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Will 2010 Be Another 1994?

Five surprise developments in 2009 point to a great reversal this fall.

By From the March 2010 issue

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Election day, November 2, 2010, will either confirm the Democratic triumphs of 2006 and 2008, ushering in a renewed period of Democratic dominance and jerking America left as happened in the 1930s and 1960s, or it will echo the 1994 rejection of the leftward drift of united Democratic government under Clinton.

When Herbert Hoover was elected in 1928, there were Republican majorities in both the Senate (48-46) and the House of Representatives (238-194). Hoover endorsed protectionism, increased the top tax rate from 25 percent to 75 percent, expanded state spending, and responded to the collapse of the stock market on October 29, 1929, with subsidies, bailouts, wage and price controls, and tax and spending hikes.

When he left office in 1933 the Democrats held a 59 to 36 majority in the Senate and a 313 to 117 majority in the House. Democrats would use their supermajorities that reached a high of 76 senators and 334 congressmen in 1936 to change labor law, bringing the number of workers forced to pay union dues from 3.4 million in 1930 (11.6 percent of the workforce) to 14.3 million in 1950 (31.5 percent of the workforce), create the unfunded Social Security system, expand federal government employment to 2.6 million, and increase federal spending from 6.9 percent of the economy to 19.4 percent by 1952.

When Eisenhower was elected in 1952 Democrats held the House (235-199) and Senate (49-47). With Eisenhower's victory the Republicans won a majority in the House (221-213) and Senate (49-47). Ike vetoed the tax cut passed by the newly minted Republican Congress, maintained the top tax rate at 90 percent, and left office in 1961 with Democrats controlling the Senate (64-36) and the House (263-174). The 1964 LBJ election provided the supermajorities that created Medicare, Medicaid, and HUD and saw Congress come within a whisker of repealing state right-to-work laws. Federal spending on domestic programs grew from 11.3 percent of GDP in 1970 to 16.8 percent in 1980.

On the day George W. Bush was elected, Republicans commanded a 55-45 majority in the Senate and a majority of 228-206 in the House. Bush saw federal spending increase from 18.4 percent of GDP to 21 percent, raised the unfunded liability of Medicare from $7.0 to $13.5 trillion, took on the task of occupying Iraq and Afghanistan, and passed only temporary tax cuts that all expire on or before January 2011. When Bush left office, he bequeathed America a President Barack Obama with 70 percent approval ratings and a Senate with 59 Democrats and a House with a 257-178 Democratic majority.

Obama, Reid, and Pelosi moved quickly to use their majorities to ratchet up the size and scope of the state with a $787 billion "stimulus" and a second tranche of TARP spending of $350 billion. They tried to enact a cap and trade energy bill that would put all energy under federal control, "health care reform" legislation that would put 16 percent of GDP under federal control, and change labor laws to take away the silly requirement that workers vote before being forced into paying union dues.

Exactly one year after Obama, Reid, and Pelosi came together in power, they had increased the publicly held federal debt from $5.8 trillion to $7.6 trillion and increased the projected spending for the next 10 years by $1 trillion. The unfunded liability of Social Security and Medicare now stands at $22.3 trillion and rising. This deliberate explosion of debt and spending is designed to force permanent tax increases. Their ultimate goal is to impose a Value Added Tax (VAT) on top of higher income taxes. But Congress has failed to enact the three changes in law that would permanently alter the balance of power: rewriting labor law, nationalizing energy, and nationalizing health care.

How, why, did the Democrats fail to capitalize on their supermajorities in 2009? What did the Republicans do correctly, and will 2010, both in Congress and on Election Day, stop Democratic plans in their tracks or confirm a continued but perhaps slower march to statism?

