Republicans Running Out of Options
May 20, 2002
by Irwin Stelzer
“What platform am I supposed to run on?” whined a Republican congressman who faces a tough re-election battle in a marginal district. Peace and prosperity? Hardly. The president has assured the country that we are at war, and there is no prospect of a decisive victory in time to affect the November congressional elections. And although the economy is recovering, with industrial production on the rise and retail sales showing continued strength, rising unemployment rates, share prices that the average punter finds disappointing, and a falling dollar that may force the Federal Reserve Board’s monetary authorities to raise interest rates, seriously dilutes Republican claims to have preserved the Clinton-era prosperity. At least, that’s what the Democrats will say.
What about “we are the party of free trade”? After all, George W. Bush ran on a platform that called for a new global trade-opening round, and for expanding the North Atlantic Free Trade Agreement to include the entire hemisphere, rather than merely the U.S., Mexico, and Canada. But that was then, this is now. Any Republican running for Congress on a free trade platform after the president has levied tariffs on imported steel and Canadian forest products will find himself running against his own very popular president. Indeed, last week 16 Senate Republicans, led by the No. 3 man in the Republican leadership, Larry Craig of Idaho, joined Democrats to scuttle the president’s efforts to get effective authority to negotiate new freer trade agreements. No matter that the president sent three cabinet members to warn the Senate that other nations won’t negotiate with America if they think that Congress, serving a variety of parochial interests, can tack protectionist amendments onto any deal the president negotiates. The Senate vote may eventually be reversed, but if not, says presidential spokesman Ari Fleischer, “It would seriously undermine the cause of free trade.” As if the steel tariffs haven’t already done that.
Then there is the nation’s fiscal condition. Republicans had been hoping to run on a platform that says, “We not only gave you big tax cuts, but we have maintained the budget surpluses we inherited from Clinton.” No such luck. The tax cuts are still a potential vote-getter, especially since the Democrats are in the awkward position of attacking them, but declining to call for their repeal. But the national budget has gone from surplus to deficit, in part—but only in part—because of the military build-up and outlays for “homeland security” after September 11. But Republicans can’t blame the deteriorating fiscal condition solely on the need to counter terrorism. The economic slowdown has kept tax receipts below earlier forecasts, but the Republicans aren’t eager to go into the campaign complaining about the consequences of a weaker economy. And they will have difficulty explaining to their smaller-government constituencies just why the president allowed the social welfare budget to grow by almost twice as much in his two years in the White House as it did in Clinton’s first six years in office ($96 billion vs. $51 billion). To add to their embarrassment, Republicans will soon have to line up behind the president and vote to raise the statutory limit on the national debt by $750 million, to $6.7 trillion, if the government is to be able to borrow the money it needs to meet its obligations. So much for Republican congressional candidates’ ability to claim that theirs is the party of fiscal probity and small government.
Then there is education. Although Bush never went so far as to say that his priorities are “education, education, and education,” he did promise radical changes in the country’s non-performing education system. His conservative constituency were buoyed to think that their new president would finally tackle the teachers’ unions and give parents freedom of choice in selecting the school best suited for their kids. That was before Senator Ted Kennedy combined his charm and power in the Senate to persuade Bush to abandon all efforts at reform, and simply throw a few billions into the trough from which the teachers’ unions feed. Republicans running for re-election will have to avoid promising to fight for educational reform, lest their opponents ask why they have failed to enlist the president in their cause.
Finally, our typical Republican congressman can’t claim to be a member of a party that believes in free markets. Republicans and the president have reversed years of reform and put farmers back on the federal payroll by voting a monster farm bill that subsidizes agriculture beyond the wildest dreams of avarice of the large agribusinesses to which most of the new federal funds will flow. So much for free markets, and so much for fair trade in farm products.
Cynics here in Washington, a town in which they are the majority, are inclined to say that the president knows that he has pulled the rug from under his congressional allies, but knows, too, that his own popularity remains high because of his skilled leadership of America’s response to the terror attacks on the World Trade Center and the Pentagon. The rug-pulling is regrettable, but a necessary concession as “compassionate conservatism” morphs into pragmatic Bush-in-2004 politics.
That view doesn’t withstand scrutiny. For one thing, the president is traveling the country to raise funds for the campaigns of congressional Republicans, something he wouldn’t do if he was indifferent to the composition of the Congress. For another, unless the Republicans can regain control of the Senate in the November elections, the Senate will continue to refuse to confirm Bush’s nominations to the many vacancies in the federal court system. And getting those nominees onto the bench is perhaps the highest priority of the president’s conservative core.
All of these issues are important to the business community. The president’s judicial nominees are by and large unlikely to interpret regulatory statutes broadly. A Republican Senate would be less likely to approve of expanding the welfare state, or to pass laws adding to business’s regulatory burdens. And a Republican Senate would be more likely to approve the president’s nominee to replace Alan Greenspan when the 76-year-old Fed chairman’s term expires in 2004—if indeed Greenspan decides it is time to step out and devote himself to perfecting his tennis game.
This article appeared in the Sunday Times of London on May 19, 2002, and is reprinted with permission.
Irwin Stelzer is a Senior Fellow and Director of Economic Policy Studies for the Hudson Institute. He is also the U.S. economist and political columnist for The Sunday Times (London) and The Courier Mail (Australia), a columnist for The New York Post, and an honorary fellow of the Centre for Socio-Legal Studies for Wolfson College at Oxford University. He is the founder and former president of National Economic Research Associates and a consultant to several U.S. and United Kingdom industries on a variety of commercial and policy issues. He has a doctorate in economics from Cornell University and has taught at institutions such as Cornell, the University of Connecticut, New York University, and Nuffield College, Oxford.