Friday, September 09, 2005

Anatomy of a Serial Killing, Part I

Silent Killers

More than a year ago, I wrote a post entitled,
Anatomy of a Murder, in which I detailed the Republican Party's under-the-radar approach to dismantling Social Security. Building on the "starve the beast" ethos of Grover Norquist and other small government zealots, the Bush Administration and their Congressional allies, have been mounting a rear assault on Social Security, because attacking such a cherished program head on is political suicide. As the Bush team learned with their ill-fated bid to privatize, even carefully crafted and well-packaged attempts to weaken Social Security are a hard sell.

But just because Social Security is unassailable on the plain of open warfare doesn't mean that the GOP is completely powerless to undermine the program that has been their bete noire since before it was enacted more than 60 years ago - far from it. The methodology is ingenious in its simplicity and the leverage it creates: By draining the Treasury, through a series of multi-trillion dollar tax cuts, of all monies allotted to handle the crunch on the Social Security that will occur with the impending wave of Baby-Boomer retirements, and in the process driving up enormous budget deficits that create an unhealthy, costly and risky dependence on foreign capital (read: China), the Bush administration is forcing the hands of legislators and policymakers - while at the same time trapping them in the current dynamic.

With the revenue streams of the Federal Government drying up at the same time that commitments are expanding at an exponential rate and the deficits are soaring to unsustainable and dangerous levels, the Bush Administration and its Congressional allies seek to usher in an era of "hard choices" during which they will be compelled to gut Social Security, Medicare and a host of other social programs. Not because they want to mind you, because they don't (honest they don't - wink). But, alas, they have no choice. Their hands are tied. The situation demands such sacrifices. Nevermind the fact that it was their reckless fiscal policies that brought about the crisis. Ignore the fact that the crisis could be solved by repealing some, not all, of the sacrosanct multi-tiered, multi-trillion dollar tax cuts that primarily accrue to the benefit of the wealthiest Americans (those with the least need for Social Security and Medicare).

The trap is set. The Republicans are betting that they can beat any Democrat who proposes repealing those tax cuts, so they can just sit back and let the Federal Government collapse under its own weight while the Democrats fritter and fret away the last days of the New Deal. And when the Federal Government does collapse due to lack of money and ever mounting commitments, the GOP can rebuild it in a minimalist form suitable to the "every person for themselves," "everyone is an island," brand of psuedo-Christianity so popular amongst its followers.

They will starve the beast by first over-feeding it.

Dead Canaries

The American people got their first taste of the pared down Federal Government envisioned by the modern-day GOP when Katrina hit last week. A weakened and underfunded FEMA was ill equipped to respond, and a levee fortification project under the Army Corp of Engineers had seen its funding stripped since 2001. It is unclear if the levee strengthening project would have been able to avert the Katrina disaster completely if the Bush Administration had not cut its funding so dramatically, but we do know that this program was set back decades by the Bush team's fiscal policies. What if Katrina hit in 2015 instead of 2005, and we could say more definitively that such choices directly impacted outcomes? Shouldn't we be preparing for eventualities such as this, even if disaster strikes before the completion of preventitive measures? Some disasters haven't yet hit, but under the current regime, we are insuring that we will never be as able as we should be to mitigate the damge.

In a recent post,
Matt Yglesias highlights the tactics I discussed in the context of Katrina, as well as some of the early casualties falling in what will eventually look like the closing montage of "hits" in a Godfather movie played out over many months instead of one day. Coppola would marvel at the ingenuity.

One prominent liberal meme going around is that Katrina shows us, in part, the consequences of decades of anti-government conservative rule in Washington (and, I would add, centuries of it in Baton Rouge). One common counterattack from conservatives and libertarians has been to note that Bush has not been much of a small government advocate and that there's no contradiction between thinking the government should only do a few things and thinking that it should do those few things well. I largely agree with that, but I think it points to the extent to which the Bush administration's "starve the beast" brand of conservatism is uniquely dangerous.

If you wanted to go about trimming the government in a principled way by cutting spending, you'd start off with things that are genuinely pointless (farm subsidies) or else hugely expensive (Medicare). When you try, instead, to attack it purely from the revenue side and hope this will "force" spending cuts in the future, you're all but guaranteeing that the cuts will be focused on programs that just happen to lack powerful constituencies. That means, as we've seen, anti-poverty spending and spending aimed at either forestalling long-term problems or else preventing low-probability ones. That's terrible public policy, but it's the only possible result of the strategy the Republican Party has adopted.

As a result, yes, everyone who's endorsed Bush's various tax cuts -- from Alan Greenspan on down -- deserves their share of the blame. When you support a cut that's not explicitly paid for, you're implicitly supporting spending cuts. And not "spending cuts" in the abstract or the spending that you happen to think should be cut, but the spending that is, in fact, likely to be cut as a result. Which is precisely to say spending on worthy, non-porky infrastructure, and spending on poor people. It's easy to say that the money could be found in less destructive ways, but if it isn't found that way up front, it isn't going to be found that way amidst the murk of the appropriations process. [emphasis added]
Yet, somewhat astonishingly (even to a political junkie such as myself), the GOP is unabashedly pushing for more and permanent tax cuts. At a time when our deficits are at record levels and the Katrina price tag is expected to be in the neighborhood of $100 billion in relief and reconstruction costs, not to mention what the economic slowdown will do to current revenue streams, they want to further weaken the Federal Government's ability to respond to crises. They see New Orleans drowning on their television sets and instead of reconsidering their radical policies, they see an opportunity to drown the Federal Government along with it. Sam Rosenfeld:

Congress was set to pass two budget reconciliation bills this month -- one that would cut $35 billion in entitlement spending, including $10 billion from Medicaid, and one that would cut $70 billion in taxes. Katrina has certainly delayed and may yet scramble the prospects of those bills passing, but so far, Republican leaders remain committed to the Medicaid reductions and are considering adding further tax cuts. From subscription-only CQ:

Republican leaders are maintaining their support for a $70 billion package of tax cut extensions and may add tax cuts aimed at stimulating rebuilding on the Gulf Coast...

Frist dropped a plan to vote Tuesday night on legislation that would permanently repeal the estate tax (HR 8). But top Republicans, including Gregg, argue the tax cut extensions will help stimulate the economy and should stay on track.
Not only do they want to extend tax cuts, including the permanent repeal of the estate tax (a tax that only impacts millionaires), but they haven't taken their eyes off the prize - the big kill. Brad Plumer:

It's an old business myth that the Chinese character for "crisis" combines the characters for "danger" and "opportunity." It doesn't. But I'm not sure anyone's told the Bush administration, judging from this little tidbit in CongressDaily today: "[White House spokesman Trent] Duffy asserted that the vast spending that would be required to address the hurricane's impact adds to the need to change Social Security, which threatens to strain the budget in coming years." Ah yes, despite the fact that privatization that would add trillions to the deficit in the short term, at a time when Katrina will already add $100 billion or more to the deficit this year, the time for privatization is now, obviously, in the wake of disaster. Um, no.
They don't want to gut Social Security. They have to do it. Katrina made them. Honest.

In case you're paying attention, though, here is the new GOP calculus:

- Tax cuts for multi-millionaires = off limits, no matter how many or how much.
- Funding for FEMA, Army Corp of Engineers, Veteran's Medical Benefits, Social Security, Medicare, Section 8 Housing, Food Stamps, Head Start, etc. = fair game.

Happy hunting.

(In Part II, I will look at how the Bush Administration's fiscal policies have impacted the poorest Americans, whose plight was given long overdue attention by the ravages of Katrina.)

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