by Matt Kibbe
Tea Party politicians were not just shaping the conversation, though. They were proposing solutions that focused on increasing freedom and putting decision-making power back where it belongs, with the people. Cutting against the progressive grain in Washington, these young legislators started asking the question: How do we move power and money back home, out of Washington, D.C.?
MIND YOUR PLACE
EVEN BEFORE THE 2010 ELECTION, AS IT BECAME CLEAR THAT THE TEA Party would have a big impact on the results and many Tea Party-aligned candidates would win, some in the media shifted the conversation away from Tea Party electoral success, and instead began to question whether elected Tea Party-aligned senators and congressmen would be effective in implementing conservative policies. Mike Lee, who would soon be elected by Utahns to the U.S. Senate, faced such a critique from his hometown newspaper, the Deseret Morning News. The newspaper reported that while Lee was proclaiming he would bring “radical reform,” including a Balanced Budget Amendment, it was likely he would have little impact:
Political insiders say it’s unlikely [Mike Lee will] do much of significance in the Senate, at least in his first term. In the Senate, seniority governs everything: the committees you sit on, the arms you can twist to get votes, the bills you get to sponsor. “Mike will have a choice of joining with a few like-minded people to try to have more strength and power in numbers, or to work with a greater number of Republicans and Democrats on certain issues that will allow him to have a far greater influence on many more issues,” says Kirk Jowers of the Hinckley Institute of Politics at the University of Utah. “I hope he chooses the latter.” The question, Jowers says, is whether Mike Lee wants to make a difference, or whether he simply wants to make a point.25
While many in the press doubted that the new freshman class could make a difference, the Washington establishment and lobbyist class quickly began setting off alarms, manning the castle turrets, and preparing for battle as if against an invading force. Former Republican Senate majority leader Trent Lott, now a lobbyist, vividly illustrated this mind-set when he told the Washington Post: “We don’t need a lot of Jim DeMint disciples. As soon as they get here, we need to co-opt them.”26
This was how it had always worked in D.C., of course, and there is a natural tendency for power to corrupt, as Lord Acton famously warned. But something was different this time. The quality of the freshmen was markedly higher than average, in terms of their commitment to individual freedom and limited government. More important, there was now a constituency back home that was serving as an effective counter balance to the corrupting forces inside the Beltway. While Lott’s comment reflected how out-of-touch the mainstream media and the Republican establishment were about the strength of the Tea Party movement and the conviction of Tea Party candidates like Mike Lee, it was a prediction validated by history. When Americans rose up in 1994 to throw the bums out, they promptly went back to what they were doing before, assuming that the election had fixed the problem. Lott’s comment illustrates the worst kind of cynicism—that candidates like Mike Lee were just saying what needed to be said to get elected and would be malleable and could be “co-opted” once they achieved their self-interested goals at the ballot box. That, after all, is what Trent Lott had done. He came to Washington to do good, and ended up doing really well. For himself. Such a perspective fits with other establishment Republicans who did exactly that to get elected and reelected.
But Mike Lee was a different breed of political animal. As one of the senator’s aides explained: “If it’s perceived you’re challenging authority, someone [in leadership] will put their arm around you and say, ‘Hey son, that’s not the way it works around here.’ But Mike Lee doesn’t care if that’s the way it works around here.”27 Indeed, Mike Lee would politely, respectfully, directly, and publicly challenge the authority and hierarchy of the Republican establishment in his first few weeks in office. Before he was even sworn into office, Lee, a constitutional lawyer, had started drafting a Balanced Budget Amendment to the Constitution that would become the new gold standard of budget reforms, both inside and outside the Washington Beltway.
AMENDING THE CONSTITUTION
AS A YOUNG ECONOMIST AT THE U.S. CHAMBER OF COMMERCE IN the early 1990s, I had been in charge of federal budget policy and budget process reforms like the BBA. There was a heated debate back then about the proper structure of a BBA. Was the goal to balance at any rate of spending, even if it meant constitutionally mandated tax increases? Or was the goal to eliminate deficit spending and the unchecked growth of government, reflective of the clear intentions of the Founders? I was unambiguously in the second camp, and there was a pitched battle then between those legislators who advocated a simple BBA, which allowed a simple majority to raise taxes to balance the budget, and those of us who believed that any amendment to the Constitution had to be done right, or not done at all. We wanted “supermajority” limits on taxes, spending, and the size of government.
