Congressional Republicans dutifully positioned themselves in opposition to Clinton. The former Republican staff director for the House Budget Committee (he had become a lobbyist) told the New York Times that Clinton’s proposal was “doomed to fail from the beginning.” Republicans raised questions about the CBO’s numbers, then drafted legislation based on those same estimates as they called for a tax cut of $775 billion over ten years.
The two sides carried these positions into the 2000 presidential campaign. Early in the Republican presidential primary season, George W. Bush proposed a tax cut of nearly half a trillion dollars; John McCain offered a tax cut of about half that size, directing the remainder of the surplus to shoring up Medicare and Social Security and to reducing the national debt. As Election Day closed in, Bush expanded his proposal, calling for $1.3 trillion in tax cuts over ten years. Even the Democratic candidate, Al Gore, proposed some tax cuts.
By a few Florida votes (and an intervening 5–4 Supreme Court decision), Bush won the presidency. For the next eight years, the president and Congress repeatedly followed through on their vowed tax cuts. In June 2001, just after the dot-com bubble began to burst, Washington cut taxes by $1.35 trillion over ten years. Then, following the deadliest terrorist attack on our soil, on 9/11, we sent troops first to Afghanistan and afterward to Iraq, efforts that to date have cost Americans $5.6 trillion.11 In 2003, three months after the invasion of Iraq, Washington passed another tax cut, estimated at the time to be $350 billion over ten years. Then, heading into his reelection campaign, Bush signed into law what he called “the greatest advance in health care coverage for America’s seniors since the founding of Medicare,” a prescription-drug benefit for seniors that costs hundreds of billions of dollars per year. We paid for none of President Bush’s initiatives and instead borrowed all of it from our children.
By 2008, a subprime mortgage crisis, spurred by lax regulation, was upon us, destroying the brokerage houses Lehman Brothers and Bear Stearns, pushing the quasi-autonomous lending agencies Fannie Mae and Freddie Mac fully into the arms of the government, and leaving the country’s largest financial institutions wobbling toward collapse. Housing values and stock prices plummeted, erasing almost $12 trillion of Americans’ net worth—a larger percentage decline in wealth than occurred during the shock that precipitated the Great Depression. The market collapse, which saw the Dow drop 36 percent in three months, also devastated retirement savings. An elderly woman in Grand Junction, Colorado, captured the mood of my town halls whenshe said her plan was to “die sooner” in order to preserve her standard of living.
To bring stability, President Bush and Congress passed the Troubled Asset Relief Program, known as TARP. Even though the funds were loans or investments that were to be at least partially repaid—and they ultimately were—the perceived price tag of $700 billion caused alarm among fiscal conservatives and those who believed it was the wrong way to stave off a looming economic crisis, even one that was now occurring worldwide. By the time President Bush left office, the United States had entered the Great Recession, the sharpest economic downturn since the Great Depression. All economic indicators pointed in the wrong direction: we were losing millions of jobs, federal revenue was plummeting, and unemployment-driven expenditures that protect our most vulnerable citizens were rising. The fiscal year 2009 deficit—fueled by tax cuts, the expense of two wars, and the unpaid-for expansion of Medicare benefits—rose to more than $1.4 trillion, almost 10 percent of GDP. Since the country’s founding, the only time the deficit had been larger, as a percentage of GDP, was during World War II.
IV. Tea Party Rising
Unfortunately, people with no interest in making sound economic decisions—a minority of Republican lawmakers, primarily in the House of Representatives—suddenly got their hands on key levers of power.