IT WASN'T SUPPOSED to turn out this way. Obama began his presidency as one of the few presidents who could inspire fear in political Washington and the business community. He had power. He and Pelosi's and Reid's majorities could tax anything. He told bondholders with legal claims on General Motors to abandon them. He told the pharmaceutical industry to give him tens of millions of dollars to pay for propaganda for his heath care bill in return for his looting "only" $22.2 billion from the industry over the next 10 years -- it could, the godfather said, have been worse. The "powerful" Chamber of Commerce played multi-million-dollar weathervane, endorsing the TARP bailout extension and the stimulus package and bragging how open it was to "working with" the administration that viewed it as the class enemy. In early 2009 political observers believed the Democrats would add three seats to their Senate majority in 2010 by taking the open seats of New Hampshire, Ohio, and Missouri. Democrats in the House (all but two) cheerfully voted for the radical labor union power grab of Card Check, secure in the belief that union money would reelect them.

As 2010 began, polling showed that on the generic ballot likely voters said they intend to vote Republican over Democratic by 45 to 37 percent -- enough to guarantee a Republican House of Representatives. According to the Cook Political Report, Republicans will capture between two and nine Senate seats. That partisan advantage for Republicans has existed since June 2009 and contrasts with the Democratic advantage of 47 to 40 on Election Day 2008. To figure out if the Republican trend can continue into November it is necessary to understand what happened in 2009 to create what they call in wrestling a reversal.

There were five fortuitous surprises.

First, spending per se became a vote-moving issue. In the past, conservative activists and elected officials would argue against increased government spending, saying it would lead to a tax increase and/or inflation and slow economic growth. But voters had a strong tendency to wait until the tax hikes were enacted to create a political backlash: 1978 with Proposition 13, 1980 with the Reagan landslide, and 1994's Gingrich revolution.

The Democratic high command learned this lesson and organized all its tax and spending efforts to front-load the spending and leave the tax hikes for post-2010 and even post-2012. It was Obama's good luck that Bush's major tax cuts, the 15 percent rate for capital gains and dividends and the 35 percent top rate and the zero percent death tax rate, all expire in January 2011 -- two months after the 2010 election.

The politician most surprised that America reacted so strongly and so negatively to higher spending was Arlen Specter, then the Republican senior senator from Pennsylvania. He had planned to oppose the unions' push for Card Check and endear himself to conservatives by opposing Obama's health care -- as he had Clinton's -- and vote against tax hikes and whack liberal judges. When Obama offered him a deal -- vote for my stimulus spending and I will not engage in turn- out-the-vote efforts in Philadelphia-Specter had every reason to believe he had just ensured his reelection, dodging the Scylla of conservative opposition in the primary and the Charybdis of Philadelphia's ability to increase real and imagined voter turnout in the general.

Except...except that Specter's support collapsed overnight in reaction to his vote for stimulus spending. He decided he could never win a Republican primary and switched to the Democratic Party. This unexpected revulsion to overspending also expressed itself in the Tea Party rallies following Rick Santelli's rant on CNBC against government spending and bailouts. At least 600,000 and perhaps more than a million Americans rallied in more than 640 Tea Parties just before and after April 15. Those rallies were repeated on July 4.

The second pleasant surprise was that Republican leadership and the rank and file of elected officials refused the advice of establishment pundits to move left in the wake of the Obama 52 percent victory. Such advice was proffered by the same sources after Goldwater's defeat in 1964, after Watergate in 1974, after the Republicans lost the Senate in 1986, and in 1992 with the Clinton victory. Following November 2008, the establishment media predictably urged Republicans to give up, be "bipartisan" and "move to the center" (i.e., cease all opposition to the new ruling elite). These traditional voices were joined by "new" and "intriguing" and "cutting-edge" and "forward-looking" "upcoming leaders" and "brilliant" "conservative" voices -- given a microphone by said establishment press to promote the road taken by Quisling and Petain.

The third surprise was the ability of the Republicans in Congress to highlight the difference between the Democrats and themselves by keeping their party united in opposition. Despite the on-slaught of establishment press declaring all opposition to be hopeless, Republicans in the House were unanimous in opposing the stimulus package and the 2010 budget, and lost only eight votes on cap and trade. And on the "health care bill," Republicans lost only one befuddled congressman, Louisiana's Joseph Cao, who thought he was casting a pro-life vote after the passage of the Stupak amendment.

