IMAGINE a panel of eighteenth-century physicians with a royal patient who has a persistent fever and a hacking cough. Learned doctor Newt Gingrich wants to bleed three pints, learned doctor Richard Gephardt one. Doctors Bill Clinton and Bob Dole want to split the difference at a quart, but they can't decide which of them should make the incision. The next day the patient has acute pneumonia; the following day he dies and the kingdom goes into mourning.
That is what our political debate increasingly resembles. Led by the politics-is-a-game media, we have defined American politics along a single right-to-left dimension. We know that the new conservatives of the House of Representatives are on the right and the old liberals of the Kennedy-Johnson tradition on the left. And the votes are in the middle, so that's where President Clinton and ex-senator Dole have gone. The middle of the road may be mathematically equidistant from the right and the left, but the symbolic middle toward which both candidates have moved is meaningless for making real national policy.
- The Uncertain Leviathan, by Jonathan Schell (August 1996) Spectators, pulse-takers, anger and frustration -- a look into the void of American politics.
For liberals it is worse than meaningless. It is harmful, because most of the terms defining the political debate are inherently conservative: "less government," "middle-class tax cut," "tough on crime," "abolish welfare as we know it." And for most Americans, who just want solutions to the nation's problems, the symbolic middle is useless, because it provides only symbolic solutions. We need real solutions. The correction of our national problems requires neither right nor left, neither moderation nor extremism. The political debate needs a new dimension: reality.
The issue that best represents the grip of symbolism on the public debate is balancing the budget. There is no difference for Clinton and Dole to split on this issue, because the Administration and the Republican Congress have agreed to balance the budget by 2002. A balanced budget has become the Holy Grail of public policy, a symbol that no politician dares to question. Meanwhile, in the real world of tradeoffs, where rarely do all good things go together, the effort to make that symbol an achieved fact is likely to slow the country's economic growth, increase unemployment, and even trigger a recession.
Other examples of the politics of symbolism can be found in categories from taxes to social programs -- categories that are not far apart, since where the money comes from is inextricably linked to where it goes.
THE Administration and the Republican Congress agree on the need for a middle-class tax cut. Why? Aside from the excellent politics of handing out money, the tax issue is based on four symbol-clotted myths plus one clear untruth that everyone knows as such and almost no politician mentions:
1. Tax cuts, balanced by cuts in government expenditures, stimulate economic growth and employment. Wrong. The supply-side theory is that if you let people keep more of their earnings, they will work harder. That is probably true, but most economists agree that it is a very limited truth -- certainly as it applies to small shifts in current low marginal tax rates. Tax cuts do stimulate growth, but primarily on the demand side. People with more after-tax money in their pockets will spend more, and their buying will increase employment. But if the tax cuts are balanced by cuts in government expenditures, the people who were receiving money from the government will have less of it to spend, and that will decrease demand, offsetting the impetus that tax cuts have given demand and thus doing little to increase growth.
2. The proposed tax cuts are for the middle class. The middle class approaches motherhood as an American icon, but at least motherhood is definable. President Clinton has proposed cuts for couples with incomes up to $120,000; the Republicans initially went much higher, although they have now come down. But the middle 50 percent of American families make $15,000 to $50,000 a year; only one family in six has an income above even $75,000.
3. Federal taxes are being used to equalize incomes. The debate rages over whether they should or should not be. In fact the redistributive effects of federal taxes are mild at best (or worst). Families with incomes of less than $30,000 pay up to 13 percent of their income in taxes; those above that level do pay significantly more, going above 20 percent, but there is little variation among the groups making more than $30,000.
The alleged leveling effect of taxes calls forth two further myths. The conservative one is that federal taxes are confiscatory, but at an average tax rate that is effectively less than 25 percent for families with incomes higher than $200,000, confiscation is truly mythical. The liberal myth is that a more egalitarian distribution of income can be achieved primarily by playing with income-tax rates. Ronald Reagan's 1986 tax reform reduced progressivity, although loophole-tightening compensated for that to some degree. In focusing on income taxes, however, liberals ignore the really regressive feature of the tax system -- Social Security payroll taxes, which are levied only on wages and salaries of less than $62,000, thus exempting not only all pay above that level but also interest, dividends, and capital gains. A truly progressive tax system -- that is, one that takes proportionally more from those with higher incomes -- would look first at payroll taxes.
