As we near the end of the first week of the Minnesota* government shutdown and talks on the national stage continue in a countdown to August 2, a trend—both local and national—is bubbling to the surface. While one party continues to give concession after concession, the other party clings to a single economic factor that is rarely, outside of the party, touted as the most important among a myriad of economic factors. Taxes. While Democrats have gone against the wishes of many of the party’s far-left constituents and agreed to cuts in the name of balancing budgets, the Republican party refuses to thwart the extremists among them to reach anything that might actually be called a compromise.
In a scathing article in the New York Times David Brooks takes on a Republican party that he sees as abnormal in its inability to seize an opportunity to “take advantage of this amazing moment” where “it is being offered the deal of the century: trillions of dollars in spending cuts in exchange for a few hundred billion dollars of revenue increases.”
He goes on:
But we can have no confidence that the Republicans will seize this opportunity. That’s because the Republican Party may no longer be a normal party. Over the past few years, it has been infected by a faction that is more of a psychological protest than a practical, governing alternative….
[T]o members of this movement, tax levels are everything. Members of this tendency have taken a small piece of economic policy and turned it into a sacred fixation. They are willing to cut education and research to preserve tax expenditures. Manufacturing employment is cratering even as output rises, but members of this movement somehow believe such problems can be addressed so long as they continue to worship their idol.
Writing for The Nation, Allison Kilkenny sees this as “the era of the one-sided compromise, where millionaires are taxed at rock bottom rates while the working poor have their pensions stolen from them.” “The national calls for ‘shared sacrifice’ during these times of austerity,” Kilkenny begins, “presuppose that giant corporations like Goldman Sachs and Exxon Mobil share the same amount of privilege and power as, say, your grandmother.” Yet, a somewhat insignificant tax increase among the wealthy (from 35 to 39 percent) is not, argues Kilkenny, in the same ballpark as “significantly gutting the social safety net for the poor majority.” Focusing on Governor Christie of New Jersey, Kilkenny writes of the “one-sided compromise”:
The state Democrats laid down during this vicious attack on the working poor in the spirit of bipartisanship, naturally. Sharing the sacrifice, and what not. Of course, then the Democrats were simply shocked—shocked!—that a Republican governor, who they had just sold out their own party in order to support, would then turn around and stab them in the back.
In another article, Kilkenny concludes, “it seems like state governments operate in one of two modes: paralysis or aggressive punishment of the poor.” Currently the Minnesota state government is operating within the former mode. Here, too, we find the one-sided compromise at play. As Doug Grow writes in MinnPost, “The depth of the problem Gov. Mark Dayton faces grows more evident each day: He cares about governing; the Republican majority he is trying to deal with cares only about winning.” (See “psychological protest” above.) In a side-by-side comparison of the Dayton and Republican-controlled legislature’s budgets from Minnesota Public Radio reporter Catherine Richert, we see mostly cuts and reductions in the “Common Ground” category, including the following: “Cut education department funding by 5%”; “Eliminate scholarships for high achieving, low-income students”; “Reduce grants for child protection and mental health services”; and “Cuts to job training funding.” (Emphasis added.) When we get to the Taxes row, the “Common Ground” column is left blank.
Despite the widely-reported notion that these government stalemates are a product of the people electing officials that fall into one of two camps—no-new-tax-Republicans or tax-and-spend-Democrats—it seems to me that that’s not the case at all. While Democratic leaders continue to disappoint the far-left among them (and not just on economic issues; see, too, the Afghan and Iraq wars, health care, Bradley Manning, et al.), Republican leaders refuse to put aside for a moment a few core beliefs in the interest of anything resembling an actual compromise. As Brooks writes, “The party is not being asked to raise marginal tax rates in a way that might pervert incentives. On the contrary, Republicans are merely being asked to close loopholes and eliminate tax expenditures that are themselves distortionary. This, as I say, is the mother of all no-brainers.” But since they need to remain steadfast for the most die hard among them, they won’t even entertain that much. And still, some see the exact opposite. The St. Paul Pioneer Press, in the days leading up to the Minnesota government shut down, wrote,
Rather than work out differences and sign off on large portions of the budget on which agreement is within reach, Dayton has as of this writing refused to get deals done and preserve operations in those parts of government. This is not compromise. This is hostage taking.
I’m not sure how you debate, much less compromise, in such an atmosphere. But it seems that if most economists say a balanced budget must come from a combination of spending cuts and new revenue, including increased taxes, then a party that simply says “no” to one of those two is not compromising, while the party that agrees to at least some from both avenues is closer to achieving what that word—compromise—actually means.
Of course, the fact that I can only write about this in terms of two parties is probably really at the heart of all of our state and national problems.
*Utne Reader is based in Minneapolis, Minnesota.