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The online version of this article appears in three parts. Click here to go to part one. Click here to go to part two.

The Forbes Postcard

IT is taxes and spending, the Republicans' bread and butter, that best show how superannuated the party's agenda is. Just as the Democratic Party fell apart in the seventies and eighties when it could add no more to its proudest achievement, the social safety net, the Republicans are finding that their tax revolution is complete and they have no more reforms to offer the public that are sensible even on their own terms.

However much the Democrats may have derided Reaganomics, and however haphazardly it may have been implemented, its central insight -- that beyond a certain level taxes retard investment, hinder economic growth, and lead to declining tax revenues -- was merely common sense. At the beginning of the Reagan Administration taxes were indeed at such a level -- 70 percent for top earners. Today, with top marginal rates in the 30s, they're not. In a climate like this not only do tax cuts always produce less revenue, but modest tax hikes, such as the ones in Clinton's 1993 budget, produce more. Particularly now that U.S. interest rates are highly competitive in a rapidly globalizing capital market, tax cuts can no longer be justified on supply-side grounds. With the budget back in balance (owing partly to Clinton's rate hikes for top earners), and with voters leery of going back into the red, tax cuts are hard to defend on political grounds, too.

Tobacco Lobby There is, however, a way that Republicans can keep promising to cut taxes. The old-fashioned way: by cutting spending. This should play to a Republican strength, because cutting spending means shrinking government, which has always been the noblest and most stirring part of the Republican philosophy, because it means giving people more freedom -- and, arguably, not just economic freedom. In 1994 the Republicans promised exactly that with the Contract With America, the list of ten propositions -- tax cuts, social-service cuts, and such government reforms as term limits -- announced as a manifesto six weeks before the 104th Congress was voted into office. There were two problems with the contract. First, two thirds of Americans didn't know it existed. Second, Republican polling, done by Frank Luntz, had been fraudulently presented to the public as showing that the contract commanded 60 percent support in all its particulars. An NBC/Wall Street Journal poll, in fact, found that people disagreed, by 45 to 35 percent, "with most of what the GOP House is proposing to do."

The structural reforms in the contract were the most popular of its items -- although all the Republicans promised to do was to bring them to a vote. The Republicans never succeeded in passing the electoral reforms (like term limits) explicit in the contract. Nor could they have, as they well knew, given the impossibility of winning enough Senate votes. What's more, running as the "revolutionary" overthrowers of a corrupt system tends to produce self-delegitimizing victories. If the reform-minded "Perot voters" who played such a big role in the Republicans' 1994 victory were preoccupied with systemic -- not economic or cultural -- matters, then the very fact that the Republicans could get elected to a majority robbed the party of an issue.

It was the small-government part of the contract that Gingrich publicized and pursued most forcefully. In a series of maneuvers that owed much to his dismal tactical judgment, the new Republican majority frightened voters with what appeared to be a recklessly anti-government agenda. Most famous were the two government shutdowns in the winter of 1995-1996, but there were smaller confrontations as well: over school lunches, whose federal subsidies the Republicans wanted to eliminate; over disaster relief to the flooded Midwest, which Republicans held up to win budget concessions; over tax cuts that almost exactly matched Medicare cuts ... These minor incidents mobilized much of the American public on behalf of a cause it didn't know it espoused: keeping government roughly the same size.

Gingrich had maneuvered the Republicans into a position where either they stood for the noblest kind of self-reliance and freedom or they stood for nothing. As soon as self-reliance was shown to be a bit less popular than Frank Luntz's bogus polling had assured them it would be, they decided they stood for nothing. There were still plenty of opportunities to carve out positions defending freedom against Democratic depredations. But the Republicans wanted none of it. Look at cigarettes: for all the money the party has received from tobacco interests, it is now seemingly impossible to find a Republican who will publicly disassociate himself from the largely Democratic campaign to regulate smoking. Look at affirmative action, the linchpin of the Democratic Party's monopoly on black votes: a petrified Gingrich was soon trying to bottle up in committee a bill that would have abolished it. In 1996 the Republicans chose as their presidential nominee Bob Dole, the archetypal stalwart of liberal-Republican support for the welfare state.

The Republicans have been on the defensive ever since. If they would abandon in a matter of months what they had proclaimed to be the heart and soul of their mission, then either they had been disgraceful panders all along or they were just as reckless as their opponents had said. They suddenly had the worst of both worlds. They were indeed too far to the right for much of the country on social issues. But they were too far to the left for the base that had sacrificed so much to bring them to this point.

