Special Report

The Strategy of the Not So Smart Surrender

Respectable righties compete for the Colin Powell Prize.

By 5.13.09

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A national debate has raged among those on the Right, the former Right, and the never Right over how to approach the future. Even though the Republican Party just nominated a moderate who was thrashed by the most liberal-left Democrat nominee in history, who should have been eminently beatable for that reason, there are some who insist that future success lies in dumping conservatism and following the moderates ever more extremely.

The Winning Strategy: Dump the Christians, Raise Taxes

Colin Powell recently took the lead in making this case. He says the party has become too conservative, and Republicans should win back voters by campaigning for higher taxes. He recently told a business group that vastly overpaid him for off the cuff, uninformed comments, "Americans are looking for more government in their lives, not less. Americans do want to pay taxes for services."

If only he had explained that to Obama, who apparently was foolishly retro in campaigning on tax cuts for 95% of Americans. Powell also sagely told the business execs that Sarah Palin is "a very polarizing figure." Unfortunately, unlike Powell, Palin does have that nasty habit of winning elections by large margins.

Cheney responded to Powell's advice to the Republican Party by saying, "I didn't know that Colin was still a Republican. I thought he left the party when he endorsed Obama last year." John McCain apparently was not enough of a moderate for Powell.

Even more cutting was Noel Sheppard of NewsBusters.com, who said on Powell's tax point, "Which Americans want to pay more taxes, General? You mean the top 50 percent of wage earners that currently pays 97 percent of all federal income taxes….Or how about the bottom 50 percent? Are THEY asking to pay more?"

But Powell does have his supporters for tax increases. David Frum offers conservatives a roadmap for victory in his latest book Comeback: Conservatism That Can Win Again. While promising a new agenda, his actual proposals are almost all well-worn standard conservatism. His one "new" point: the taxpayer movement is dead and conservatives should rally around the idea of a fat new tax on carbon as the political wave of the future.

Just think of it. Not just higher taxes, but much higher gas prices, utility bills, electricity costs, and charges for natural gas and home heating oil. That's the ticket for electoral success. Too bad Obama has already beaten us to it with his cap and trade anti-global warming policies. Foolish me. I was looking to that as the electoral downfall of the Obama regime.

Those who have followed Frum's career see a pattern. He previously published a book arguing that the Republican Party was dead and needed a fresh agenda…in the summer of 1994.

The Tax Collector for the Welfare State

Then there is former supply-sider Bruce Bartlett, who recently advised conservatives and Republicans,

Historically, Republicans have come back from electoral losses by accepting the fact that Americans mostly like government spending. Rather than make a futile effort to take away something most voters want, Republicans have instead worked to make the welfare state function efficiently, target benefits to those that play by society's rules, and finance those benefits without additional debt.

Bartlett's examples of how this has been done successfully before: Dwight Eisenhower and Richard Nixon. But the modern conservative movement was born in revulsion to them.

Bartlett nevertheless continues, "I think conservatives would better spend their diminished political capital figuring out how to finance the welfare state at the least cost to the economy and individual liberty, rather than fighting a losing battle to slash popular spending programs. But this will require them to accept the necessity of higher revenues." How much higher? Even before Obama, the long-term projections for Bartlett's welfare state showed federal spending as a percent of GDP close to doubling from around 20% towards 40%. Add in Obama's whopping new entitlement for health care plus bailouts and associated debt, and federal spending alone would soar towards or past 50% of GDP. Add in growing state and local spending and Bartlett's strategy would make even Swedish socialists blush.

Those who fondly remember Bartlett from his supply-side and even libertarian days missed his columns in recent years denouncing the Laffer Curve as a fraud and the pro-growth effects of tax cuts as greatly exaggerated. Bartlett recently told me, "Wait until my next book." So much anticipation over that. His last book could be advertised exclaiming "Dozens of copies sold!"

