More Budget Baloney From a Leading Political Party

Republican Congressman Paul Ryan, chairman of the House Budget Committee, issued his proposed federal budget yesterday. The Republican majority on the Budget Committee is expected to approve it. Fortunately, even if the full House of Representatives approves it, the Senate won’t.

Nevertheless, Ryan’s budget is worth knowing about. It will influence the budget Congress eventually agrees on and it offers yet another clear statement of the Republican Party’s insane priorities. 

In brief, the Ryan budget calls for a big tax cut on high incomes, a lot more spending on the military, and a lot less spending on programs like Medicare and food stamps. In addition, Ryan would repeal the Affordable Care Act, even though there are now some 10 million people who have health insurance because of that law (via private insurance or Medicaid).

Ryan claims his budget will eliminate the federal deficit in ten years, despite the tax cuts and increased military spending, because he makes stuff up.

One part of the Republican budget document deals with Social Security. I plan to write more about that in a future post, but for now, consider this amazing sentence from page 66: 

Any value in the balances in the Social Security Trust Fund is derived from dubious government accounting. 

The Treasury Department says the government bonds in the Social Security Trust Fund were worth almost three trillion (not billion, but trillion) dollars at the end of December and were paying the Trust Fund an average interest rate of 3.6%. But, according to the authors of the Republican budget document, those bonds are basically worthless. They’re an accounting fiction. Such is the financial insight demonstrated by Congressman Ryan and his Republican colleagues as they go about planning our economic future. 

The New Deal and the Same Old Deal

For those of us under 80 or so, the New Deal was basically President Franklin Roosevelt using the federal government in creative ways to address the Great Depression, which wasn’t fully tamed until World War II began, government spending rose even further and lots of working-age men joined the armed forces (there were 450,000 Americans in the military in 1940 and 12.5 million in 1945).

A recent book, Fear Itself: The New Deal and the Origins of Our Time, tells the story but leaves Roosevelt in the background. The New York Review of Books has a fairly long but excellent review by Nicholas Lemann, a professor of journalism at Columbia University, here. 

The author of Fear Itself is Ira Katznelson, a professor of political science and history, also at Columbia. According to the review, Katznelson considers the national legislature to be the most central political institution in a democracy. For that reason, he presents an account of the New Deal and its aftermath that pays little attention to Presidents Roosevelt and Truman:

Katznelson has no interest in their personal qualities or their methods of leadership. Instead his focus is on Congress and government agencies, and more broadly on political systems, voting, and interest groups. This gives Fear Itself the feeling of a fresh look at a familiar story.

In addition, Katznelson emphasizes the perilous situation the country faced in the 1930s. Germany and Italy had reacted to the Great Depression by turning to fascism. The diplomat George Kennan believed America’s government should become authoritarian. The respected journalist Walter Lippmann told President Roosevelt that he might have to become a dictator. New Deal policies were enacted in “an atmosphere of unremitting uncertainty about liberal democracy’s capacity and fate”.

Becase Katznelson focuses on Congress, the South has a major role in the story he tells. Since the Civil War, the South had been firmly Democratic. In the 1932 election, Democratic congressional candidates received 86% of the vote in the South. After that election, more than half of the committee chairmen were southern Democrats. As a result, Roosevelt needed southern support in order to get anything through Congress:

The South used its power to create de facto regional exceptions to many New Deal policies, either by exempting domestic and agricultural workers (meaning blacks) from them, or by placing administrative and policy control of them in the hands of state governments. To use the most obvious example, the 1935 law that created the Social Security system had both of these features...

It was specifically the South that blocked … the possibility of the New Deal’s moving further left in its policies. The New Deal wound up largely achieving one set of goals—an American welfare state, including retirement security and an empowered labor movement—but stopped far short of another, which would have involved creating, through democratic procedures, a more centrally planned economy….

It was Congress that blocked national planning, for reasons having to do with the southern bloc’s overriding concern with maintaining the regional racial order. The South, in Katznelson’s view, was willing to move left on economic issues as long as that didn’t threaten segregation. When economic policy and race began to seem intertwined, the South opted out on economic policy, and that defined the leftward boundary of the New Deal.

Reading this should remind us how little has changed since then. Much of our politics is the same old deal it’s always been. Since the compromise that resulted in slaves being counted as 3/5ths of a person in the Constitution, America has been politically divided between the North (now including western states like California) and the South (now including northern states like Idaho and Wyoming). 