4. Federal Entitlements and other direct subsidy payments are questionable pieces of pork, whereas federal subsidies provided as tax reductions are rewards for virtue. This is highly debatable. Entitlements are defined as payments available to all those who meet certain conditions -- for example, poverty or willingness not to plant corn. The total cost is determined by the number of applicants and the amount paid to each. That definition of entitlements, however, fits not only direct payments but also most tax deductions -- at least as defined by many economists and some tax lawyers. One example of the mythological difference between tax and expenditure subsidies lies in housing. The deductibility of mortgage interest is an entitlement that costs the federal government more than $50 billion a year, and it goes mostly to middle-income homeowners along with better-off owners of expensive or multiple properties. Politically, the mortgage-interest deduction is viewed as almost pure virtue, to be continued even under many proposed "flat tax" plans. It costs twice as much as federal expenditures for public and other low-income housing -- popularly considered a dubious subsidy, and one that is likely to be reduced significantly in the drive toward a balanced budget.
Many other expenditures will also be reduced in the name of budget balancing. Since the deficit is the total of expenditures minus the total of tax revenues, the other way to move toward budget balance would be to increase taxes. What is being proposed, however, by both the budget-balancing Congress and the President, is to cut taxes. The great untruth is that this is somehow consistent with movement toward a balanced budget. It is not, and everybody knows it is not.
Political hypocrisy is hardly unprecedented, but it has seldom before provided the unquestioned basis for national political dialogue. The problem is not that homeownership and other tax entitlements are unjustified, or that tax cuts are a bad way to stimulate economic growth, or that the tax system should be used to redistribute income more efficiently. These are legitimate matters for debate. But they are not being debated. Instead the tax debate in this campaign focuses on which symbolic tax cuts should be given to the symbolic middle class in the symbolic drive to balance the symbolic budget.
THE discussion of "social programs" -- federal programs intended to help people rather than, for example, the environment or the physical infrastructure -- abounds with myths. At least three of them have to do with entitlements.
1. All entitlements are social programs. Incorrect. Many go to business, particularly if we include tax entitlements.
2. Most entitlements go to the poor and minorities. Not even close to true. Social Security, federal retirement, and Medicare, all of which go mostly to the middle class, account for 70 percent of total social entitlements. Aid that goes mostly to the poor, including "welfare," food stamps, and Medicaid, constitutes about 25 percent, of which less than one tenth -- two percent of total social entitlements -- has been for the notorious Aid to Families with Dependent Children (AFDC) program.
3. Social Security shouldn't be considered a social program because individuals pay for themselves with their contributions. Never been true. Almost all recipients of Social Security pensions receive much more in benefits than they have ever put in. The difference is federal subsidy.
But it is the symbolic two percent for AFDC -- "welfare mothers" -- about which the political debate has long raged, with Clinton and the Republicans splitting differences and splitting hairs until Clinton finally accepted an essentially Republican bill, which will phase out AFDC, ending welfare as a federal entitlement. Since AFDC is at the core of what many experts as well as laypeople see as the "welfare syndrome" -- the breakdown of the family among the dependent poor -- its abolition may be necessary for long-term change, as both Clinton and the Republicans claim. But ending AFDC cannot by itself restore families or heal poor neighborhoods, and children's advocates on the liberal side are surely correct that ending AFDC will cause traumatic short-term suffering for their innocent victims -- children in welfare families.
In any case, that is what the debate should be about, not the symbolic two percent of social-entitlement expenditures.
INDEED, the focus on cutting the two percent illustrates one of the two basic myths, one conservative, the other liberal, that distort the debate over federal social programs.
