The Free Market 13, no. 3 (March 1995)
The Republican leadership and their advisers are confirming Murray Rothbard’s doubts. Writing in the Washington Post, Rothbard noted the vast ideological divide between the voters and those who control the Republican Congress. His prediction: the leadership will defend the old order of government control even as its legitimacy is unraveling. The revolution was betrayed, he said, even before the Republicans took control.
Since his article appeared, the Republican elites have thwarted the will of the newly elected backbenchers who campaigned against Washington. In only a few short months, the leadership has worked to sustain Leviathan and all its works, both foreign and domestic, under a new philosophical pretense.
Trade and Empire. The first bad sign appeared days after the election. Reeling from his party’s defeat, Clinton—backed by the banking, media, and corporate establishment—demanded that Congress ratify the Gatt treaty establishing the World Trade Organization to manage the international trading system. It was both economically unsound and extremely unpopular, facts which provided the political and economic reasons to say no.
Clinton had tried to force a vote before the election, but as part of their pre-electoral charade, the Republicans blocked it. To fool the voters, Newt Gingrich and Robert Dole even hinted that they opposed the WTO.
The election confirmed the voters’ desire for an end to insider rackets like the WTO. But within days, the Republican elites—with ideological cover provided by D.C. think tanks dependent on political approval—told the administration they wanted the vote taken before the new Congress assembled. So in a lame-duck session, they shoved through the most unpopular trade treaty in several generations.
Expanding Civil Rights. The Congressional Accountability Act, which applied all labor and business law to Congress, passed unanimously, which is a good sign that something was wrong. People have pointed out Congress’s exemption from these laws for years. But the purpose was to highlight their hypocrisy and repeal bad laws. The Republicans reversed the logic and not only did not repeal them, but expanded them to apply to the entire legislative branch.
At the same time, no one pointed out the historic reason for the exemption: to preserve the separation of powers as conceived by the founders. These laws are enforced by the executive department. Think of how businessmen quake when they receive letters from the safety and labor authorities. Congress is now in a similar position, thus introducing the possibility of legislative blackmail by bureaucrats. Congress won’t spend its own money on fines, thus lessening executive-branch leverage somewhat, but the accusation of discrimination alone causes pressure groups to swing into action.
Welfare for Immigrants. After California’s Proposition 187, which sought to cut off welfare to illegal aliens, passed by a two-to-one margin, many Republicans vowed to do the same at the national level. It was all set: Republican welfare legislation would eliminate handouts to non-citizens. Then Newt Gingrich and the Senate leadership popped up to declare this line of thought to be “anti-immigrant”—as if cutting off welfare subsidies is the same as hating people.
Whatever the final outcome, this incident is more important for what it tells us about the leadership’s true commitments. What kind of conservative would pass out taxpayer largess to anyone stumbling across the border?
Balanced Budget. The first hundred days were supposed to be cut and slash time. No program would be spared. Instead, Gingrich led the party off on a wild goose chase to amend the U.S. Constitution. This sends the wrong message: it implies that the reason for high government spending and deficits is a defect in the Constitution. Moreover, if such an amendment worked to the disadvantage of the government, it would be ignored, just as the 2nd, 9th, and 10th amendments are swept aside. But if it became an excuse to raise taxes, it would become the most scrupulously followed part of the Constitution.
Taxes. The first item on the Republican agenda was supposed to be large cuts in income and capital-gains taxes, and an increase in the tax deduction for families with children. Clinton wised up after the humiliating election and proposed his own package to increase deductions for children and their college tuition.
For a brief moment, it appeared that a tax-cut bidding war was in progress. But Republican chairman Haley Barbour “outmaneuvered” the administration by calling off all discussion of tax cuts. The party would “pay for” future tax cuts with spending cuts now. Meanwhile, spending hasn’t been cut, and thus tax cuts can’t be “paid for.”
Tenth Amendment. “States rights” are all the rage, but the Republican elite is attempting to co-opt the grass-roots movement to bring back the 10th amendment. Instead of genuine federalism, where the people of the states answer to the feds only in rare cases, Congress gives us cosmetic changes in how governments themselves are regulated. And Dole’s 10th amendment bill not only exempts all civil-rights laws and those involving “safety” and “health,” it only slightly lessens regulatory burdens on governments, and not at all on businesses, colleges and universities, and individuals.
