Beware the Fiscal Conservative - The American Spectator | USA News and Politics
Beware the Fiscal Conservative

Howard Dean routinely calls himself a fiscal conservative. The peculiarity of this was best encapsulated in an October Fox & Friends interview where Dean said that he believes in “a balanced budget and fiscal conservatism and then a social progressive program like health insurance for every American.”

If he favors the vast expansion of federal spending (in the form a health insurance entitlement), along with an across-the-board tax hike (or “repealing the Bush tax cut,” as the euphemism goes), how can Dean describe himself as a fiscal conservative?

It isn’t that Dean is lying. To see why, it’s necessary to unpack the meaning of “fiscal conservatism”– or more precisely, its meanings.

Let’s rewind to 1994. Newt Gingrich, and anyone who signed on to the agenda upon which his majority ascended, had something for every fiscal conservative in the Contract with America.

For Tax Cutters, the Contract promised a reform that would “require a three-fifths majority vote to pass a tax increase” and a bill that would include a cut in the tax on capital gains (which came to pass) as well as “indexation” of that tax to inflation (which didn’t), among other tax reforms.

For Leviathan Wranglers — those who place a premium on curbing the growth of government — the Contract promised things like “a comprehensive audit of Congress for waste, fraud or abuse,” cutting the number of House committees and the size of committee staffs, welfare reform, and a line item veto.

For Accountants, those who seek to shrink or eliminate budget deficits, the Contract proposed a balanced budget amendment. (The proposed amendment included a tax-limitation component for Cutters and Wranglers.)

To be a fiscal conservative, you can be any of those things — a Cutter, a Wrangler, or an Accountant — but you needn’t be all three.

Practically all Wranglers are Cutters; rock-ribbed Wranglers who are also Accountants rarely worry about the revenue side of the budget when they can see so much spending they’d like to cut. But only some Wranglers are Accountants. Milton Friedman, a classic Wrangler-Cutter, is essentially an anti-Accountant: Friedman has, in his own words, never met a tax cut he didn’t like, precisely because he estimates that budget deficits rein in the growth of government by political necessity. “What is predetermined is not spending but the politically tolerable deficit,” Friedman has written. “Raise taxes by enough to eliminate the existing deficit and spending will go up to restore the tolerable deficit.”

Cutters needn’t be Wranglers or Accountants; President Bush has pushed multiple rounds of tax cuts, and reports in June had it that his administration plans a tax reform bill for each year he’s in office. But in the first three years of his presidency (fiscal years 2002-2004), non-defense discretionary spending will have grown, in real terms, by an astronomical 18%. By comparison, non-defense discretionary spending grew, in real terms, by 11.6% in the first three years of George H.W. Bush’s term and by 8.2% in the comparable period of Clinton’s second term; it shrunk in real terms by 13.2% in the first three years of Reagan’s first and second terms and Clinton’s first term, it shrunk in real terms by 13.2%, 3.2%, and 0.7%, respectively.

The area where Cutters and Accountants overlap is somewhat murkier. It might encompass supply-siders who seek to balance the budget through growth — though unlike classic Accountants, such supply-siders are rarely troubled by deficits in the current fiscal year; rather, they dispute long-term static analysis deficit projections, preferring dynamic analysis that takes accelerated growth into account. Or it might include numerous reluctant Cutters, who profess to be anti-tax if only the cuts are “affordable” (based, typically, on static analysis); self-styled moderates in both parties often take this position in close budget battles.

Which brings us to pure Accountants, and thus back to Howard Dean. “If Dean were ever elected president, I’m convinced he would be monomaniacal about balancing the budget — though certainly not in ways that would please conservatives,” wrote Stephen Moore in a useful Weekly Standard profile. The budget-balancing wing of the Democratic Party hit its stride in the ’90s — during Dean’s tenure as Governor of Vermont — when Clinton treasury secretary Robert Rubin pushed his debt-oriented ideas on economic stimulus. Rubin’s colleague and successor, Lawrence Summers, went so far as to say that reducing national debt would be “like a tax cut” because of its effect on interest rates (an effect that the Clintonites tended to overstate), and to credit the Clinton tax increase with cleaning up the balance sheet. For pure Accountants, then, raising taxes can represent the height of prudence. This is the kind of “fiscal conservative” that Howard Dean is.

So here we are: A fiscal conservative may be untroubled by budget deficits or obsessed with them; may want to raise spending or rein it in; and may want to raise taxes or cut them. “Fiscal conservative” now means so many things that it means nothing for certain. It’s a dream label for a politician: obscuring more than it reveals, it says to the vast majority of the electorate: Whatever you think, I agree.

“Fiscal conservative” ought to, for that reason, be retired from our vocabulary. For the same reason, it won’t be.

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