reducing them for the wealthy) and to consolidate duplicative programs in areas like job training and pre-school.
But to make his numbers work, merely reforming government functions won’t be nearly enough.
For all the noise in recent days about his plan’s impact on Medicare (a voucher option), taxes (big new reductions for millionaires), and fiscal sanity (no balanced budget for decades), the cutting of the non-defense discretionary portion of the budget may be most consequential. According to the Economic Policy Institute, the plan would reduce discretionary spending to 2.1 percent of gross domestic product by 2022, less than half of its average level under Ronald Reagan.
Liberals spent years crying wolf when the rate of increase in a spending program didn’t keep pace with inflation. Now that the wolf is at the door and many of these programs face elimination if Romney wins, will the public listen?
Are we really talking about the elimination of broad swaths of government services not to protect our children from mountains of debt but to help offset another tax cut for the wealthy? Yup.
If the pain of the Ryan plan was spread across all spending except defense, Social Security and Medicare (the most likely political outcome should the plan be enacted), every other government program would have to be cut by 38 percent by 2016 and 56 percent by 2022, according to the Center on Budget and Policy Priorities. Since some programs (say, air-traffic control) obviously won’t be cut in half, others (mostly for the poor, who would bear more than 60 percent of the cuts) will have to be zeroed out.
No one, for instance, expects the earned income tax credit, the most successful anti-poverty idea in a generation (enacted in 1975 under Gerald Ford and significantly expanded by Reagan), to survive a Republican takeover of Washington. God forbid the working poor continue to get a little help.
These savage cuts, only now coming into public view and perhaps too abstract to resonate, are at odds not only with the aspirations of a great nation but with the history of the Republican Party, long committed to planting seed corn.
The Republican Party was born in 1854 in opposition to slavery in the territories, but from the start it supported what Federalists and Whigs (the party’s predecessors) throughout the 19th century called “internal improvements.” Today, Democrats call these programs “investments in the future” and Republicans call them “wasteful spending.”
The 1856 Republican platform demanded that “the Federal Government render immediate and efficient aid in [the] construction” of a transcontinental railroad. Money was also pledged for “the improvement of rivers and harbors.”
Soon thereafter, Abraham Lincoln signed laws creating hundreds of new colleges (the Morrill Land Grant Act), helping Americans buy property (the Homestead Act), establishing a new Cabinet department (Agriculture) and protecting public land from development (Yosemite).
Today’s Republican Party is on the other side of each of those Lincoln-era achievements, voting to slash money for education (Pell grants, which are discretionary, would be eviscerated in the Ryan budget), withdraw federal loans to buy property (closing Fannie Mae and Freddie Mac), shut Cabinet departments (Romney has said he’d shutter a few, though not which ones) and open up more coastlines for drilling.
The idea of using government money to invest in the future hardly died with Lincoln. Theodore Roosevelt built the Panama Canal; Dwight Eisenhower constructed the interstate highway system; and Republicans have voted for smaller such investments repeatedly over the years.
Even in 1964, when Republicans nominated conservative Barry Goldwater for president, the party platform made it clear that the tax cuts it promised would only materialize “as fiscal discipline is restored.”
Richard Nixon supervised the regulatory apparatus now scorned by conservatives and Reagan agreed to raise taxes several times.
When I raised this history of government investment with Ryan, he replied with a lukewarm endorsement of basic research (though without saying it would be spared the knife) and an easy talking point about Solyndra LLC, the now-bankrupt solar company that had received a federal loan guarantee of more than $500 million.
I’d be more inclined to give him credit for helping to open a big, consequential debate if I weren’t so worried that a lot of what he proposes will actually be enacted in 2013 if Romney wins. Republicans see victory this fall as a mandate for the Ryan plan and wouldn’t hesitate to employ the reconciliation process in the Senate to ram it through, give or take a few impossible-to-close tax loopholes.
Won’t Republican members fight for spending in their districts? Not necessarily. The old model of bringing home the bacon has been replaced by bringing home the tax cuts. If the Republicans win in November, the pork barrel becomes a bath tub.
(Jonathan Alter is a Bloomberg View columnist and the author of “The Promise: President Obama, Year One.” The opinions expressed are his own.)
