In the past I’ve been a supporter of the moderate element in the Republican Party. I even blog occasionally for the Republican Leadership Council. They’re the heirs of Abraham Lincoln and Teddy Roosevelt and their socially liberal and fiscally conservative positions are at the heart of Republican tradition. I lean more libertarian, but I’ve always seen Republican moderates as natural allies with a lot in common with the libertarian wing of the party.
In the past when there has been disagreement between moderate Republicans and the more ideologically extreme wings of the party, the main thing which has redeemed the moderates in the eyes of doubters and justified party unity is that they have remembered the importance of fiscal responsibility, an essential Republican value which some other factions within the party seem to have lost track of in recent years.
But now, faced with an unprecedented economic crisis and a Democrat-dominated Congress running out of control, it looks like some of the moderates in the GOP are going to fail the party and fail the country by supporting the ill-conceived “stimulus” bill in some sort of misguided fit of irrational bipartisanship. The latest news reports suggest that Senators Arlen Specter (R-PA), Olympia Snowe (R-ME) and Susan Collins (R-ME) may vote with the Democrats to give them the 60 votes they need in the Senate to pass this massive spending package. Collins argues that their cooperation is justified because of $110 billion in cuts which have brought the cost of the Senate version of the bill back down to about the $800 billion total of the House version.
The problem is that despite the name which has been attached to it in an effort to provide positive spin, this is anything but a “stimulus” bill. The bill creates far fewer jobs than has been claimed, at a ridiculous cost of hundreds of thousands of dollars per possible job, and most of those jobs are short-term with no lasting positive impact. The tax cuts it contains are misdirected and will have very limited stimulus value. There’s still a great deal of pork and earmarked spending on pet projects. But that’s really all beside the point. We’re in the middle of a fiscal crisis which was to a large extent precipitated by overspending and overextension of credit, not just by the big banks but by the federal government. To spend almost a trillion dollars which the government does not have does nothing but compound the fiscal irresponsibility which created the crisis in the first place. It will further devalue the dollar, increase inflation and likely create more business failures and greater unemployment.
Last week Douglas Elmendorf, Director of the non-partisan Congressional Budget Office, made observations on the likely effects of the bill. He suggests that the beneficial effects of the bill will wear off quickly after about two years, and that the long term effect will be a reduction in available capital and ultimately a long-term reduction in GDP of between .1 and .3 percent. Elmendorf’s concerns are mild compared to those of prominent economists on both the political left and right who are increasingly unified in opposition to the bill. Over 200 of them took out an ad opposing it in the New York Times, saying that:
“It is a triumph of hope over experience to believe that more government spending will help the U.S. today. To improve the economy, policy makers should focus on reforms that remove impediments to work, saving, investment and production. Lower tax rates and a reduction in the burden of government are the best ways of using fiscal policy to boost growth.”
Relatively moderate Harvard economist Martin Feldstein who had initially supported the bill came out unequivocally against it in an editorial where he calls it “An $800 Billion Mistake” and specifically faults it for gross deficit spending with too little stimulus. In an article in the Wall Street Journal economists Alberto Alesina and Luigi Zingales sum up the problem with the bill succinctly: “Tax cuts have a much better effect on job creation than highway rehabilitation.”
Given all of this it would be a terrible mistake for Republican moderates to adopt a misguided “go along to get along” attitude and vote with the Democrats when standing firm on their belief in fiscal responsibility might be just what’s needed to find a better solution. It’s quite likely that doing nothing at all would be better than this bill. But at the very least, Republicans in the Senate ought to hold out for a bill which has less unnecessary spending and more genuine stimulus in the form of tax cuts for individuals and businesses.
I’ve always believed that moderate Republicans had remarkably good sense and the best interests of the people at heart. Like many others in the party I’ve put my trust in them over the years to balance out the voices of extremism because they could be counted on when it eally mattered. But if these three are going to betray the fiscally responsible traditions of the GOP and vote to support this disastrous bill, then they have clearly lost their way and will have failed as Republicans and as stewards of the best interests of their constituents and the nation.
You may want to contact these Senators and encourage them to develop some spine and remember their values. You can email them with these links: Specter, Snowe, Collins. These are alternate links because their Senate contact pages are being crashed by the volume of emails.