Of course, after the passage of the Civil Rights Act in 1964 and the Voting Rights Act in 1965, the South switched to voting Republican. But progressive federal policies are still being watered down in order to accommodate southern sensibilities. For example, the Affordable Care Act allowed individual states, especially in the South, to avoid expanding Medicaid, thereby limiting benefits to poor people and low-paid workers (including, of course, poor and low-paid blacks).

Professor Lehmann, the author of the review, highlights other ways in which southern “conservatives” have affected federal policy since the New Deal: by supporting our entry into World War II (Southern politicians tend to favor the military and military activity); by encouraging the creation of our national security state (internment of the Japanese, loyalty oaths, FBI surveillance, the creation of the CIA and the House Un-American Activities Committee); by voting for a “defense” budget that has continued to grow even in peacetime; and by making life difficult for labor unions and people who want to vote.

For example, given the Republicans’ recent attacks on voting rights, this passage from the review is especially striking:  

Katznelson also reminds us that whites as well as blacks were substantially disenfranchised in the South, because of poll taxes. Voter turnout was shockingly low in the South—below 20 percent of eligible (meaning mainly white) voters, for example, in Georgia, Mississippi, Alabama, and South Carolina in the crucial presidential election of 1940. In the 1938 midterm elections, Mississippi, with a population of more than two million, had only 35,000 voters. 

There are few activities more troubling in a democracy than intentionally limiting the size of the electorate, although that’s now standard Republican policy, especially in the South.

Professor Lehmann thinks that the South described by Professor Katznelson is too homogeneous. Lehmann argues that there have been significant differences between Southern politicians regarding civil rights and economic issues. Nevertheless, if you want to understand where America is today, Lehmann’s review of Katznelson’s book is terrific reading. So, probably, is the book. 

(A personal note: when I was in college, I read something by a black author who claimed that the status of black people has been the central issue in the history of our country. Unfortunately, I haven’t been able to find the quotation or even identify the author. But I remember reading that statement some 40 years ago and being highly skeptical. The more I learn about American history, however, the more I’ve come to agree.)

Two Pieces of Good News from Washington

Speaker of the House John Boehner allowed a straightforward “clean vote” on raising the debt ceiling instead of holding the world economy hostage again. Many right-wingers are outraged. Maybe one day Congress will get rid of the debt ceiling altogether, since raising it merely allows the government to borrow money to pay bills Congress has already approved.

Secondly, Janet Yellen testified before Congress for the first time in her new role as chairman of the Federal Reserve. It’s hard to understand why President Obama initially seems to have preferred someone else for the job. There is a nice, clear summary of her testimony from John Cassidy at the New Yorker. This is his conclusion (calling her “dovish” means she’s not an “inflation hawk”, i.e. fighting inflation isn’t her one big priority):

She’s a historic figure. I am not just referring to her gender. I’m talking about her approach to policy making, and the emphasis she puts on creating jobs and reducing unemployment. “Since the financial crisis and the depths of the recession, substantial progress has been made in restoring the economy to health and in strengthening the financial system,” she said toward the end of her prepared remarks. “Still, there is more to do. Too many Americans remain unemployed, inflation remains below our longer-run objective, and the work of making the financial system more robust has not yet been completed.”

It’s been a long time since we’ve had a Fed chief come to office declaring that unemployment is too high, inflation is too low, and that we need to keep those Wall Street bounders in check. (Bernanke ended up saying some of these things, but he didn’t start out saying them.) In a post last year, I suggested that Yellen could be the most dovish Fed boss since … the Great Depression, and I noted that, “if Yellen does take over from Bernanke next February, there’s no reason to doubt that concern for the unemployed will remain her leitmotif.” Nothing she said today was inconsistent with that description.

Score 1 for United Government

Something I wrote a few days ago has piqued the interest of a supporter of “divided” government (see We Should Expect Divided Government for a Long Time and associated comments below).

Coincidentally, I just read about President Lincoln addressing Congress after the attack on Fort Sumter. Lincoln had raised a volunteer army to defend the Union, but without Congressional approval, since Congress was out of session and not due back for months. He summoned Congress back for a summer session and made his case (I’m quoting from The Man Who Saved the Union by H. W. Brands):

“These measures, whether strictly legal or not, were ventured upon under what appeared to be a popular demand and a public necessity, trusting then as now that Congress would readily ratify them” He requested authority to expand the army to 400,000 men at a cost of 400 million dollars. “A right result, at this time, will be worth more to the world than ten times the men and ten times the money…”

“This issue embraces more than the fate of these United States. It presents to the whole family of man the question whether a constitutional republic, or a democracy – a government of the people, by the same people – can, or cannot maintain its territorial integrity against its domestic foes… Must a government, of necessity, be too strong for the liberties of its own people, or too weak to maintain its own existence?… It is now for them to demonstrate to the world that those who can fairly carry any election can also suppress a rebellion.”