This unity contrasts with the 26 Democratic House members who voted for Gramm-Latta, Reagan's first-year program of budget restraint. And on the Reagan administration's "must win" legislation, 48 House and 37 Senate Democrats voted for the 198l Reagan tax cut. More recently, in 2001 Bush won 58 Democratic votes in the House for the abolition of the death tax and 187 votes for expanding IRAs and 401(k) accounts. Conversely, it was a sign of Democratic serious-ness and commitment to winning the 2006 elections when the traditional Democratic vote for free trade bills fell from more than 100 to only 15 on CAFTA for the express purpose of forcing Republicans in trade-sensitive districts to cast difficult votes.

The Senate is always the body more likely to have "mavericks" who can win a coveted spot on Good Morning America or even the cover of Time if they break with the party and endorse the Democrats' newest idea. Yet Republicans were unanimous in opposing Reid's 2,000-page health care bill. The Democrats could not even bring the cap and trade bills to the floor. Republican senators voted unanimously against the Obama FY 2010 budget and lost only three votes on the early test of the stimulus package (Specter, Snowe, and Collins).

One reason there was no grand compromise on health care was that the senators most susceptible to the temptation to "be in the room" and "be a player" were all up for reelection in 2010 and made their decision to go into full-blown opposition in August when they returned to their states and found that their town hall meetings were engorged with citizens furious at the idea of anything short of total opposition. McCain, Grassley, Enzi, Bennett (and derivatively Hatch) are all up for election in 2010 and, despite histories of liking to be in the room making legislation, were convinced by the August revolt that this would be unwise. Here the Tea Party movement had a measurable and critical role in the victories of 2009 -- greater than all the lobbying by businesses on K Street.

The fourth unplanned advantage conservatives had in 2009 was the discovery that Obama and the Chicago White House truly believed their own rhetoric. They believed (and still do) that taking a dollar out of the economy in taxes or debt and moving it somewhere else -- the stimulus spending -- will in fact create jobs and opportunity. Since passage of the stimulus bill promising to "save or create" 4 million jobs, the nation has lost 2.7 million jobs in the private sector and added 100,000 government jobs.

The left also believed its own assertions that the conservative movement was a shill for big businesses. It believed that if it neutralized the energy industry there would be no opposition to cap and trade. It neutered the electric power industry and yet the public shifted against cap and trade anyway. It neutered the pharmaceutical lobby, the health insurance lobby, and the National Federation of Independent Business. And yet the countryside still arose in opposition to the point that a Gallup poll released in mid-January 2010 showed Americans had come to disapprove of Obama's handling of health care by 58-37 percent.

The fifth game changer in 2009 was the collective decision by conservative activists and Republican elected officials to avoid the mistake we made in personalizing our objections to Bill and Hillary Clinton. Conservatives focused on Clinton rather than the bad policies of the congressional Democrats. Republicans ran tens of millions of dollars attacking Clinton in 1998 and voters didn't connect Clinton's personal problems with why they should defeat Democratic congressmen and senators. In 1998, Democrats gained five House seats when Republicans understandably believed they could and would win 20. Clinton's peccadilloes were such that describing them made even his most dispassionate critics sound "pornographic."

This time around, conservatives focused on criticizing Obama's spending and big-government approach to energy and health rather than on attacking him personally. Even better, criticism was correctly focused on Harry Reid of Nevada and Nancy Pelosi of San Francisco. The stimulus package was written by the Democratic Congress with little or no input from Obama. The 2010 budget was written by the Democratic Congress. The cap and trade and various health care reform bills were written by Congress. Obama gave speeches. The House and Senate Democrats have been writing and sometimes passing legislation. If the Democrats' agenda were a martini, Obama would be the vermouth -- only vaguely present.

The decision to avoid attacking Obama personally was made independently by tens of thousands of Americans. The signs at the Tea Party rallies focused on policies and Congress. There was much wisdom here. Why attack the first African American president, whose allies are begging for the opportunity to describe all opposition to trillion-dollar deficits as racially motivated? Why attack the president who for reasons distinct from his party and policies was at the beginning polling at 70 percent? And why attack the White House when the next target is Congress in 2010, when Obama will not be on the ballot?