The first steps by the government to deal with the financial crisis had been promising and necessary. In 2009, within six weeks of taking office and in the midst of a deepening recession, President Obama and the new Democratic Congress assembled a package of measures intended to boost the economy. In March, Obama intervened to save the American auto industry—and what turned out to be 1.5 million jobs—by providing bridge loans to General Motors and Chrysler. A month before, he required the nineteen largest banks in the United States to undergo stress tests of their balance sheets to reassure the American people of their capacity to withstand further economic disruption. The emergency measures culminated in the American Recovery and Reinvestment Act, which cost $831 billion, divided between new spending and tax cuts aimed at the middle class.12 This was a necessary investment in our economy, and even though not all of the money was well spent it was a classic case of ramping up investment at a time of national need.
But all of this immediately became a lightning rod in a renewed debate about the nation’s economic priorities, as Republicans rediscovered a commitment to fiscal probity now that there was no longer a Republican in the White House. To some, the emergency measures served as a symbol of out-of-control government spending. Reacting to the Obama administration’s announcement of a program to help families refinance their mortgages and save their homes, the millionaire commodities trader and CNBC personality Rick Santelli took the floor of the Chicago Board of Trade and launched this tirade:
This is America! How many of you people want to pay for your neighbor’s mortgage that has an extra bathroom andcan’t pay their bills? … I’ll tell you what, if you read our Founding Fathers, people like Benjamin Franklin and Jefferson, what we’re doing in this country now is making them roll over in their graves.
He called for a “Chicago Tea Party in July” and asked the “silent majority” to join him.
Whether Santelli’s remarks lit the fuse or there was some other cause, the so-called Tea Party movement quickly became an explosive political force. Through the spring and especially on April 15—when federal taxes are due—hundreds of loosely organized groups held meetings and rallies and protests. Over the summer, the movement gathered grassroots strength as well as the backing of powerful new patrons: conservative talk radio, Fox News, and the invisible hand of the advocacy groups and paid operatives sponsored by the Koch brothers.
By September, my town halls in Colorado were often dominated by Tea Party members with a new cause: defeating the Patient Protection and Affordable Care Act, which was then being considered in Congress. Across the country (but it must be said not in my Colorado town hall meetings), Tea Party members shouted down elected officials in the name of an insurgent cause. In Washington, a crowd of tens of thousands gathered outside the Capitol. The rally was colorfully dotted with people costumed as George and Martha Washington, Samuel Adams, and Paul Revere, or as blue-coated soldiers from the Continental army, with a few in scary Barack Obama masks to add a dash of menace. Reporters and photographers compiled a lively record of the signs demonstrators carried. They gave voice to a grab bag of conservative causes:
What would Thomas Jefferson do?
You can’t borrow to prosperity.
HONK … if you pay my neighbor’s mortgage.
You lie!
Bailouts + Debt = fiscal child abuse
We will fire you!
Obamanomics: Chains you can believe in
Terrorists Won’t Destroy America, Congress Will!
I want my country back!13
Audience members and speakers alike conveyed a pervasive sense of outrage that, if not already lost, the United States as they knew it was in danger. The grassroots activists had no single message: the array of speakers included a car salesman, James Anderer, who blamed President Obama when Chrysler shuttered his dealership as it reorganized itself out of bankruptcy; coal miners objecting to cap-and-trade incentives to reduce carbon emissions, because the incentives would lead to the “final destruction of America”; and a rapper named Hi Caliber, who claimed to be “the nation’s one and only conservative hip-hop artist.” FreedomWorks, one of the Koch brothers’
advocacy groups, was a main sponsor of the rally, which explains why the miners got so much slightly off-theme stage time. They were assisted by a bunch of other Beltway pros and pop-up contractors happy to grab their advocacy dollars. They brought along members of Congress, veteran campaigners, think tank talking heads, and backroom party power brokers like Congressman Dick Armey. The insiders stood on a simpler and more consistent platform. One of them, Indiana congressman Mike Pence, of Indiana—soon to be governor, now vice president—captured this focus: “We the people do not consent to runaway federal spending. We the people do not consent to the notion that we can borrow and spend and bail our way back to a growing America.” Pence and his professional political colleagues had distilled the Tea Party’s crazy quilt of grassroots causes into two basic demands: slash taxes and dismantle what they called “big government.”