A related issue is “unfunded mandates” that the federal government (mostly under Republican administrations) has imposed on the states. Nobody is talking about repealing those mandates. The most “extreme” idea proposed by any leading Republican has been to fund the mandates through more spending.
Abolishing Agencies. No budget cut is permanent until: a) the agency goes out of business, b) its functions are not picked up by another agency, and c) the government stops spending money (including in the form of “vouchers” or subsidies to non-profits) to perpetuate the program. That means, for example, that if we want cuts in government spending on housing, we should abolish HUD, take its functions out of the government’s hands, and forbid any agency from issuing, say, housing vouchers.
But the Republican elites are doing everything to avoid dealing with this truth. Their welfare reform gives money to the states, but does not spend substantially less at the federal level. All agencies would survive and the injustice of forced redistribution would continue. Some people have talked about getting rid of HUD, but dispersing its functions to other agencies. Meanwhile, Congressional elites permit no discussion of abolishing whole regulatory agencies.
Mexican Bailout. In the secret White House meeting following the collapse of the Mexican peso, Republicans and Democrats agreed to a $40 billion bailout. Clinton calls it “co-signing” a loan, but most people wouldn’t do that for anyone but a family member, because the co-signer must be willing to be stuck with the entire tab. Plus, it’s not the politicians’ money at stake; they are co-signing a loan the taxpayers must pay.
It wasn’t Al Gore or Bill Clinton who pushed hardest for the bailout. Paul Gigot of the Wall Street Journal says that Newt Gingrich was Mr. Peso. Recall that he was also Mr. Nafta, and shoved through the treaty that first linked the two governments and currencies.
No issue better symbolizes the perfidy of the Republican elites and the reticence of the backbenchers to go along. Some freshmen assembled at a press conference to point out they did not get elected to bailout a corrupt, bankrupt, and socialist foreign regime. In doing so, they gave up any chance of favors from the leadership or advancement within the Congress. Good for them: they have less at stake.
Military and Technology. The Republican elites are pushing for a $200 billion boost in military spending to make up for Clinton’s “gutting.” Yet where are the threats? Surely the usefulness of more bombs has declined markedly with the Cold War over, if not for military contractors then certainly for the general population.
Military profligacy contradicts the views of the founders. The government is supposed to provide for the common defense and avoid entangling alliances. The budget should provide enough to defend our shores and no more. But if Republicans get their way, we will get spending increases that won’t balance with cuts elsewhere. Average taxpayers will end up worse off and even more oppressed by the tax-and-spend state.
New projects on the wish list include a “reusable rocket” to replace the space shuttle and money for the “next generation” of nuclear power. Especially bad is the attempt to resurrect the far-flung “star wars” missile-blocking system (whose successes were rigged), not only for this country but for the entire continent. To think we were once told this program would use “off-the-shelf” technology.
Whitewashing History. Washington’s game of governing requires the appearance of partisanship even when the reality is not there. The Democrats have to run against cruel-hearted Republicans who in turn have to run against profligate big spenders. This charade has continued for decades, because cooperation masquerading as conflict benefits both sides in a two-party democracy.
In the eighties, journalists praised or condemned Reagan’s deep cuts in the welfare budget. Few writers mentioned welfare spending had more than doubled—and most of them wrote for this publication. So it is today. Liberals are portraying the Republicans as greedy and heartless budget cutters. And two journalist-historians—ex-Bushies Peggy Noonan and John Podhoretz—are writing of the first year, with Noonan being featured on tax-paid public television. If the model holds, they will proclaim cosmetic changes as revolutionary.
One of many injustices of the American political system is that the Congress is not run democratically. The longer you stay in Washington, the more likely you can control what the “process” produces, and the more perks, in power and prestige, you amass. (The freshmen who wanted to abolish plush Congressional pensions, which would solve the problem, were quickly shut up by Gingrich.) Yet as the elites blocked a backbench revolution, the system they attempt to preserve steadily collapses from below. Those creaking floorboards in the Capitol signal a lot of digging going on.