Since the Democratic Party’s Southern wing had disappeared (i.e. joined the Confederacy) and its Northern wing had lost its leader (Stephen Douglas had recently died of typhoid fever), the Republicans now had a large majority in both houses. Congress immediately ratified Lincoln’s previous actions and approved his request for more men and money. In fact, they voted for 500,000 men and 500 million dollars, more than Lincoln asked for.

We Should Expect Divided Government For a Long Time

Back in July, I wrote about the unrepresentative nature of the House of Representatives:

The House doesn’t represent the will of the people, because small states are over-represented (some congressional districts are nearly twice as large as others) and recent gerrymandering results in more Republicans being elected than Democrats, even though Democrats get more votes.

What I should have said is that some small states are over-represented and others are under-represented. For example, Rhode Island’s two members of Congress each represent only 525,000 people. Wyoming’s single member represents about 580,000. Yet Delaware‘s one member of Congress represents 925,000 and Montana‘s represents more than one million.

That might be a wash in political terms, because some small states lean left and some lean right. Unfortunately, of the 12 states that have no more than two representatives in Congress, eight lean right and only 4 lean left.

In addition, we shouldn’t forget the District of Columbia, which has more people than Vermont and Wyoming, definitely leans left and isn’t properly represented in Congress at all (they don’t have a senator and their representative gets to talk but not vote). This all adds up to an advantage for the Republicans.

In that post, I also said that gerrymandering resulted in more Republicans being elected to the House in 2012 than Democrats, even though Democrats got more votes. I was right about the numbers: the Republicans received only 47.6% of the total House vote, but ended up with 51.7% of the seats, which resulted in the Republicans having almost total control of the House of Representatives, since the House is run more efficiently (i.e. less democratically) than the Senate.

It might be the case, however, that gerrymandering doesn’t explain the Republicans’ success. That’s not to say the Republicans haven’t done their best to draw Congressional district boundaries to their advantage. They clearly did so the last time they got the chance and did it with more dedication than the Democrats.

Nevertheless, a recent study suggests that the Republicans have a natural advantage in House races. The reason could be that Democrats have gerrymandered themselves by tending to live in big cities, college towns and old manufacturing centers. That’s how gerrymandering works. You try to clump together people who vote for your opponents in as few districts as possible. This creates a few extremely safe seats for your opponents (ideally, they’d get 100% of the vote in a few districts), and a bunch of relatively safe seats for your side. It’s basically voter segregation or ghettoization. By living close together in places like Atlanta, Ann Arbor and Toledo, Democratic voters appear to have put themselves at a natural geographical disadvantage in House races.

The people who did the study claim to have tried out thousands of different district boundaries in 49 states (no Alaska? no Rhode Island?). The results were not encouraging for Democrats or opponents of gerrymandering:

In the vast majority of states, our nonpartisan simulations produced Republican seat shares that were not much different from the actual numbers in the last election. This was true even in some states, like Indiana and Missouri, with heavy Republican influence over redistricting.

It might be possible to counteract this Republican advantage by creating lots of districts that radiate out from the centers of towns and cities and would include a nice mix of urban, suburban and rural voters. The authors of the study seem to discount this possibility. At any rate, their point is that by living in relatively close quarters, Democrats are at a natural disadvantage when it comes to electing members of the House of Representatives.

A reasonable conclusion to draw from all of this is that Congress is even less representative than it seems to be. The Senate was explicitly designed to favor the interests of lightly-populated states, which now tend to vote Republican, while the House exhibits some favoritism toward small states, but more importantly is gerrymandered, whether on purpose or by simple geography, to favor Republicans as well.

The good news is that Democratic presidential candidates may continue to do relatively well, since most people pay at least some attention to politics during presidential elections and most people agree with Democratic policies (progressive taxation, more social spending, less military spending). Democrats who run for President will do well, that is, until they actually have to govern. Then they’ll have to deal with too many Republicans in Congress.