To be fair, even if the Republicans were serious about shrinking government (and they're not), there are good structural reasons that people would begin to desert the party despite accepting its small-government message. There must be a reason that countries all over the world have demanded reforms in their welfare states -- and entrusted the more statist parties, which created the rickety structures in the first place, to enact those reforms. The reason may be this: A welfare state that funds itself on a pay-as-you-go basis, as all welfare states do, creates a "vesting problem." Voters, even voters who think of the Great Society as a con game and a wretched investment, are on the hook for somewhere between a quarter and half of the money they've earned in their lives. The costs are already sunk. The benefits, however, are in most cases delayed until retirement. Voters will thus be inclined to look kindly on the party that promises to defend the benefits they've already paid for, and to look askance at the party that says, "Just trust me." Particularly when that party is led by a pointy-headed, never-met-a-payroll academic like Newt Gingrich.

The Republicans' loss on the Contract With America set up a chain reaction of political catastrophe. When they gave up small government, they gave up any credible tax plan as well. Too bad: tax cuts were the part of Republicanism that everyone loved, provided the deficit was kept in check. When the Republicans can no longer promise tax cuts, they're left with only the most abrasive aspects of the Reagan message, kept under wraps throughout the 1980s: the southern morals business. If the Republicans didn't believe in shrinking government, they didn't believe in the freedom that it was supposed to promote -- which made it much harder to argue that their moral agenda was being advanced in the name of live and let live. And what did they have besides the moral agenda? A grab bag of minor issues dredged up from 1988: school choice, the Strategic Defense Initiative, tort reform, abortion. Worthy issues all, but none of them capable of winning elections.

So the Republicans, unable to promise tax cuts credibly, have decided to promise them incredibly. What's new is the language: regressivizing taxes is now couched in terms of abolishing the IRS and instituting a flat tax that you can file by filling out a postcard. Of course, since investment income is exempt from taxes under most flat-tax plans, the program is destined to be popular only until some Democratic strategist writes an ad showing that Steve Forbes would pay zero taxes on his enormous stock portfolio. The old Republican program to abolish estate taxes is advanced as the abolition of the "death tax." Even on entitlement reform, Gingrich's talk of "privatizing" Social Security has now yielded to rhetoric about giving taxpayers "personal accounts."

This is little more than a marriage of Reaganite issues -- on which the Republicans have already won their victory -- to Clintonite sweet talk. The Republicans would like to think that Americans are the dupes of a lecherous Arkansas sleazeball, just as the Democrats in the 1980s saw voters as gulled by a senile B-movie warmonger. But Clinton's success, like Reagan's, has to do with American beliefs and the extent to which he embodies them and his opponents do not.

The Hillary Cluster

THERE is an ideological component to Clinton's success and the Republicans' failure. The end of the Cold War, the increasing significance of information technology, and the growth of identity politics have caused a social revolution since the badly misunderstood 1980s. It's difficult to tell exactly what is going on, but in today's politics such subjects for discussion as Communist imperialism and welfare queens have been replaced by gay rights, women in the workplace, environmentalism, and smoking. On those issues the country has moved leftward. In 1984 the Republicans held a convention that was at times cheerily anti-homosexual, and triumphed at the polls. In 1992 the party was punished for a Houston convention at which Pat Buchanan made his ostensibly less controversial remarks about culture war. Reagan's Interior Secretary James Watt once teasingly drew a distinction between "liberals" and "Americans" while discussing water use, and pushed a plan to allow oil drilling on national wildlife refuges. By 1997 the New Jersey Republican Party was begging its leaders to improve the party's image by joining the Sierra Club.

This is in part a story of how successful parties create their own monsters. Just as Roosevelt's and Truman's labor legislation helped Irish and Polish and Italian members of the working class move to the suburbs (where they became Republicans), Reaganomics helped to create a mass upper-middle class, a national culture of childless yuppies who want gay rights, bike trails, and smoke-free restaurants. One top Republican consultant estimates that 35 to 40 percent of the electorate now votes on a cluster of issues created by "New Class" professionals -- abortion rights, women's rights, the environment, health care, and education. He calls it the "Hillary cluster." The political theorist Jean Bethke Elshtain calls it, more revealingly, "real politics."

