Columns » Ernest Dumas

Bad is good for the GOP.


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The United States and the president share a terrible predicament. Counting those who have given up, 26 million people are out of work, everyone else is scared stiff, the government is out of money and the reigning political party thinks all of that is to its advantage.

That is the Republican Party, which now has 41 percent of the votes in the Senate and is determined to use them to stop the government from doing anything that might relieve the conditions.

Isn't that, you say, a little harsh? Consider the party's handiwork the past two weeks. With a Massachusetts Senate seat in hand, the Republicans killed the last chance for health insurance reform, two bills that were close facsimiles of the Republican insurance bill of 1974 that the Democrats stymied that year and of the successful Republican Massachusetts plan of 2006. The health bills would have trimmed the budget deficit, improved employment conditions and insured tens of millions who go without medical attention.

Then every Republican in the Senate voted to repudiate the nation's debt. That would have been the effect of not raising the debt ceiling, which Republicans voted to do regularly when the Bushes and Ronald Reagan were president but now oppose to show they are against the deficit spending their own votes had created. If the government didn't raise the debt ceiling, it would have to shut down or else default on its debt, as Arkansas did 125 years ago to its everlasting sorrow. Either way, it would have made the Great Depression look like a picnic, which is why the senators did not invoke their power over cloture and let it go with just a cynical vote.

The party said the president should be concentrating on creating jobs rather than messing around with the broken health-care system, but when President Obama met with Republican members of the House in that remarkable conference last week at Baltimore they let him know that his jobs program, which included targeted business tax cuts that Republicans advocated not long ago, was not acceptable to them. Republicans have moved on. They will settle now for nothing less than across-the-board tax cuts that include healthy cuts for the richest Americans, who already enjoy the lowest income taxes since 1928 (the top marginal rate was slightly lower at the end of the 1980s, but the effective tax liability is lower now). Such a tax cut would do nothing or precious little for jobs but raise deficits to unsustainable levels.

But who cares about that when propaganda points can be scored? If you need a primer on the political minefield that is Washington you can do no better than watch Obama's convivial banter with the House Republicans. The leaders called on selected congressmen for questions and they delivered carefully scripted and largely fictional talking points. One cheerful Republican said Obama's budget deficits each month were greater than Republican deficits ever reached in a year. (President Bush's programmed deficit the last year was $1.3 trillion, a little less than the deficit forecast for this year.) Another complained that Obama wouldn't look at a Republican health bill that would guarantee good medical insurance for every single American and would not have cost one penny! Get real, guys, the president said. I've read your bill.

But the jobs problem is scary and it is at least encouraging that the Republicans acknowledged that the government needed to play a role. The Republicans have the same old remedy, which is as illogical now as it always was. Lower the taxes on business and investors and they will create jobs. Bush cut them to the lowest in 75 years and you can see how many jobs that produced.

Businesses hire people when there is sufficient demand for their products and services that they can foresee a profit if they hire people to produce the goods and services. Even the $5,000 credit against income taxes for each hire that Obama proposes won't do it if no profit is in sight. The president's people know that but they embrace the theory that if managers see growth looming ahead the tax credit might get them to start hiring a little quicker. Maybe. Jimmy Carter tried it after the country was climbing out of a mild recession and claimed that it sped up hiring. He couldn't prove it.
The government role that does succeed, that has always succeeded, is stimulus. The Republicans razzed Obama that John F. Kennedy had cut taxes across the board so why wouldn't he. Kennedy's spending program propelled the country out of the recession; the tax cut was enacted after his death and when the economy was growing at a fast clip.

Republicans everywhere, including here, are running against the president's stimulus program. They say it didn't produce jobs and it caused the big deficit. Although the recession and job losses have not been as severe in Arkansas as in the seaboard and sunshine states, we have good reason to be grateful for the American Recovery and Reinvestment Act for things would be much worse without it. And part of the reason things are as bad as they are is the Republican agenda of the past decade.

You will remember that President Bush and the ruling majority (using the budget reconciliation process to avoid a filibuster) stole from $50 million to $120 million a year from the Arkansas treasury to cover some of the federal deficit they created by two rounds of tax cuts in 2001 and 2003. They confiscated the state's share of estate taxes, which amounted to $120 million in 2003, before it began to be phased out. That act and the loss of corporate state tax receipts that followed adoption of the federal corporate tax changes in 2005 and 2007 are one reason that Arkansas and nearly every state are slashing budgets and abolishing jobs. The federal stimulus has relieved some of the pain. The Republicans are united that there will be no more of the antidote.


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