international analysis and commentary

The New Deal legacy and the Republicans’ problem


If a future historian were to explain the 2012 presidential campaign in one sentence, it could well be: “Mitt Romney fought bravely against the legacy of the New Deal and the Great Society and lost.” In other words, programs wanted by Presidents Franklin D. Roosevelt and Lyndon B. Johnson, such as Social Security and Medicare, continue to dominate the American political landscape today, along with the issue of taxes, both in the form of Mitt Romney’s missing tax returns and of George W. Bush’s tax cuts, due to expire on December 31st.

Of course anything could happen on November 6th, including a long recount of votes in key states like Florida and Ohio, or even a victory of the Republican candidate. However, given President Barack Obama’s advantage in swing states, it is highly likely that he will manage to win reelection.

If this prediction comes true, the GOP’s weakness in this election cycle, which should have been largely favorable to the Republicans after their landslide win in the Congressional elections of 2010, will be explained more  in terms of long-term trends than by the quality of Romney’s campaign. It is in fact driven by the transformation of the party into a highly ideological, almost sectarian organization, which is at odds with the opinions of a majority of Americans, at least on the issues of caring for the elderly, fairness, and taxes.

The GOP has not always been the anti-tax party. It fought for decades under the flag of “fiscal responsibility.” The 1960 Party Platform (when the top marginal rate stood at 91% after eight years of a Republican administration) modestly stated: “Our tax structure should be improved to provide greater incentives to economic progress, to make it fair and equitable, and to maintain and deserve public acceptance.” Far from a battle cry for “liberation from taxes.”

Fifteen years later, President Gerald Ford defied a Democratic-controlled Congress vetoing a tax cut passed by the majority: “I have clearly stated ever since last October 6th that I would veto any tax cut if you failed to cut future Federal spending at the same time,” he said on December 17, 1975. President George H. W. Bush accepted a “grand compromise” with the Democrats in 1990 and signed a bill that raised taxes. He explained his decision in this cautiously worded statement from November 5, 1990: “Over 70% of that deficit reduction derives from outlay reductions; less than 30% from revenue increases.” Yet, this cardinal sin forever alienated Bush Senior from the militant anti-tax wing of the party.

Today, however, this wing controls the GOP, and tax cuts are considered the panacea to all and every problem: if the economy is doing well, then taxes should be reduced. And if the economy is in shambles, all you need to do to promote growth is, of course, cut taxes. Therefore we can expect, at the end of the year, a furious battle to permanently extend the income tax cuts implemented by Congress under George W. Bush’ administration.

Overall, it is worth remembering that the top marginal rate was still 91% in 1963 and that Democratic President Lyndon Johnson was the one who wanted to bring it down to 77%. Richard Nixon cut it to 70% and Ronald Reagan first lowered it to 50% and later to 28%. Under Bush Senior it grew again to 31%, while Bill Clinton jacked it all the way up to 39,60% (unleashing a decade of economic prosperity) before George W. Bush reduced it to 35%.

The reason why taxes are so important today has more to do with the evolution of the conservative movement than with the greed of billionaires benefitting from the largesse of Republican Congresses. Since 1980, the GOP has been cultivating a base of activists who cling to their convictions with almost-desperate faith and there are five issues on which they cannot accept even the slightest deviation from orthodoxy: taxes but also guns, abortion, gay marriage and climate change. The party of Ronald Reagan and of a muscular foreign policy might have come to agree to the retreat from Iraq and Afghanistan. And today some of its Congressmen might even be willing to go along with, even advocate, reductions in the defense budget.

Not so with taxes. Various anti-tax lobbies like the Club for Growth or Americans for Tax Reform have achieved the status of Guardians of the Faith and no serious contender can compete in Republican primaries, even at the local level, without repeating the mantra of “No taxes” to the voters.

This is the result of mainly two factors: the primary system itself and the strengthening of a self-sustaining conservative apparatus that does not depend from the GOP for its existence. The primaries, of course, are not a novelty, but their impact is much different today in a more strongly polarized society. As Bill Bishop explained in his book “The Big Sort: Why the Clustering of Like-Minded America Is Tearing Us Apart,” Americans increasingly prefer to live with like-minded neighbors and, therefore, are less exposed to (and less tolerant of) different opinions. In this environment, primaries discourage the participation of independent-minded voters and guarantee the success of diehard party stalwarts. Mitt Romney is nothing of the sort but, in order to prevail over the Santorums, Gingrichs and Bachmanns of 2011, he had to recast himself as the hyper-conservative politician he never was.

The conservative apparatus that was not able to block his nomination but forced him to move very much to the right is now largely independent from the GOP because of the generous support of various conservative billionaires (for example the Koch brothers) and also of committed grassroots organizations: the National Rifle Association alone has 4.3 million members. These lobbies, foundations, groups, magazines, talk-show hosts, TV networks form today a tight conservative network that can impose its will on the most recalcitrant Republican candidate, or President for that matter.

It is a movement that can bring million of voters to the polls and was instrumental in several historic GOP victories, most recently in 2004 and in 2010. Unfortunately for the GOP, such strategy of “mobilizing the base” on issues that resonate with the faithful only works as long as conservatives represent a plurality of the American people, or at least a more enthusiastic and more committed minority than liberals and independents. But this is no longer the case: American society has evolved and conservatives cannot carry the day alone. Therefore the Republican promise to cut taxes, which has been an asset for a generation of GOP candidates, has become a liability in 2012.