So it was fascinating for me to watch Stockman reemerge last Sunday on ABC’s “This Week” along side U.S. Rep. Mike Pence, a rising star who is predicted to be on an Indiana gubernatorial or 2012 presidential track.
What Stockman had to say – four days before President Obama’s bipartisan Deficit Commission headed by Republican Alan Simpson and Democrat Eskine Bowles issued its first preliminary report – was both needed and shocking.
“This is not 1981. This is not ‘morning again in America,’” Stockman said, who called Tuesday’s election “The big lie. We’re now becoming the banana republican of finance.”
“We’ve drifted now for 30 years. Both parties, unfortunately, became free-lunch parties — the Republicans cutting taxes every time they had a chance, never doing anything about spending, and the Democrats digging in to defend everything that was there. As a result, we now have this massive deficit.”
When pressed by anchor Christiane Amanpour, Stockman did what the Deficit Commission did – goring sacred cows. “We can’t be the policemen of the world anymore because we can’t afford it.” He took a dim view of extending the Bush tax cuts that would add $2 trillion to the federal budget deficit over the next decade if President Obama gets his way and keeps them for folks earning under $250,000, and $4 trillion if Pence and his Congressional Republicans get their way.
“Look, I don’t think higher taxes are going to get anybody hired. I don’t – I think raising taxes in the worst economy in 25 years is a profoundly bad idea,” Pence said, “Raising income tax rates on the top one percent will not increase revenues to the federal Treasury.”
Stockman disagreed. “Two years after the crisis on Wall Street, it has been announced that bonuses this year will be $144 billion, the highest in history. That’s who’s going to get this tax cut on the top, you know, two percent of the population. They don’t need a tax cut. They don’t deserve it. And, therefore, what we have to do is focus on Main Street, and that means getting our house in order fiscally, not tax cuts that we can’t afford.”
“We think we ought to go back to pre-stimulus, pre-bailout levels, and freeze there,” Pence said. “That will save $100 billion in the first year.”
Stockman wasn’t buying it. “Social Security needs to be means-tested right now, not for benefits in 2030, right now, for the top one-third of beneficiaries who have private income that they’ve earned over their lifetime. We need to drastically scale back Medicare.”
Asked if Pence’s proposals for deficit cutting were a good start, Stockman responded: “Well, no, not nearly enough. The point is, we’re now in real-world governance. And you don’t get 100 times at bat. The Republicans have been at bat for 30 years, and they’ve whiffed on everything.”
Stockman has been there and done that. In his book “The Triumph of Politics,” he describes the reality after Reagan had campaigned in 1980 to cut taxes, raise defense spending and balance the budget. “The bitter truth was that Ronald Reagan faced an excruciating test of presidential decision-making. After an exhausting and prolonged political struggle, he had emerged in July triumphant, having enacted a generous tax cut for all Americans,” Stockman writes.
“Only three months later he had to admit that the triumph had been an illusion when we couldn’t win support for spending cuts needed to balance the budget. Reagan had one real option: to retreat and give back part of the huge tax cut we couldn’t afford. But he wouldn’t. Ronald Reagan chose not to be a leader but a politician, and in doing so showed why passion and imperfection, not reason and doctrine, rule the world.”
Thus, here we are.
The Deficit Commission is trying to work its way through 30 years of political sin that ultimately gave birth to the Tea Party. They recommend raising the Social Security retirement age, cut Pentagon weapons systems and pare back almost every domestic spending program, revamp the tax system and raise the gas tax.
The squeals from Washington were immediate. “Absolutely unacceptable,” said lame duck Speaker Nancy Pelosi.
President Obama reacted by saying that we are all facing “hard choices.”
And Gov. Mitch Daniels – like Stockman, a former White House Budget Director – told the American Spectator, “Any fair reading of the nation’s balance sheet suggests we’re in a dangerous moment. If we don’t act soon, we don’t have a prayer. I think the American people are beginning to understand that we are spending money that we don’t have. The Tea Party has raised consciousness.”
“I’m prepared to set aside almost anything else,” Daniels said, calling for a “new compact for young people.” The responsibility to fixing these programs and restoring them to solvency, he says, is about to fall “on the party whose uniform I wear.”
This stinking mess may require a one-term president to fix things, politics be damned. If not this one, then the next.
(The columnist publishes at www.howeypolitics .com)