Beyond the rally, politicians affiliated with the Tea Party movement were gearing up for an Election Day reckoning with Washington Democrats more than a year later. More unusually, they also took aim at incumbent “conventional Republicans.” Indeed, seated Republicans were among the first to fall during that election cycle. The insurgency thrived in the harder-to-find corridors of American politics—party primaries and especially the state conventions, notorious for arcane rules and low voter turnout. Many traditional Republicans were to lose their political lives in these arenas.
In May 2010, the Tea Party upstarts Mike Lee and Tim Bridgewater took Senator Bob Bennett out of his reelection bid on the first ballot of Utah’s Republican convention. Bennett had led work on bipartisan health care legislation and had supported Bush’s TARP, among other unforgivable crimes.14 As spring turned to summer, Tea Party–backed newcomers for Senate seats bumped off establishmentRepublicans all across the country. In Kentucky, Rand Paul forced Jim Bunning out of the race even before the primaries began. In Delaware, Christine O’Donnell knocked out former governor Mike Castle. Nevada’s Sharron Angle defeated a pack of other Republicans in the primary to earn a face-off against Senate Majority Leader Harry Reid. In Colorado, Ken Buck became my 2010 opponent by defeating a longtime state Republican leader, Jane Norton.
Although some proved better candidates than others, they shared the same roster of backers: the Club for Growth, the Tea Party Express, FreedomWorks, and eccentric diehards like South Carolina senator Jim DeMint and former Alaska governor Sarah Palin.15 Their campaigns were unrefined and hard to predict, but Pence’s two themes—dismantling big government and reducing the deficit—came through loud and clear. Ken Buck’s remarks at the Colorado GOP Assembly, captured on YouTube, were typical:
We have $100 trillion in unfunded liability, we have an out of control national debt, we have an annual deficit that is ridiculous, and what do we do? We bail out automobile companies, we bail out banks, we try to nationalize our health care system, and now they’re talking about cap-and-trade. Folks, our country is financially bankrupt, and if we continue to push onto our children and grandchildren the debt, we are also morally bankrupt. I will fight in Washington, DC, for a balanced budget amendment, a constitutional balanced budget amendment.
On Election Day 2010, Republicans gained sixty-three members of the House—the largest swing since 1948—and won control of that chamber. They added six Senate seats. As the 112th Congress gathered in January 2011, we knew our political divisions would grow. We had no idea how wide these divisions would become, but the Tea Party rallies and campaign rhetoric foretold that many arguments would take place over the deficit, the debt, and the size of the government. We knew, too, that the Tea Party was happy to threaten shutdowns and defaults, as leverage in negotiating.
John Boehner, of Ohio, the new Speaker, tried to set a conciliatory tone when he took the gavel from Nancy Pelosi. He was a veteran lawmaker and understood that Congress could not govern by division. He made a number of pledges:
We will dispense with the conventional wisdom that bigger bills are always better; that fast legislating is good legislating; that allowing additional amendments and open debate makes the legislative process “less efficient” than our forefathers intended … Legislators and the public will have three days to read bills before they come to a vote. Legislation will be more focused, properly scrutinized, and constitutionally sound.
Jim DeMint, of South Carolina, the de facto leader of the Tea Party senators, wanted none of this. “We need to have a shutdown at this point,” he said, the day before Boehner’s gentler remarks. “We’re not going to increase our debt ceiling anymore. We’re going to cut things necessary to stay within the current levels.” Within weeks—and especially as temporary budget deals failed to produce the trillion-dollar cuts that Tea Party candidates had campaigned on—DeMint was joined by others.16 Their ire seemed directed as much at members of their own caucus as at Democrats in Congress and the White House.