The simple BBA was then championed by the late Democratic senator Paul Simon of Illinois. Simon wanted to grow the size of the federal government, and he wanted the constitutional mandate to raise the taxes to finance that growth. He was an unabashed big government progressive. In his failed 1988 run for the Democratic nomination for president, Simon distinguished himself by running to the left of other contenders, including Jesse Jackson, Al Gore, and Michael Dukakis, by saying, “I am willing to use the tools of government to work on the problems we have.”28 According to a 1987 Houston Chronicle account of his campaign:
Simon, a traditional Democratic liberal but one who has advocated a mandatory balanced federal budget, was reminiscent of unsuccessful 1984 Democratic nominee Walter F. Mondale in bringing up the politically sensitive issue of taxes. . . . Simon said he is the only presidential candidate of either party who voted against both the federal income tax cuts enacted in 1981 and 1986. He said the tax cuts bloated the federal deficit and chiefly benefited the wealthy. . . . Simon has supported some tax increases and says more revenue increases are needed. Full employment, through a New Deal–style public works job program, is Simon’s idea of one way to stimulate the economy and raise needed revenue.
Simon said in his announcement: “I stand here as one who is not running away from the Democratic tradition of caring and dreaming. I do not want the Democratic Party to forget its heritage in order to become more acceptable to the wealthy and powerful. One Republican Party is enough.” . . . One of Simon’s pet legislative projects is a bill to create a Guaranteed Job Opportunity Program under which public works jobs would be provided to anyone who wants to work.29
Oddly enough, the simple BBA long advocated by Simon was picked up by “conservative” Republican senator Orrin Hatch in 1997. His version was almost identical to Simon’s progressive legislation in 1992 and 1994, requiring only a simple majority for a tax hike.30
On January 26, 2011, now a six-term senator from Utah and one of the most powerful and longest-serving Republicans in the Senate, Hatch introduced a new version of the Balanced Budget Amendment. This was part of a conspicuous effort to rehabilitate his conservative credentials in Utah in the wake of his colleague’s defeat at the Utah Republican Convention the previous spring. Needless to say, Hatch’s 2011 version was better than his 1997 version, requiring a two-thirds majority vote for a tax hike, but it was flawed in other sections. Hatch’s 2011 budget amendment capped spending at 20 percent of GDP, allowing Congress to exceed this percentage with a two-thirds majority. Twenty percent is just too high, and would lock into the Constitution the expansion of government taken on under the Obama (and Bush) spending sprees. It also allowed Congress to get out of implementing a balanced budget, by raising a simple majority vote based on a vaguely defined “threat to national security.” There was also no requirement of a supermajority vote to increase the debt ceiling.31 Hatch’s early list of cosponsors reads like a Who’s Who of Republican establishment politicians, including Senators John McCain (Ariz.) and Olympi
a Snowe (Maine).
Unknown to Hatch, Senator-elect Mike Lee had chosen not to follow the Deseret Morning News’ suggestion that he should stay quiet as a freshman, and had already drafted his own version of the Balanced Budget Amendment. I had seen a draft of the young legislative entrepreneur’s amendment in December 2010, and it was the best version I had seen, much better even than the ones I had supported in the early 1990s. It was airtight. Once sworn into office, Lee introduced his own legislation—just a week after Hatch’s presentation, on February 3, 2011. Like Hatch’s version, Lee’s Balanced Budget Amendment included a two-thirds majority for any tax hike. But that’s the only major similarity. Lee veered away from Hatch’s version with a much more fiscally conservative approach. Lee’s version included a spending cap at 18 percent of GDP (the postwar average, prior to the Bush-Obama spending spree) and required a two-thirds majority to raise the debt ceiling.32 Mike Lee’s list of cosponsors was much shorter than Hatch’s, and included Senators Jim DeMint (S.C.), Rand Paul (Ky.), Marco Rubio (Fla.), and Pat Toomey (Pa.).
