Washington Matters

Blind Faith in Republicans

Most Americans think a GOP Congress would be better at running the economy, but few can tell you just what that means.

By Mark Willen, Senior Political Editor, The Kiplinger Letter

July 28, 2010

Voters have high hopes for Republicans. By every indication, they plan to send a lot more of them to the next Congress, maybe even enough to take control of the House of Representatives.

It’s not hard to understand why voters are unhappy with President Obama and his Democratic Congress. They’re tired of waiting for the economy to improve. They want a real recovery, with real jobs and pay raises, and they’re unhappy about the rapid growth of government and a corresponding escalation of the deficit. They believe the national debt is out of control. And they blame Obama for most of that.

Republicans have been fueling that anger but so far have been relatively shy about offering alternatives. They promise to change that by offering a policy plan in September, after a monthlong recess they’ll use to listen to voters and craft ideas. A lot is riding on that plan -- at least in terms of voter hopes.

A recent poll by the Benenson Strategy Group shows just how much. The survey, conducted for Third Way, a moderate think tank, found that voters are counting on the GOP to come up with fresh ideas. Almost two-thirds said they expect Republicans to promote “a new economic agenda that is different” from former President Bush’s agenda. And that’s what they want. By 49% to 34%, they said if the choice is between Obama’s economic agenda and Bush’s, they prefer Obama. They don’t want to go back to the old ways.

So far, though, a return to the Bush era is exactly what Republicans have offered. As the expiration of the Bush tax cuts draws near, several GOP leaders have gone on record saying they want them all extended, and they insist there is no need to find offsetting savings to avoid exploding the deficit. Republicans have long argued that tax cuts grow the economy and pay for themselves, though the numbers don’t show that. The first round of Bush tax cuts came in 2001, and the 2002 deficit rose to 1.2% of GDP (from a surplus in 2000). The second round of tax cuts came in 2003, and the 2004 deficit rose to 3.5% of GDP. There were other factors involved -- notably higher spending for the war against terrorism and a recession, and Republicans say the deficit would have been worse without the tax cuts. But that argument -- that it would have been worse otherwise -- is the same one they dismiss when Obama uses it to defend the 2009 stimulus, which incidentally included more than $300 billion in tax cuts.

There are things that Republicans can usefully propose. A more pro-business policy that removes the uncertainty would help a lot, though businesses probably need to expect more regulation as long as Obama is president. A revamping of the tax code is sorely needed, but it has to be something other than cuts and more cuts. A resolve to work with the debt commission’s whole package of ideas, including tax hikes and entitlement cuts, is a necessity. More than anything, a real plan to create jobs is needed.

Still, even if Republicans take back the House, delivering on their goals won’t be easy -- not with Democrats controlling the Senate and White House. It will take bipartisan cooperation, which has not exactly been plentiful. Two years of complete gridlock may satisfy those Obama critics who just want to stop him in his tracks, but by itself, it won’t get the nation any closer to a more stable and prosperous economy.

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