The intellectual careers of both Frum and Bartlett seem to be a great struggle to live up to the standard of "What is original is not good, and what is good is not original." They might both get a clue from the fact that Ann Coulter's last book sold several times as many copies as all the too many books that both Frum and Bartlett have ever published.

The Fallacy of the Smart Surrender

What drives both Bartlett and Frum is the notion that we are doomed to much higher taxes and spending in any event, and where conservatives can be politically effective is only in advocating the tax increases that would be least harmful to economic growth. Bartlett explains, in what he thinks is an insight to build a career on:

If conservatives refuse to participate in the debate over how revenues will be raised, then liberals will do it on their own, which will likely give us much higher tax rates and a tax system that is more harmful to growth than necessary to fund the government. Instead of opposing any tax hike, I think it makes more sense for conservatives to figure out how best to raise the additional revenue that will be raised in any event.

I have called this the Strategy of the Smart Surrender. It says we have lost the battle for limited government, so let's just fight to modify the inevitable really big bad government for at least some conservatism around the edges. This strategy reflects bad judgment on both policy and politics.

We saw above how big and bad this government is really going to get without fundamental reforms. That is not a vision that can be tolerably fixed by tinkering around the edges. In particular, there is no pro-growth financing for this level of government.

Quite to the contrary, the spiritual devotion to this socialist vision of the far left that now runs the Democrat party is inevitably going to trash the American standard of living and any notion of prosperity. That will send the American people fleeing back to conservatives and Republicans. Such rapidly moving political and economic developments are already well under way. In fact, I expect 2012 to be a much grander version of 1980. But following Bartlett and Frum would leave the American people with nothing to come back to.

Moreover, neither Bartlett nor Frum have even begun to think outside the box. The alternatives we face in addressing the coming explosion of big government are not just tax increases or benefit cuts. Fundamental structural reforms of our entitlement programs and the welfare state would end up serving the public and essential social goals far better at just a fraction of the costs of the current, outdated, 19th-century constructs. That is why such reforms can be and have been politically quite popular. This represents the true new thinking and political opportunity for conservatives and Republicans. Indeed, pursuing such reforms comprehensively can drive government spending well below current levels as a percentage of GDP. Among the places this true new thinking can be found is my study published by the Institute for Policy Innovation, "A New Vision for Entitlements" (www.ipi.org).

Such new thinking was the foundation for The Ryan Roadmap developed and introduced in legislative form by Rep. Paul Ryan (R-WI), ranking Republican on the House Budget Committee. Those comprehensive proposals were officially scored as balancing the entire federal budget over the long term with federal spending and taxes at 18.6% of GDP. That means no tax increases. Indeed, the plan incorporates much lower federal income tax rates for individuals of 10% on the first $100,000 and 25% after that, with a new rate for a completely overhauled business tax system of less than 10%. Pushing the reforms further would lead to phasing the payroll tax out completely over many years.

Finally, I and many others got into the policy and political battles many years ago because we wanted to fight for smaller government and more economic freedom. We are not interested in the better big government socialism now being peddled by Bartlett and Frum. Moreover, most of the conservative and Republican base is with us, not with them. The Democrats already have the liberals and the socialists. So there is no significant political base for the Bartlett/Frum socialist lite vision. At best, such watered-down leftism would leave Republicans in a permanent minority.

America's Conservatism

Even in the Age of Obama the Magnificent, wielding his Party Controlled Press, the American people are still telling pollsters (see Joshua Trevino, "And the Seeds of Renewal") they favor conservative values and policies, contrary to what we hear from Powell, Bartlett and Frum (sounds like a bad law firm, just a step above Dewey, Cheatham, and Howe).

In a March 30 Rasmussen poll, 81% of voters said it was important to keep Obama's promised middle class tax cuts in the budget, with 55% saying very important. By 51% to 38%, voters said these tax cuts were more important than spending more on health care reform. By 50% to 42%, voters favored the tax cuts over more spending on Obama's energy initiatives. By 48% to 45%, voters favored the tax cuts even over more spending on education, even without knowing about our education overspending.

