Flashback

The Perfect Storm

By From the February 2006 issue

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THE FALL OF 2005 WAS A PERFECT STORM of troubles for the Bush administration and the Republican Congress: overspending, public tiring of the Iraq War, Katrina, Harriet Miers, the indictment of Tom DeLay, the Abramoff scandal, the Valerie Plame affair and its possible threat to Karl Rove, skyrocketing gas prices, and collapsing approval ratings for President Bush and the Republican Congress.

Bush's personal approval rating fell from 50 percent the day he was re-elected in 2004 to 39 percent in November 2005. The public sense of right track/wrong track moved from 44/51 in January 2005 to 33/64 by early December 2005. October 25 saw the  2,000th American death in Iraq, and fully 60 percent of Americans said they no longer thought the war was  worth it. Americans felt the Democrats would do better than the Republicans on Iraq by 6 points, on the economy by 12 points, and even on taxes by 8 points.

Elated Democratic pundits said this was the beginning of the end of Republican control of Washington. Republicans replied, limply, that the good news was that all this bad news was cresting fully one year away from the 2006 November elections. But had Republican problems reached a height from which they would recede? Or had the troubles just begun?

Republicans were buffeted by so many problems that any attempt at diagnosis (or autopsy) requires one to disaggregate the challenges and examine them one by one. Are these simply temporary troubles that will leave no permanent scars? Are they serious problems that must be addressed but can be corrected in time for the next election? Or are they potentially fatal wounds that no one, at least no one in charge around here, could heal in time?

THE BEST NEWS FROM LAST FALL is that we are dealing with a patient, not a corpse. The off-year elections of November 8, while a disappointment, were not a rout of 1974 or 1994 proportions. Two states--blue New Jersey and red Virginia--elected governors and state legislators. Both already had Democrat governors and they elected Democrat governors. No net change. Republicans lost two assembly seats in New Jersey and two House of Delegates seats in Virginia. In New Jersey the Democrats maintained control of both houses. (Historical aside: when Christie Todd Whitman was elected governor in 1993 the Republicans had two-thirds majorities in the assembly and state senate. After eight years of Rockefeller Republicanism, the Democrats won back the governorship and had majorities in both houses.) In Virginia, the Republicans picked up the lieutenant governorship, held the attorney general's job, and retained control of both the state senate and House of Delegates.

Democrats argued that Republicans lost the Virginia and New Jersey governor's races because of Bush's 39 percent approval ratings and they cheerfully extrapolated forward to a Republican collapse in November 2006. This would be a stronger argument if Democrats in November 2005 hadn't been contesting governorships that they won four years earlier when Bush's approval was at 89 percent.

There were real lessons to be learned from both gubernatorial races. In Virginia, Republican nominee Kilgore refused to sign the Taxpayer Protection Pledge against higher taxes or to campaign against Governor Mark Warner's $1.6 billion dollar tax increase because he didn't want to upset Republicans in the Virginia legislature who had collaborated in the tax hike. Republicans who abandon the tax issue are laying down the sword and shield of Reaganism. It's also instructive that Kilgore wasted money on ads attacking his opponent for being against the death penalty--an issue that cut well in past Virginia elections when crime was higher. Kilgore also highlighted his opposition to illegal immigrants who get up at 6 A.M. and wait by the side of the highway looking for day work. He might report back to President Pat Buchanan whether this issue remains a majority builder. In New Jersey, Republican candidate Forrester ran pro-life in the primary and pro-choice in the general election. It didn't work. Pro-lifers felt betrayed while Forrester's new pro-choice friends stuck with the consistently pro-abortion Democrat.

IF REPUBLICANS DODGED A BULLET in the off-year elections, the troubles of 2005 could yet snowball to disaster proportions in 2006. The spending issue remains front and center. During four years of nominal Republican control of the House, Senate, and Presidency, federal spending has increased on average by 7.3 percent each year. This is more than twice the 3.5 percent rate of growth in the years when President Clinton faced off against a Republican Congress. Republican apologists insist the greater spending under Bush has been driven by defense and homeland security needs. Not so. Non-defense and non-homeland security spending rose by 4.8 percent per year (inflation adjusted) under Bush, and purely discretionary spending jumped 10.3 percent a year under Bush vs. 7.5 percent under Clinton. On the day Bill Clinton left office the federal government spent 19 percent of Gross Domestic Product (GDP). At the close of fiscal year 2005, the federal government was spending 20.3 percent of GDP. By any measure, government spending has worsened under Republican rule.