AS WE ENTER 2010 there are now 256 Democrats and 178 Republicans in the House and 59 Democrats and 41 Republicans in the Senate. Republicans need to win 41 House seats net to gain a majority of 218. They contest in a field where 49 House seats are held by Democrats today in districts that voted for McCain in the losing year of 2008. There are 83 House seats that were carried by Bush in 2004 when he squeaked by with 51 percent of the vote. In 1994, Republicans gained 52 seats to win a 230-204 majority. That year 25 Democrats had retired from contested seats. As of this writing there are 12 Democrats leaving contested seats.

In early January, the generic ballot on which Americans are asked if they plan to vote Republican or Democratic for Congress showed a preference among likely voters for Republicans of 45 to 37 percent -- a 15-point swing from Inauguration Day 2009. In 1994, the Republicans never held a generic preference lead until the day they won the election.

In the Senate, where 36 of the 100 seats are in play, Republicans and Democrats must each defend 18 seats. Republicans need to gain 10 seats to win a majority, as a 50/50 split would let Vice President Joe Biden be the deciding vote. A win of five seats would ensure that (even with episodic defections from Maine or Arizona) Leader Mitch McConnell could cobble together 41 votes to stop any particular piece of legislation with the filibuster.

One year ago it looked as if the Democrats would gain three seats in the Senate. Today, Delaware has moved from solid D to likely R with the decision of moderate conservative Mike Castle to run and Beau Biden, the vice president's son, preferring to stay on as attorney general. North Dakota was viewed as safe territory to reelect Byron Dorgan but, facing overwhelming polling numbers, Dorgan has exited the field and popular moderate conservative Gov. John Hoeven has announced he will run. Arkansas Sen. Blanche Lincoln has desperately played the game of pretending to be a moderate or even conservative Democrat, but everyone has learned that Harry Reid owns her vote on everything from spending to taxes, unions, and health care. She polls behind every serious Republican in a crowded primary field. Illinois Democrats had every reason to believe they owned the seat vacated by onetime state senator Barack Obama, but their strongest candidates bowed out and Republicans are likely to nominate Congressman Mark Kirk, whose sole indiscretion as an economic conservative was the barely forgivable vote for cap and trade -- a vote he has forcefully and repeatedly repudiated. Kirk is now expected to win the general. In Pennsylvania, now-Democrat Specter is polling behind the man he beat in the Republican primary of 2004, former congressman Pat Toomey, onetime chair of the Club for Growth. Nevada's Reid is looking more and more like Tom Daschle and polls behind by double digits against either of his likely Republican challengers, Danny Tarkanian and Sue Lowden. Colorado's appointed senator Michael Bennett is polling behind longtime conservative statewide official Jane Norton. Indiana's Evan Bayh expected his $13 million coffer and undeserved reputation as a moderate to keep him safe, but he polls neck-and-neck with lesser known potential Republican challengers.

In New York and California vulnerable Democrats Kirsten Gillibrand and Barbara Boxer could lose in 2010, depending on who runs against them. And the three Republican seats once viewed as vulnerable -- New Hampshire, Ohio, and Missouri -- have strong Republicans running well who are viewed now as likely winners.

If the Republicans run the table as the Democrats did in 2006 and 2008, they will take the Senate. They will, at worst, solidify their ability to filibuster Obama's agenda for the next two years.

CAN OBAMA/REID/PELOSI RECOVER, change strategy, and avoid defeat as Clinton did between 1994 and 1996? It looks unlikely. Obama's reaction to losing in Massachusetts was to call for higher taxes on banks, dropping the stock market 500 points. The Chicago gang believes it has been insufficiently left-wing and anti-business in 2009. One cannot correct errors one does not see.

And the independents who broke for the Democrats in 2006 and 2008 in opposition to Bush's unending commitment to Iraq have shifted back hard against the Democrats' spending and debt policies. Independents who polled like Democrats in 2006 and 2008 now look like Republicans in their views on taxes, spending, and size of government, and they share Republican enthusiasm for getting to the polls in 2010.

Democrats have failed to replicate their political and legislative dominance of the 1930s and 1960s. This next year will tell us if Republicans can complete their reversal and repeat the successes of 1994.

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About the Author

Grover G. Norquist is the president of Americans for Tax Reform.