Conor Friedersdorf

Responding to my post on Republicans losing the fight for public opinion on tax policy, Conor Friedersdorf says the Republican Party needs a more holistic approach to taxes and spending.

I’d add that the GOP must pair its affinity for tax cuts with palatable proposals for spending cuts, shrinking government waste, and improving efficiency. One reason the Bush Administration’s tax cuts are unpopular is that they are financed with borrowing, even as we wage expensive wars and expand the federal role in education. The thing to understand about fiscal conservatism is that the bond between taxing and spending cannot be severed, at least in the long run.

I agree wholeheartedly with Conor on the subject of linking taxes and spending, but I have one very serious concern with the rest of what he writes.  More on that in a moment.

Tax cuts are a tactic, not a strategy, but Republicans have found so much tactical success with tax cuts that they have come to think of it as sufficient in itself.  However, as Sun Tzu said, tactics without strategy is the noise before defeat.

Republicans have made a serious strategic mistake in becoming so dependent on "tax cuts", both as a way to win elections and as a proxy for "limited government."

Without spending cuts...

• ...tax cuts aren't really tax cuts.
• ...Republicans lose their traditional stronghold on fiscal and tax credibility (which would explain why the public actually trusts Democrats more than Republicans on taxes).
• ...Republicans end up playing a game of deficit chicken that ultimately favors the Democrats.

The problem, of course, is that Republicans can't focus on spending cuts, because they haven't had any significant, viable ideas for how to limit spending, and the Right hasn't yet figured out how to mobilize a major constituency around spending issues.  We can talk all we like about "ending the Department of Education", but it turns out that's much easier to say than to do.

We lack a price mechanism to connect taxes and spending in the minds of the public.

The public perceives the costs (taxes) and the benefits (entitlements, agencies, etc) as separate things, so entitlements and government agencies are about as popular as you might expect free benefits would be.

Back to my one concern with what Conor Friedersdorf wrote.

Alarms go off in my head whenever I hear Republicans talk about "shrinking government waste and improving efficiency" as a solution to the spending side of this equation.  Those are laudable things, sure, but the magnitude of the fiscal problems we face are so significant that waste and inefficiency - basically, any of the savings that can reasonably be had within discretionary spending - are trivial in comparison.

The spending problem is an entitlement problem.  If Republicans don't start coming up with major, structural solutions to the entitlement burden - fundamental changes to the underlying fiscal incentives in the federal government - then we might as well forget about tax cuts.  They're not possible, and politicians who claim they can give them to us are either patronizing or deluded (I'm looking at you, John McCain).

I think there are some good strategies that Republicans would be wise to pursue, but things like major federal accounting reform, entitlement means testing and line item budgeting don't seem to be on Republican radars.  

Republicans are playing small ball. That's a game they will lose.