The right-wing militia image And with this new landscape of issues Republicans aren't even on the map. Because of the Reagan victory, the Democrats went through the period of globalization and the end of communism amid self-doubt and soul-searching. The experience left them a supple party that quickly became familiar with the Hillary cluster. Bill Clinton's ideology here is necessarily an inchoate one, and in his heart of hearts he may be to the left of where the country is. But he is the first President to understand that the Hillary cluster is not on one side or the other of a partisan fault line (and that is his greatest contribution to American politics). The American people are not "for" or "against" gay rights. They overwhelmingly say they favor equal rights for gays -- but then draw the line at gays in the military. They're for AIDS-research funding -- but think gays are pushing their agenda too fast. Americans aren't "for" or "against" environmentalism. They believe that global warming is going on -- but waffle on whether major steps should be taken to block it. They have shown a tolerance for paying more taxes to protect the environment, but few list it as their No.1 concern when asked by pollsters.
From the archives:

  • "The Protean President," by Thomas Byrne Edsall (May, 1996)
    "Clinton ... has responded to the Republican sweep of 1994 by radically altering the goals and character of his presidency."

  • Such jagged political fault lines make Americans' ideology look ambiguous by old definitions. In fact, the Boston University sociologist Alan Wolfe doubts whether the old polarity of "conservatives" and "liberals" is any longer meaningful, at least on the increasingly important cultural issues. The big question is whether this blending of conservatives and liberals is happening at the party level -- whether President Clinton has effected a wholesale change in his party. Ed Goeas and other Republican pollsters say there's no indication that Clinton is enticing people back to the Democrats. The best evidence, however, from 1996 exit polls is that the Democrats are no longer a liberal party -- or at least they are far less liberal than the Republicans are conservative. Whereas 58 percent of Republicans identify themselves as conservative, only a third of Democrats identify themselves as liberal.

    To the Republicans, it doesn't much matter. They've missed all of this, and continue to campaign against the Democrats they wish they were contesting: against Jimmy Carter and his economy, against George McGovern and his foreign policy, against Jesse Jackson and his urban policy. They treat the past two presidential elections -- the worst back-to-back disasters that either party has suffered since Roosevelt clobbered Herbert Hoover and Alf Landon in 1932 and 1936 -- as aberrations, much as certain Democrats throughout the eighties insisted that the only "typical" elections since Truman were in 1960 and 1976. According to Jim Chapin, for decades a New York Democratic activist and now the senior policy adviser to the city's public advocate, "Republicans remind me of us in the late seventies and early eighties. They say, 'If you lay our policies out without telling people whose policies they are, they approve of them.' So what! Voters are merely making judgments based on the credibility of the party as an institution. And they're right. In 1980 I knew if people understood what many liberal Democrats really wanted, our vote would go down."

    People are finding out that the Republicans don't want anything at all, other than to re-elect enough of their members to keep enjoying the fruits of a congressional majority. Lacking a voice on the new 1990s issues, the Republicans are retreating to the issues on which they used to have a voice. In this they resemble those "boomerang kids" who after their first career reversal return home in their late twenties to live with their parents. Republicans are going home to Ronald Reagan but are finding that theirs is no longer the only house on the block promoting the most popular part of his agenda -- free-market economics. They're finding that there's nothing to do around the house except dress up their old ideas in the clothes of Clintonite insincerity. Where is the broad argument of a "natural majority" here?

    There is none. The Republicans are too conservative: their deference to their southern base is persuading much of the country that their vision is a sour and crabbed one. But they're too liberal, too, as their all-out retreat from shrinking the government indicates. At the same time, the Republicans have passed none of the reforms that ingratiated the party with the "radical middle." The Republicans' biggest problem is not their ideology but their lack of one. Stigmatized as rightists, behaving like leftists, and ultimately standing for nothing, they're in the worst of all possible worlds.

    That's why the Republicans have spent the past several months waiting for a Clinton scandal to blossom. Like the Democrats of the 1970s, they are now the party with a stake in institutional disruption and bad news. And their resemblance to the corrupt dynasty they overthrew does not stop there. Their party is now directionless, with only two skills to recommend it: first, identifying and prosecuting the excesses of its opponents; second, rigging the campaign-finance system to protect its incumbency long after it has ceased having any ideas that would justify incumbency. The Republican Party is an obsolescent one. It may continue to rule, disguised as a majority by electoral legerdemain. But it will be a long time before the party is again able to rule from a place in Americans' hearts.
    The online version of this article appears in three parts. Click here to go to
    part one. Click here to go to part two.

    Christopher Caldwell is a senior writer for The Weekly Standard and also writes a weekly Washington column for the New York Press. His articles have appeared in The American Spectator, Commentary, The Wall Street Journal, George, and many other publications.

    Illustrations by J. C. Suarès

    Copyright © 1998 by The Atlantic Monthly Company. All rights reserved.
    The Atlantic Monthly; June 1998; The Southern Captivity of the GOP; Volume 281, No. 6; pages 55 - 72.

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