June 15, 2023
Yesterday, the Republican Study Committee, a 175-member group of far-right House members, released their 2024 “Blueprint to Save America” budget plan. It calls for slashing the federal budget by raising the age at which retirees can start claiming Social Security benefits from 67 to 69, privatizing Medicare, and enacting dramatic tax cuts that will starve the federal government.
I’m actually not going to rehash the 122-page plan. Let’s take a look at the larger picture.
This budget dismisses the plans of “President Joe Biden and the left” as a “march toward socialism.” It says that “[t]he left’s calls to increase taxes to close the deficit would be…catastrophic for our nation.” Asserting that “the path to prosperity does not come from the Democrats’ approach of expanding government,” it claims that “[o]ver the past year and a half, the American people have seen that experiment fail firsthand.”
Instead, it says, “the key to growth, innovation, and flourishing communities” is “[i]ndividuals, free from the burdens of a burdensome government.”
Our history actually tells us how these two contrasting visions of the government play out.
Grover Norquist, one of the key architects of the Republican argument that the solution to societal ills is tax cuts, in 2010 described to Rebecca Elliott of the Harvard Crimson how he sees the role of government. “Government should enforce [the] rule of law,” he said. “It should enforce contracts, it should protect people bodily from being attacked by criminals. And when the government does those things, it is facilitating liberty. When it goes beyond those things, it becomes destructive to both human happiness and human liberty.”
Norquist vehemently opposed taxation, saying that “it’s not any of the government’s business who earns what, as long as they earn it legitimately,” and proposed cutting government spending down to 8% of gross national product, or GDP, the value of the final goods and services produced in the United States.
The last time the level of government spending was at that 8% of GDP was 1933, before the New Deal. In that year, after years of extraordinary corporate profits, the banking system had collapsed, the unemployment rate was nearly 25%, prices and productivity were plummeting, wages were cratering, factories had shut down, farmers were losing their land to foreclosure. Children worked in the fields and factories, elderly and disabled people ate from garbage cans, unregulated banks gambled away people’s money, business owners treated their workers as they wished. Within a year the Great Plains would be blowing away as extensive deep plowing had damaged the land, making it vulnerable to drought. Republican leaders insisted the primary solution to the crisis was individual enterprise and private charity.
When he accepted the Democratic nomination for president in July 1932, New York governor Franklin Delano Roosevelt vowed to steer between the radical extremes of fascism and communism to deliver a “New Deal” to the American people.
The so-called alphabet soup of the New Deal gave us the regulation of banks and businesses, protections for workers, an end to child labor in factories, repair of the damage to the Great Plains, new municipal buildings and roads and airports, rural electrification, investment in painters and writers, and Social Security for workers who were injured or unemployed. Government outlays as a percentage of GDP began to rise. World War II shot them off the charts, to more than 40% of GDP, as the United States helped the world fight fascism.
That number dropped again after the war, and in 1975, federal expenditures settled in at about 20% of GDP. Except for short-term spikes after financial crises (spending shot up to 24% after the 2008 crash, for example, and to 31% during the 2020 pandemic, a high from which it is still coming down), the spending-to-GDP ratio has remained at about that set point.
So why is there a growing debt?
Because tax revenues have plummeted. Tax cuts under the George W. Bush and Trump administrations are responsible for 57% of the increase in the ratio of the debt to the economy, 90% if you exclude the emergency expenditures of the pandemic. The United States is nowhere close to the average tax burden of the 38 other nations in the Organization of Economic Cooperation and Development (OECD), all of which are market-oriented democracies. And those cuts have gone primarily to the wealthy and corporations.
Republicans who backed those tax cuts now insist that the only way to deal with the growing debt is to get rid of the government that regulated business, provided a basic social safety net, promoted infrastructure, and eventually promoted civil rights, all elements that stabilized the nation after the older system gave us the Depression. Indeed, the Republican Study Committee calls for making the Trump tax cuts, scheduled to expire in 2025, permanent.
“There are two ways of viewing the government's duty in matters affecting economic and social life,” FDR said in his acceptance speech. “The first sees to it that a favored few are helped and hopes that some of their prosperity will leak through, sift through, to labor, to the farmer, to the small businessman.” The other “is based upon the simple moral principle: the welfare and the soundness of a nation depend first upon what the great mass of the people wish and need; and second, whether or not they are getting it.”
When the Republican Study Committee calls Biden’s policies—which have led to record employment, a booming economy, and a narrowing gap between rich and poor— “leftist,” they have lost the thread of our history. The system that restored the nation after 1933 and held the nation stable until 1981 is not socialism or radicalism; it is one of the strongest parts of our American tradition.