Who Stole the American Dream?

by Hedrick Smith

  The Tea Party in Power

  In power, the Tea Party Right pursued an agenda out of Goldwater and Gingrich, with a sharper, more cutting edge than Reagan. Very quickly, Tea Party caucuses on Capitol Hill signaled their intention to challenge their own leaders, if need be, in order to slash the size of government and the national debt—without touching tax breaks for corporations and the wealthy. Like Gingrich’s Class of 1994 Republicans, the Class of 2010 was out to shut down government programs by the bushel, even those designed to help average voters.

  With three thousand Americans dying and forty-eight million getting sick every year from tainted food, House Republicans cut millions of dollars from the budget of the Food and Drug Administration for overseeing the safety of the nation’s food supply. They balked at renewing funds to retrain Americans thrown out of work by foreign competition. They opposed disaster relief after Hurricane Irene.

  “They are more rigid than the Class of ’94,” said Norman Ornstein. “These are people who say we can cut most of government and nobody would notice, and they believe it. They seem to view Washington and the whole process as a leper colony. The more time you spend with the lepers, the greater the likelihood that you are going to get infected yourself.”

  The Tea Party’s uncompromising absolutism on taxes and on across-the-board cuts of government programs left older conservatives like Bill Kristol, once a young Republican firebrand in the 1980s and now editor of the conservative Weekly Standard, worrying that many American voters would shy away from the Republican Party if it appeared to be “in the grip of an infantile form of conservatism.”

  GOP Right vs. Boehner and Obama

  Taxes were the touchstone issue.

  By rights, it fell to John Boehner as House Speaker to negotiate with President Obama on how to get the national debt under control. In early July 2011, Boehner shared his ambition with other House Republican leaders: He had not spent twenty years working his way up to the top job just for the title. He wanted to achieve something big, like a huge debt reduction package.

  Boehner and the Republicans had staked out their position, calling for big cuts in government spending. Obama argued that taxes had to be part of the package, and taxes on the wealthy had to go up. “You can’t reduce the deficit to the levels that it needs to be reduced without having some revenue in the mix,” Obama asserted.

  During a round of golf at Andrews Air Force Base in mid-June 2011, Boehner turned to Obama in the golf cart and urged the president to join him in striking a grand bargain: “Come on, you and I,” Boehner said, “let’s lock arms and we’ll jump out of the boat together.” For the next three weeks, the two leaders tried in private to craft a package to reduce the national debt by $4 trillion over ten years through a combination of large spending cuts and $800 billion in tax increases.

  It was a political gamble. If they could strike the bargain and get Congress to pass it, both men would rise in stature. The president would be stronger running for reelection in 2012, and Boehner would raise his stature by winning huge spending cuts from Obama yet showing voters that Republicans were not out to gut Social Security and Medicare. The risk was that the hard-core Republican Right and/or militant liberal Democrats would revolt and block the deal.

  As Obama and Boehner edged close to a deal, word about Boehner got out to House Republicans touching off rebellion. On Saturday night, July 9, Boehner phoned the president at Camp David and told him that it wouldn’t work. House majority leader Eric Cantor, who had maneuvered into becoming the point man for the Republican Right and/or who was irked at being cut out of the secret Obama-Boehner talks, had torpedoed the deal. He told Boehner that House Republicans would not accept any tax increases and that Boehner had to back out of talks with Obama. Boehner bowed to that dictum and rejoined the Republican chorus against any tax increase.

  Republican-friendly columnist David Brooks exploded in exasperation at the adamant refusal of the Tea Party–dominated Republicans to accept what he saw as Obama’s lopsided concessions. In a New York Times column headlined “The Mother of All No-Brainers,” Brooks wrote: “A normal Republican Party would seize the opportunity to put a long-term limit on the growth of government,” but not a Republican Party in the grip of the Tea Party Right. “The members of this movement do not accept the logic of compromise, no matter how sweet the terms. If you ask them to raise taxes by an inch in order to cut government by a foot, they will say no. If you ask them to raise taxes by an inch to cut government by a yard, they will still say no.”