The conservative myth is that spending less is the way to achieve more. AFDC reform provides an example of why that is unlikely. The strong American consensus is that the objective of welfare reform is to move people off the AFDC rolls and into jobs -- a reasonable and perhaps realistic goal for most recipients. Two central requirements for such movement are that there be jobs for welfare people to take and that there be child care for the AFDC mothers who are at the heart of the problem. But the economy has seldom made sufficient or sufficiently attractive jobs available at lower levels, particularly in recent years. Pushing welfare recipients off the assistance rolls and into employment will thus necessitate public funding of community jobs as a last resort for those who cannot find employment in the private sector. That will cost public money. So will child care.
Together, these two requisites mean that if welfare reform is to move recipients into jobs, it will take more, not less, money -- at least for what may be a very long transitional period. That was recognized in the Family Support Act of 1988, sponsored , which was never effective, largely because it was never funded as intended. It is also recognized in the experimental welfare reform of Republican Governor Tommy Thompson, of Wisconsin, embraced by both Clinton and Dole. The essence of the Wisconsin reform -- public jobs when private ones are not available, and publicly funded child care -- meets the objectives of liberal as well as conservative reformers. Neither Clinton nor Dole, though, has faced up to the fiscal implications of the Wisconsin experiment or of the Republican "reform" bill signed by the President: that federal budgets for the next five years should provide funding increases for welfare reform.
Nor is the spend-less-get-more mythology confined to welfare. In education, for example, conservatives contend that what is needed is structural reform, not "throwing money at the system." Maybe so, but it is generally agreed that small classes work better than large ones, and small classes require more teachers and thus more money. Even more generally agreed is that good education requires good teachers, and as in every other line of economic endeavor, it takes good pay to attract good people (that is certainly what conservatives argue in the case of corporate executives). That, too, takes money.
If spend less, get more is the conservative myth, the liberal one is that we know what would work if we could only get the money to spend. Mostly we don't know. Looking again at jobs, for people on welfare and others, conservatives along with liberals generally accept the wisdom that the key is more training. Unfortunately, almost all the evidence points the other way. At least for welfare recipients and other people with limited skills, training has very little effect on long-term job prospects. Some exceptions exist, but they have proved very difficult to replicate on a large scale.
Similar doubts arise regarding many other social programs, even such a highly touted one as Head Start, for preschool children. Head Start does have immediate effects, but much of the evidence indicates that they fade as children go through the regular school system. The fault is almost certainly with the schools rather than with Head Start, but that criticism carries the dismal implication that everything must work for anything to work.
In fact some programs do work on a stand-alone basis. The food-stamp program, in spite of occasional abuses, has prevented widespread hunger among poor Americans, and its companion school-lunch program has supported child nutrition rather well. In these cases the facts have overcome some negative mythology; fraud certainly exists, for example, but it is hardly rampant. A related program, for nutrition of women, infants, and children (WIC), has never done as well politically, even though it is widely recognized that good pre-natal and postnatal nutrition is crucial to the proper mental and physical development of children.
We should do what we know how to do, but that's limited. One crucial example is that we have no real idea how to keep children in problem families from becoming problem parents starting new problem families. One logical answer would be to remove children at risk from such families at an early age. Newt Gingrich's orphanage scheme was too pat an idea and too easy to caricature, but the issue he raised deserved discussion rather than the dismissal it received as an unacceptable symbol. If the prize of capturing the right symbol -- the sainted "middle class" -- is often political victory, the price of using the wrong one is as often defeat. Thus is public policy made hostage to public relations.
Abrogation of the opposing myths of spend less, get more and spend on everything could make it possible to spend sufficient money on programs that work while using experimentation and evaluation to invent and search for more. Instead the Republican Congress has been hell-bent on spending less for almost everything (except defense), while the response of the Clinton Administration has been to fight hard for symbolic expenditures for a few more children here, a few more policemen there, and a few volunteers spread around everywhere.
Symbolism has always been a necessary part of political life. But most past symbolic stances, from preserving the Union to defeating the Evil Empire, have been connected with reality. Whether it is the influence of the media or something deeper, the connection is becoming tenuous. So is the ability of the nation to solve its real problems.
Illustration by David Suter
Copyright © 1996 by The Atlantic Monthly Company. All rights reserved.
The Atlantic Monthly; October 1996; The Empty Symbolism of American Politics; Volume 278, No. 4; pages 80-84.