Spending Cuts – Who Cares?

Patricio Navia

Buenos Aires Herald, October 18, 2011

 

As the election season nears in the United States, the relative importance of spending cuts will decrease.  Talking about spending cuts is less popular than talking about new initiatives. Campaigning on fiscal discipline is less appealing for voters than promising funding for projects that are popular in the communities where candidates seek votes.  As candidates target specific communities and voting blocs, former commitments to balance the budget soon dilute into vague statements about fiscal responsibility.  Voters pressure candidates to make very specific promises that will result in higher spending and lower revenues.

 

With less than 3 months to go before the Iowa Caucus—scheduled for January 3, 2011—the field of Republican presidential candidates is narrowing. Though he is apparently nobody’s favorite, Mitt Romney appears as the inevitable second best most likely to get the nomination. The race still has some improbable candidates. To the far right, U.S. representative and Tea Party favorite Michelle Bachmann, libertarian representative Ron Paul and former Senator Rick Santorum are struggling to mount a challenge against Romney, whom they see as too moderate.  Former governor John Huntsman is an unconvincing centrist whose electability is higher among non-likely primary voters. Texas governor Rick Perry has had disappointing performances on recent presidential debates. His insufficiently reflexive comments have also damaged his standing in polls.

 

Romney’s inevitability has not been sufficient to counterbalance the little enthusiasm he generates within diehard Republican militants.  The recent surge in polls by African American businessman Herman Cain says much more about Romney’s weakness than Cain’s strengths.  After declaring that he left the Democratic plantation a long time ago—implying that African Americans are a captured quasi-slave voting bloc—Cain has alienated moderate voters by proposing to privatize social security and to introduce a tax reform that would reduce income tax and establish a national value-added tax. The so call 9-9-9 plan (9% tax on business earnings, income tax and sales tax) is a catchy phrase, but it is also off the ballpark in terms of policy debates. The Republican race will eventually come down to Romney against one challenger—drawn from the other 9 major Republican candidates. As long as he avoids self-destruction in the coming weeks, Romney will likely get the nomination.

 

The Republican Party is admittedly in a strange position. On the one hand, Republicans face a weak incumbent president in times of economic distress and high unemployment. On the other, the effect of the Tea Party has moved the center of gravity so far to the right that the Republican Party might end up rendering itself unelectable. Tensions between moderates and conservatives have intensified in recent weeks, worsening the already strong divisions between those who want to win the elections and those who do not want to compromise conservative principles.

 

A recent signal of the lack of control and party discipline is the actual calendar for the Republican primaries.  Tradition has it that Iowa must hold the first caucus and New Hampshire the first primaries.  The Iowa caucus is scheduled for Sunday, January 3, 2012. New Hampshire had initially scheduled its primary for early February. However, after Nevada and South Carolina—the other two states with early primaries—recently moved their primaries to January 14 and 21st respectively, New Hampshire will likely end up holding its primaries in early January. Thus, by late January, after the first few primaries, the field of Republican candidates will further narrow down and a frontrunner will consolidate.

 

By early March 2012, President Obama will have a likely challenger to run against. The Democratic Party machine will start its discrediting campaign, building on the negative message that is always at the center of the party primaries. In addition, because the permanent news cycle forces candidates to measure every word they say and an incorrigibly inattentive electorate only reads the headlines, the Republican likely candidate will not have the luxury to discuss public policy details or to outline his/her complex deficit reduction and job creation plans. Candidates have to summarize their message in ten second sound bites. As a result, the message will inevitably evolve into a vague promise to keep current entitlements and social programs and reduce spending simply by improving efficiency and reducing waste. Similarly, promises to increase revenues will be combined with commitments to reduce the tax burden on the middle class—a concept that is conveniently never defined. Concerned with keeping the programs they benefit from and making sure they won’t bear the burden of additional taxes, voters will shift their priorities from spending cuts to tax cuts—new and old—and social programs.

 

Just as the economy goes through cycles of expansion and contraction, the political discourse also goes through cycles where politicians focus on cutting and spending. When the electoral season begins, the cycle dominated by talks of spending cuts and fiscal responsibility gives way to promises of increased spending. After all, candidates win elections when they promise people better times not when they warn that difficult times will ensue in case they win the election.