  That unflattering image evidently gnawed at Boehner because he decided to reopen his secret talks with President Obama in mid-July. In this final push, their grand bargain became even more ambitious. Boehner wanted an additional $450 billion in cuts from Medicare and Medicaid on top of $2.6 trillion in spending cuts previously agreed upon. Obama responded by demanding $360 billion more in tax revenue increases on top of $800 billion that Boehner had previously accepted. But on July 17, as Boehner talked with Cantor about making a counteroffer, Cantor flatly vetoed any tax increases. Boehner was stymied. He could not even go back and pick up the more modest deal that he and Obama had largely agreed upon a few days earlier. He had to call Obama once again and back out.

  The Republican refusal to budge an inch on tax increases on the wealthy ignored the fact that the size of the deficit from 2009 through 2012 was heavily determined by the weak state of the U.S. economy and the fact that U.S. tax revenues, as a percent of the nation’s economy, were already at their lowest level in sixty years—since 1950. It ignored the fact that the United States has the third lowest overall tax rates of the twenty-eight most advanced economies in the world. Not only do Germany, France, Canada, the United Kingdom, Japan, and New Zealand all have higher tax rates than the United States, but so do Turkey, Korea, Israel, and Iceland. Among developed countries, only Mexico and Chile tax less than the United States.

  The Tea Party Millionaires Club

  A hidden factor was at work on the tax issue—the Tea Party millionaires club.

  Among the eighty-seven new House Republicans elected in 2010, low taxes suited not only their politics but their pocketbooks. Thirty-three of the sixty members of the House Tea Party caucus were millionaires when elected. Six were worth more than $20 million, according to the Center for Responsive Politics, which tracks money in politics. “What unites these freshmen,” said the center’s Dan Auble, “is that, on balance, they’re rich.” On average, Tea Party members were twice as rich ($1.8 million net worth) as other House members ($755,000).

  Congress as a whole has a large crop of millionaires, which puts them among the richest 1 percent in America. In net worth, 261 out of the 535 senators and House members are millionaires—49 percent of the total, compared with 1 percent of the U.S. public. The wealthy have long been well represented in Congress, from prosperous landowners in the early 1800s, railroad barons and industrialists in the 1900s, to the new Wall Street and dot.com millionaires of today. What is striking is that the average wealth in Congress has shot up by 250 percent from 1984 to 2009, while average Americans were going backward.

  Politically, the most powerful millionaire in Congress is House majority leader Eric Cantor, a handsome workaholic who recruited many of the new Tea Party House Republicans as candidates and who epitomizes their views and their financial profile.

  First elected in 2000, Cantor is a multimillionaire real estate businessman from Richmond whose wife is an attorney serving bank clients. According to his financial disclosure statement, Cantor’s personal portfolio in 2010 was worth about $5 million.

  Not only do his investments and family real estate and banking connections give Cantor a vested interest in low tax rates for millionaires and in deregulating the financial industry, but the financial industry showered Cantor in 2010 with more than $2 million in campaign donations, double what they gave to Speaker Boehner. As The Washington Post commented, Cantor is their voice at the bargaining table.

 
Grover Norquist: Anti-Tax Lobbyist

  Republican intransigence on tax increases also owes much to what Massachusetts governor Deval Patrick called the “hypnotizing” influence of an unlikely-looking Pied Piper—a stocky, bearded, owl-eyed anti-tax lobbyist named Grover Norquist.

  In the 1980s, Norquist worked with Karl Rove at the national headquarters of the College Republicans. At President Reagan’s urging, he formed Americans for Tax Reform to carry out Reagan’s “Starve the Beast” strategy. He built a nationwide anti-tax movement and became what columnist Arianna Huffington called “the dark wizard of the Right’s anti-tax cult”—an epithet that pleases Norquist. He posted it on his webpage.