Why did Lee go against conventional wisdom on what the National Journal called Hatch’s “signature issue”?33 Lee explained that this was what he was elected to do. “I was elected in part on [pushing the BBA]. And I think it’s the most important effort of this Congress, to get something like that done.”34
On February 14, 2011, I spoke on a CPAC panel discussion of the BBA. At the last minute, Hatch had been added to the panel. Given that FreedomWorks had come out strongly in favor of the Lee approach, it was an interesting dynamic, to say the least. I reiterated my long-held view, having watched progressives like Paul Simon corrupt the concept of the BBA, that any amendment to the Constitution needs to be done the right way. After I spoke, the senior senator from Utah leaned over to speak to me. “The problem with an eighteen percent cap on spending,” he said, “is that the Democrats won’t go along with it.”
This logic has been the problem all along. It demanded that a BBA needed to be “bipartisan,” that we needed to work across party lines to get anything done. It makes no sense. Wasn’t this reaching across party lines the very form of two-party collusion that caused our government’s massive debt burden in the first place? Hatch himself had collaborated with Senator Edward Kennedy, the Liberal Lion from Massachusetts, in a major expansion of government-funded health care known as “S-CHIP” in 1997, the same year he picked up the cudgel for Paul Simon’s progressive BBA. It all makes your head spin.
When it comes to drafting legislation, isn’t a better approach wholly nonpartisan? Shouldn’t legislation be drafted based on what is needed, not just on what would be acceptable to the very political forces that caused the problem you are attempting to fix?
That’s the approach Lee had taken, the one that his hometown paper considered naive. Prior to the rise of the Tea Party movement, someone like Lee bucking authority would likely have been ignored by Hatch and the Republican establishment or even punished with poor committee assignments and other repercussions.
But the rise of the Tea Party movement changed everything. As Lee noted prior to his impending election: “Can one person make a difference out of 100? No. But I won’t be just one person. I’ll be aligned with a number of other people who share these same principles. They can ignore one person, but they can’t ignore 10.”35 Lee was right. He was not ignored. After several rounds of negotiations, Hatch accepted the major parts of Lee’s Balanced Budget Amendment. The new version of the BBA, agreed to by Lee and Hatch, included Lee’s 18 percent cap on spending as well as a three-fifths majority requirement for any debt ceiling increase. Additionally, Lee strengthened Hatch’s waiver for vague “threats to national security.” Rather than a simple majority, the newly revised Amendment required a three-fifths majority, in the event of “imminent and serious military threat[s] to national security,” and permitted a waiver for “the specific excess of outlays for that fiscal year made necessary by the identified military conflict.”36 This compromise bill was fully endorsed by the forty-seven members of the Senate Republican Conference.37 After just a few weeks in office, Lee had accomplished something that no other Republican had ever accomplished, uniting the entire Senate Republican caucus around the right BBA.
How did Lee succeed? Part of his ultimate success at the negotiating table was due to his legislative entrepreneurship. He was willing to stick his neck out and fight for what he believed in, regardless of political consequences. And by taking such risks, he forced the Republican establishment to listen. Equally important was the strength of the Tea Party movement. Not only did Lee have a number of other senators, including Jim DeMint and Pat Toomey, stand up with him, but he had the majority of American voters standing with him as well.
Of course, there was another dynamic at play. Senate Republicans, starting with Hatch himself, were worried about a possible Tea Party primary challenge against the senior senator from Utah. As Politico reported, “Twice [in March 2011], Hatch voted with Lee and a handful of other Republicans against short-term spending bills because their cuts weren’t deep enough. Some of Hatch’s GOP colleagues have watched with amusement as the veteran seemed to mimic the young senator who’s gotten the attention of the base. ‘You can’t get a piece of paper between them,’ a top GOP senator said with a laugh.”38
Discerning the authentic from political artifice is a challenge inherent in politics. But now the facts about legislative history were available online, unfiltered, and easily accessed by mere citizens. There was a rebalancing of power going on, which was undermining the privileged access to the right information by insiders.