Hurricane Katrina brought the matter to a head. When Bush bragged he would throw $200 billion at rebuilding efforts, Republican back-benchers demanded that some of the new spending be offset by cuts in other federal spending--a discipline that the Republican Congress insisted on during the Clinton years. Majority Leader Tom DeLay told the rebels to go away and infamously declared an "ongoing victory" in the fight for spending reductions, saying there was no more fat left in the budget to cut. (Many Republicans assumed on hearing of DeLay's indictment that it was in response to that obscene remark.) That was the low point. A moment of clarity. Hitting bottom. The Republican leadership began to concede, "We have a drinking problem." The intervention of conservative House members led by Mike Pence and Jeff Flake sobered up the House leadership. Hastert and DeLay were also old enough to remember what happened when an earlier Republican leader, Bob Michel, ignored the cries for reform from Newt Gingrich and the Conservative Opportunity Society's young Turks.

In the healthiest sign from last fall, the House leadership brought the back benchers into the fold and they worked together to increase the promised savings of $35 billion in the reconciliation bill to $50 billion over five years. This is a baby step towards spending restraint in a federal budget spending $2.6 trillion in 2006, but it's the first move in the right direction in five long years. And the young Turks invited into the effort learned how truly difficult it is to pare back a budget while winning enough votes of northeastern Republicans in the House and Senate to actually pass legislation.

A Republican Congress ten years in power that can self-diagnose, admit error, and change direction by moving to rein in spending is flexible enough to survive future challenges.

THE WHITE HOUSE DEMONSTRATED that it can both make mistakes--Big Time--and self-correct when it nominated Harriet Miers to the Supreme Court. It is hard to overstate the shock this nomination caused conservatives. Many of them had set aside other concerns in 2004 to say, "Forget the war, forget the overspending--everything hangs on the Supreme Court and we know that Bush will give us great judges." This was to be a no-brainer. There were about a dozen possible conservative Justices who had been vetted since the Reagan years. Everyone agreed that these were perfect, Bo Derek "10s." After nominating one of them, the President would not have to say, "Trust me." Yet that's just what happened when the President nominated Anne of Cleves, showed us a fuzzy portrait, and said, "Trust me, she's gorgeous."

The very choice of Miers suggested that something was seriously wrong at the heart of this White House. Did the President or his advisers see themselves as so badly damaged last fall that they could not challenge the Democrats on an issue that united all conservatives? Were Karl Rove and the vice president's shop so distracted by the Valerie Plame leak investigation that there was no adult supervision at 1600 Pennsylvania Avenue? Was the White House so cut off from Congress and the outside world that it could not see how problematic this pick was? Or was the problem hubris? Caesar wishes this. You should be pleased that it pleases Caesar.

But Miers was not Iraq. Bush cut and ran. By accepting her withdrawal, he admitted his error and quickly went forward to nominate a Bo Derek 10--Samuel Alito. The Miers nomination proved telling in the sense that "that which does not kill me makes me stronger." The nomination was not a betrayal--like the senior Bush's in 1990 on taxes, never to be forgiven or forgotten. It was a disappointment. A mistake. Quickly reversed. There are no visible ripples in the water. Miers sank without a trace. No permanent damage to the coalition. And a President learned that loyalty flows two ways.

If there was a low point last fall, it came when badly shaken Republicans, led by committee chairmen, embraced a windfall profits tax. In healthier times, it would have been laughed off, for good reason. Gasoline prices that started the year at $1.78 and rose to $3.07 by Labor Day are already receding with average prices at $2.20 at the beginning of 2006--but not before Republicans in both the House and Senate broke and ran before the specter of populist nonsense. Behaving like Jimmy Carter before he began putting up houses, they joined in a public stoning of Big Oil executives. The hard-won knowledge learned over centuries that prices flow in a free market from changes in demand and supply was forgotten in a trice by Republicans with political fear in their eyes. We all watched as Republican leaders descended into an adult version of Lord of the Flies. How well the nice folks in the pharmaceutical industry must sleep.

THE ABRAMOFF SCANDAL spread out over 2005, giving the Democrats great hope that they could enmesh two to six Republican congressmen who received campaign contributions or trips from Jack Abramoff's clients. Tom DeLay was attacked for having accepted a trip to Scotland that was indirectly secretly funded by an Abramoff client. An overlapping danger flowed from Ronnie Earle, the liberal Democratic prosecutor in Austin, Texas, in charge of all political corruption cases in Texas, who charged DeLay with violating campaign finance laws. The case was so weak that Earle had to convene three grand juries to get his indictments. One of the charges has already been thrown out. Earle played this game against Senator Kay Bailey Hutchison in 1994 and was soundly rebuked for his political indictment without merit. Still, if he delays a trial long enough he can disrupt the Republican leadership and damage Tom DeLay with or without justification.