  Norquist, whom Senate majority leader Harry Reid called the de facto leader of congressional Republicans on tax issues, presses relentlessly for ever lower taxes, using that strategy to push constantly for across-the-board reductions in all discretionary programs and an across-the-board freeze in pay levels at such diverse agencies as the Pentagon, Medicare, FBI, Centers for Disease Control, and the National Park Service. Norquist, who seems to oppose virtually all government, led other budget deficit hawks after the Republican sweep in the 2010 elections in calling for a Congressional “crusade” against government spending that accepts “no sacred cows.” More broadly, Norquist has laid out a strategy of cutting government in half by privatizing Social Security, eliminating welfare, cutting defense, education, and farm subsidies, as well as aid to the disabled, at-risk youth, and early child development, and selling off government facilities like airports; and then cutting government in half again.

  As an anti-tax missionary, Norquist has no peer. He has set up anti-tax coalitions in every state. In Congress, as his website advertises, he has cajoled, persuaded, and threatened 238 House members and 41 senators—mostly Republicans—into signing a pledge never to raise taxes (as well as 13 governors and 1,249 state legislators). Since 1990, Norquist boasts, no congressional Republican has voted for any tax increase, and if anyone breaks his pledge, he will mount a mass effort to purge the offender.

  Obama: Unable to Govern as a Democrat

  Norquist is so confident of disciplining his anti-tax army that he once boasted: “We will make it so that a Democrat [in the White House] cannot govern as a Democrat.”

  That’s exactly the political bind in which Barack Obama found himself in 2011—cornered by a radicalized Republican House majority and blocking-sized Senate minority, both dug in against raising taxes.

  Just as Grover Norquist had predicted, Obama was unable to govern as a Democrat. In the battle over the federal debt ceiling, the Republican hard Right forced both GOP leaders in Congress and President Obama to accept their no-tax agenda along with nearly $1 trillion in immediate spending cuts, plus another $1.2 trillion to $1.5 trillion to come later. Even as American politics moved toward the 2012 election, the Republican Right in Congress adamantly refused to accept any tax increase on the rich to pay for extending middle-class payroll tax cuts, even though opinion polls indicated that’s what the public favored. And as Yale professor David Bromwich observed, “It is an unhappy fact of politics that victory goes to the pressure that will not let up.”

  Tea Party Republicans were triumphant, but some mainstream Republicans were alarmed by what one called the “dangerous folly” of the Tea Party’s game of chicken against the president. Former two-term Republican senator Chuck Com of Nebraska, who left the Senate in 2009, said he was appalled at the “irresponsible actions of my party, the Republican Party…. I had never seen anything like it in my, in my lifetime. I think about some of the presidents that we’ve had on my side of the aisle—Ronald Reagan and George Bush senior, and go right through them, Eisenhower. They would be stunned…. I was very disgusted in how this played out in Washington, this debt ceiling debate. It was an astounding lack of responsible leadership by many in the Republican Party.”

  The GOP Mainstream Bends

  Six months later, Maine’s Olympia Snowe, a moderate Republican, voiced similar anger when she announced last February that she was quitting the Senate after thirty-four years in Congress and would not seek reelection despite being a strong favorite. “I find it frustrating that an atmosphere of polarization and ‘my way or the highway’ ideologies [have] become pervasive in campaigns and in our governing institutions,” Snowe declared. Seeing no realistic prospect for change, Snowe said bluntly: “I am not prepared to commit myself to an additional six years in the Senate.”

  Some mainstream Republican senators such as Orrin Hatch of Utah and Richard Lugar of Indiana, like GOP presidential candidates playing to the hard-core Right in the primaries, swerved to adopt hard right positions in their reelection campaigns to ward off Tea Party purging. Hatch survived the initial Tea Party purge, but Lugar was knocked off.

  Conservative columnist David Brooks likened Republican primaries to “heresy trials” imposing ideological purity, and he sharply chided Hatch and Lugar for bowing to these pressures. “It’s not honorable to kowtow to the extremes so you can preserve your political career,” Brooks commented. “Of course, this is exactly what has been happening in the Republican Party for the past half century. Over the decades, one pattern has been constant: [Right] Wingers fight to take over the party, mainstream Republicans bob and weave to keep their seats. Republicans on the extremes ferociously attack their fellow party members. Those in the middle backpedal to avoid conflict.” The danger, Brooks warned, is that the new right-wing extremists “don’t believe in governance. They have zero tolerance for the compromises needed to get legislation passed…. It’s grievance politics.”