In a March 5th Wall Street Journal/NBC News poll, a slight majority of Americans said they are not "willing to pay higher taxes so that everyone can have health insurance," a huge decline from the 66% who were so willing in the early 1990s. A March 18-19 Rasmussen poll found that given a choice between "a more active government with more services and higher taxes or a smaller government with fewer services and lower taxes," 66% of Americans chose the latter. In an April 21 Rasmussen poll, 60% of Americans "say the federal government has too much power and too much money.

Colin Powell, call your office!

Rasmussen found on February 26 that 59% of U.S. voters agree with Ronald Reagan's statement that "government is not the solution to our problem, government is the problem." An April 20 Gallup poll found 55% of Americans "view big government as the biggest threat to this country." A January 30 Rasmussen poll found 56% of Americans believe that to be successful "the Republican Party should return to the views and values of the iconic 40th President of the United Sates Ronald Reagan."

Rasmussen polls have also found 55% opposed to the Obama stimulus bill and 54% favoring no further bailouts of auto companies, the financial industry, or financially troubled homeowners. On April 27, a Rasmussen poll found that a plurality (44%) of Americans oppose "a government-run health insurance plan," and that a plurality of almost half (49%) "still believes a private health insurance is likely to provide better service and more choice."

In addition, a plurality of 44% support a flat rate tax, 58% believe that abortion is morally wrong most of the time, 52% "think it is too easy to get an abortion in America," 58% say "the United States needs to build more nuclear plants," and a plurality of 48% think global warming is due to "long term planetary trends" rather than man made causes.

Reagan to Powell: Go Your Own Way

Ronald Reagan's famous 1975 CPAC speech came when Republicans were down even worse than today. He began, "Since our last meeting we have been through a disastrous election [1974]. It is easy for us to be discouraged, as pundits hail that election as a repudiation of our philosophy…." But, he continued:

I am impatient with those Republicans who after the last election rushed into print saying, "We must broaden the base of our party," when what they meant was to fuzz up and blur even more the differences between ourselves and our opponents.…When have we ever advocated a closed door policy? Who has ever been barred from participating?

Our people look for a cause to believe in. Is it a third party we need, or is it a new and revitalized second party, raising a banner of no pale pastels, but bold colors which make it unmistakably clear where we stand….Let us show that we stand for fiscal integrity and sound money and…an end to deficit spending, with ultimate retirement of our national debt. Let us also include a permanent limit on the percentage of the people's earnings government can take without their consent. Let our banner proclaim a genuine tax reform that will begin by simplifying the income tax so that workers can compute their obligation without having to employ legal help….Let our banner proclaim our belief in a free market as the greatest provider for the people.

Let us also call for an end to the…overregulation of business and industry….Let us explore ways to ward off socialism, not by increasing government's coercive power, but by increasing participation by the people in the ownership of our industrial machine….And we must make it plain to international adversaries that our love of peace stops short of "peace at any price." We will maintain whatever level of strength is necessary to preserve our way of life.

A political party cannot be all things to all people. It must represent certain fundamental beliefs which must not be compromised to political expediency. I do not believe I have proposed anything that is contrary to what has been considered Republican principle. It is at the same time the very basis of conservatism. It is time to reassert that principle and raise it to full view. And if there are those who cannot subscribe to these principles, then let them go their way.


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About the Author
Peter Ferrara is Director of Entitlement and Budget Policy at the Heartland Institute, General Counsel of the American Civil Rights Union, Senior Fellow at the National Center for Policy Analysis, and Senior Policy Advisor on Entitlements and Budget Policy at the National Tax Limitation Foundation. He served in the White House Office of Policy Development under President Reagan, and as Associate Deputy Attorney General of the United States under President George H.W. Bush.