Americans can be forgiven for having only a foggy recollection of what happened over the next six years. The dreary cycle of shrill and tedious escalation and recrimination would be better forgotten if it had not had such an ill effect on the nation. As the weeks and months went by, a handful of members of Congress perfected the cynical craft of turning the legislative process against the government.17 They saw every expiring budget as a moment to exact fiscal tribute both from political opponents (Democrats and the president) and from their own ostensible allies (other Republicans). The dozens of continuing resolutions we passed to keep the government running were as short as one day and as long as 188 days and set no national priorities. We had become the land of flickering lights, in which the standard of success was not what we were doing to benefit the next generation of Americans or to enhance our role in the world but instead whether we had kept government open for another few minutes. The dysfunction drove the approval rating of Congress down and down—to about 9 percent the last time I looked—which served the hard-liners’ antigovernment purposes well.18
No tactic better captures the behavior of the Tea Party affiliates in Congress than their stance against lifting the debt ceiling as leverage in budget negotiations. Only someone willing to break the government—and I mean that literally: only someone willing to do permanent damage to the United States—would ever make this threat credible. The posturing peaked in March 2011 when twenty-three Republican senators sent a letter to President Obama declaring their intention to weaponize the debt ceiling:
Government spending is growing at an alarming rate, and the federal budget deficit has reached record levels. Congress will soon face a vote to increase the debt ceiling yet again, the fourth time in your Presidency and the 11th time in the last decade. Future generations will drown in a debt forced onto them by the inactions of Congresses and Administrations far before their time. The time to remedy these failures is now.
A decision to raise the debt ceiling is essentially administrative in nature. It grants the Department of the Treasury the authority to pay back debts resulting from prior, unpaid-for spending by Congress. Failing to lift the debt ceiling is no different from watching pay-per-view all month and then throwing the cable bill into the trash can when it arrives. What made the Tea Partiers’ strategy so galling is that they pursued it in the name of fiscal prudence—a position no different from the pay-per-view customer’s claim that by tearing up the bill he is living within his means. And just as surely as our deadbeat cable viewer would have to pay a premium to restore his service, so would a deadbeat Congress force the government to pay higher interest rates if the American credit rating was damaged.
For this reason, virtually every member of Congress knew the debt ceiling would have to be lifted in the end. Under circumstances like this, process managers hold the high cards, none more so than Mitch McConnell. As the 2012 presidential election loomed, McConnell was finally able to perform what Carl Hulse of the New York Times called “a legislative magic trick” to briefly resolve the problem. As a decision came down the wire, he worked with Harry Reid to construct a procedural path allowing Pres
ident Obama to lift the debt ceiling unless Congress voted to disapprove. This permitted his Tea Party members to claim they had fought the good fight but also prevented the economic calamity that would result from a failed debt-ceiling vote.
All McConnell and Reid accomplished was to postpone the real decisions to a later day. Their deal conveniently set the deadline after the next presidential election, avoiding the inconvenient spectacle of Washington’s failing to grapple with its finances as Americans went to the polls. The new deadline would be December 23, 2012. Members of Congress would have two days to come together on a deal before many of them missed Christmas.
This sort of scheduling is always intended to put leadership in the driver’s seat and jam ordinary members with a precooked deal. This time, there was much at stake. The deficit-inducing Bush tax cuts from the decade before were set to expire. In addition, across-the-board discretionary spending cuts, known as the sequester, would take effect simultaneously. The sequester was the product of an earlier half-baked congressional measure that created a legislative vehicle so ugly and mindless that it would force the people’s representatives to find a fiscal compromise. If nothing changed, it would go into effect. Taken together the expiring Bush tax cuts and looming sequester were called the “fiscal cliff.”
The postponed deadline prompted the first downgrade of the sovereign debt of the United States in the country’s history. Standard and Poor’s took the view that the existing agreement fell short of what would be necessary “to stabilize the government’s medium term debt dynamics.” The ratings agency clearly believed that it was unlikely that delay would produce a better result.
The Land of Flickering Lights Page 14