  In the past, mainstream Republicans and Democrats have tackled politically explosive issues such as the national debt or the future of Social Security and Medicare through bipartisan commissions that work out of the political limelight to forge compromises based on shared sacrifice. But in the New Power Game, the time-tested approach of mutual give-and-take has been discarded in favor of what politicians themselves deride as “the permanent political campaign,” pushed especially by the Republican hard Right.

  “Today’s Republican Party,” observed Congressional scholars Thomas Mann and Norman Ornstein, “is an insurgent outlier. It has become ideologically extreme; contemptuous of the inherited social and economic policy regime; scornful of compromises; unpersuaded by conventional understanding of facts, evidence and science; and dismissive of the legitimacy of its political opposition, all but declaring war on the government.”

  The Democratic Party is “no paragon of virtue,” Mann and Ornstein contend, but they find Congressional Democrats more ideologically diverse, more open to incremental changes of policies, and more prepared to seek compromise and bargaining with Republicans.

  For Washington to get functioning properly again, Mann and Ornstein argue, the Republican Party has to return to its more traditional footing. “Bringing the Republican Party back into the mainstream of American politics and policy,” they assert, “and [a] return to a more regular, problem-solving orientation for both parties, would go a long way toward reducing the dysfunctionality of American politics.”

  It would also help revitalize the U.S. economy and recover the American Dream, as would a reduction of America’s ambitious global military footprint and operations.

  CHAPTER 20

  THE HIGH COST OF IMPERIAL OVERSTRETCH

  HOW THE U.S. GLOBAL FOOTPRINT HURTS THE MIDDLE CLASS

  To amass military power without regard to our economic capacity would be to defend ourselves against one kind of disaster by inviting another.

  —PRESIDENT DWIGHT EISENHOWER,

  State of the Union Address, February 2, 1953

  The total amount that we spend on our military every year in the United States is roughly the same as the sum total of all defense expenditures by every other country on the planet.

  —CHRISTOPHER PREBLE,

  The Power Problem

  MATTHEW HOH KNOWS the Afghan war from the inside. He volunteere
d to go, and he was a perfect fit for Afghanistan. At thirty-five, he had the right mix of experience, energy, courage, and commitment. After college, Hoh had enlisted in the U.S. Marines. By 2006, with the Iraq war at its worst, he was a marine captain commanding a combat engineer company in what Hoh called “the hell that was Anbar Province”—a hotbed of Sunni resistance where Americans suffered extremely heavy casualties.

  Hoh knew how to get Iraqis to cooperate with Americans. In 2004–2005, he had supervised a major reconstruction effort by five thousand Iraqis in Saddam Hussein’s hometown of Tikrit, spending tens of millions of dollars to rebuild roads and mosques. His program had been singled out for praise. Then came Hoh’s sixteen-month combat tour in Anbar Province, where he was cited for “uncommon bravery” and recommended for promotion. But, suffering from post-traumatic stress disorder, Hoh mustered out of the U.S. Marines. However, when President Obama ramped up the Afghan war and sent in twenty-one thousand more U.S. troops in March 2009, Hoh volunteered to serve again.

  The State Department grabbed him and sent him to heavy combat zones, first in the east and then into the southern heartland of the Taliban. Hoh studied the local culture and dug into Afghan history. In Zabul Province, he worked to help local officials increase their effectiveness and win support among the tribes. In the east, he had seen that the tribes had little affinity for the Taliban but had been driven into a working alliance with the Taliban out of resentment against American military intrusions. In the south, Hoh found people motivated not by Taliban ideology, but by family ties and loyalty to tribe and village. There was not one insurgency, he discovered, but hundreds, and what united them was their hostility toward the corrupt central government in Kabul, especially after the fraud-ridden reelection of President Hamid Karzai in August 2009.