Democrats' hopes that they could run against Republican corruption were born of their failure to compete with Republicans on policy. How seriously could the party of Chicago, Louisiana, and New Jersey run as the reform party? Worse, after Senator Dorgan of North Dakota stood next to John McCain at the Indian Affairs committee hearings denouncing those who had been supported by Abramoff's clients as corrupt, it was revealed that Dorgan had reaped $67,000 from the same sources and used his official capacity to benefit those contributors at roughly the same time as the cash rolled in. All of a sudden Savonarola began to look like Reverend Arthur Dimmesdale in The Scarlet Letter. It turns out that 42 percent of Abramoff-related political contributions flowed to Democrats. This writer is a friend of Jack Abramoff's from College Republican days and is appalled at how much money he threw at Democrats. Appalled. But on reflection, relieved.

Democratic desires to behead the Bush administration were disappointed when the special prosecutor indicted "Scooter" Libby of the vice president's staff and not Karl Rove.

Some have pointed to the difficulty Republicans had in passing their reconciliation bills on taxes and spending last fall as the cost of not having Tom "The Hammer" DeLay at the helm. It takes nothing away from DeLay's talent to point out that more noteworthy in late 2005 was minority leader Nancy Pelosi's success in uniting Democrats to vote against any and all Republican priorities in an effort to make the House of Representatives ungovernable. Democrats could then run in 2006 against a "do nothing" Congress that couldn't even get budgets passed. This strategy surfaced last July in the vote on the CAFTA trade agreement. Republicans historically could count on 45 pro-trade Democrats to make up for Southern textile trade-skeptic Republicans. This time CAFTA won only 15 Democrat votes, and to eke out a 217 to 215 win several Republicans had to make principled votes that will cost them support in their districts. In the past, 40 to 60 Democrats would support the budget reconciliation bills. This time no more than nine did.

Still, Pelosi's successes have been limited. Republicans in 2005 won class action tort reform with 50 Democrat votes, and bankruptcy reform with 73 Democrats. Protecting the gun industry from abusive tort cases won 59 Democrats in the House (and 13 in the Senate to guarantee beating a filibuster). While Democrats delight in having Republicans from "moderate" districts forced to cast potentially "difficult" votes, they forget that there are 40 Democratic congressmen in districts that voted for Bush and only 18 Republicans in districts that voted for Kerry. Pelosi's poodles are endangered by party-line discipline as much as northeastern Republicans--and there are twice as many of them. 

SO OVER-CONFIDENT were Democrats last October and November that they threw away a winning hand on Iraq. All spring and summer Democrats had simply shut up. Voters concerned about Iraq could be mad at Bush without anyone demanding: "...and how would the Democrats be different?" But the Democrats couldn't leave well enough alone. Their party, whose perceived weakness on national security has been a drag on presidential tickets since Vietnam, proved cocky enough in the fall of 2005 to call for an immediate pullout from Iraq. Sensing the Democrats had overreached, the House leadership promptly forced a vote on Rep. John Murtha's call for U.S. withdrawal from Iraq. The Democrats not only voted against withdrawal but were drawn into a debate on what their policy was on Iraq. Twelve days after voting against withdrawal Democrat leader Pelosi announced that she was for withdrawal. Democrat party chair Howard Dean said the war was unwinnable. Pelosi proclaimed proudly on December 15 that there was no Democrat position on Iraq. Then the election in Iraq went off with little violence and strong participation by Iraqi voters, including the Sunnis who had largely boycotted earlier votes.

Within a week of the Iraq vote Bush's approval rating in the Washington Post/ABC News poll was back to 47 percent. Throughout 2006 there will be a phased withdrawal from the 160,000 troops in Iraq--20,000 of which were brought in for the election--and the American people will have their sense of progress validated by reports that "today the President announced another 3,000 Americans will be heading home."

IF UNCERTAINTY ABOUT IRAQ has been a boat anchor weighing down Bush's popularity, the growth of the economy has been a silent strength. Since the 2003 tax cut which lowered the capital gains tax rate from 20 to 15 percent and the top rate on dividend payments from 38.6 to 15 percent, the American economy has created 4.46 million jobs, shareholder wealth has increased by $4.7 trillion, and total wealth including household net worth has increased by $11 trillion.

In the year of Katrina, Rita, and Wilma, high gas prices and continued war in Iraq, the American economy created 2 million jobs, grew nearly 4 percent, and economists predict the U.S. economy will grow 4 percent in 2006 with unemployment falling from its present low rate of 5 percent. By contrast, France's and Germany's unemployment rates are roughly double at 10 percent. 

The year 2005 presented the Republican majority with huge challenges. Untreated, any one of the wounds that became so visible last fall could have proved fatal. Congress must now show that its commitment to fiscal sobriety is permanent. Democratic attacks on a culture of corruption give Republicans an opportunity not simply to point out the bipartisan nature of the problem but to pass real reforms that limit or abolish "earmarks" that breed corruption. The President has shown the wisdom to stand his ground on Iraq and the judgment to change course on Harriet Miers. Wise investments in tax cuts are paying off in time to be felt in the 2006 and 2008 election. The ride has been bumpy, but that just might be because we were turning a corner. 

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