BY THE NUMBERS
OF COURSE, THE WHOLE DEBATE OVER A BALANCED BUDGET AMENDMENT to the Constitution begs the question: How would you balance the budget? This is a legitimate question, and many of us were rightly skeptical about advocates of a BBA who never seemed to find specific spending programs to cut or eliminate. The question had also taken on a “gotcha” quality, used by reporters when interviewing grassroots protesters, as if they were required to know the entire federal budget chapter and verse before they could make the argument that government was spending too much money it did not have.
Indeed, every line item in the entire federal budget has a special interest prepared to fight for a privileged position, subsidy, earmark, or handout. Balancing the budget takes the courage of one’s convictions, and the hope that the American people will stand with someone willing to be honest, someone willing to outline priorities based on what government can actually afford instead of the sum of all wants, legitimate or otherwise.
The 2010 election sweep not only shifted the gavels in Congress, it also elevated a number of legislative entrepreneurs who would transform the all-important budget debate. The young Paul Ryan of Wisconsin now chaired the House Budget Committee. And the new freshman class included a number of legislative entrepreneurs, eager to translate one of the key planks of the Contract from America—“Restore fiscal responsibility and constitutionally limited government”—into substantive, detailed legislation.
Understanding that “budget drives policy,” many of the new freshman class began looking ahead to the big budget fight they knew would take place in the spring. The new majority’s first budget needed to be game-changing. But instead of waiting passively for their leaders to come up with a plan, these entrepreneurs decided to get ahead of the curve and shape the outcome themselves, by putting together their own plans. They rolled up their sleeves, fired up their spreadsheet programs, and dug into the eye-glazing minutiae of the federal budget.
Budget fights are inherently political, and budget politics isn’t a game for the faint of heart. It requires courage, hard work, and discipline. Shifting the entire Washington debate from dramatic spending increases to dramatic spending reductions is a huge undertaking. You can’t balance a $3.6 trillion budget, 40 percent of which is borrowed, by raising taxes, trimming around the edges, or eliminating “waste.” You have to zero out dozens of agen
cies and hundreds of programs, and, yes, even eliminate some cabinet-level departments. You have to get Uncle Sam out of whole lines of business. Every item you identify for elimination is sure to be ringed with a bodyguard of vested interests, poised to repulse any threat. Every program, you’ll be warned, is a “sacred cow” that simply cannot be touched lest the world end and the heavens fall.
A few days after the new Congress convened, Dick Armey and I took to the pages of the Wall Street Journal to offer our own suggestions for “What Congress Should Cut.”39 We laid out a bold agenda, specifying more than $3 trillion in immediate program cuts, reforms, and eliminations. Or at least it seemed bold at the time.
We began by pointing out that if Congress simply returned to the baseline before the supposedly “temporary” stimulus bill of 2009, $177 billion per year would be saved, and $748 billion over ten years. And if we were to go back to 2007, the beginning of the Pelosi Congress, the savings would be even bigger: $374 billion a year, or $1.56 trillion over a decade. Under realistic assumptions, repealing Obamacare would save an additional $898 billion over ten years. Still more savings, we noted, could be realized by cutting the cord between taxpayer wallets and Fannie Mae and Freddie Mac, whose bailouts had already cost taxpayers more than $127 billion and could end up costing as much as $1 trillion. Then we listed a series of additional ideas:
Scrap the Department of Commerce and the Department of Housing and Urban Development ($550 billion). Corporate welfare agencies, HUD, and Commerce serve mostly as giant ATM machines for private interests.
Scale back the number of government employees to fiscal year 2008 ($35 billion).
Eliminate subsidies for ethanol and unproven energy technology ($170 billion over ten years). These wasteful subsidies merely drive up food and energy costs.