by John M. Curtis
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Copyright January 16, 2000
All Rights Reserved.

overnment is too big and it spends too much," said Ronald Reagan during campaign ‘80, reinventing Republicanism and making tax cuts the centerpiece of his campaign. With the economy stuck in reverse and heading south and with Reagan’s legendary charm mesmerizing voters, upending Jimmy Carter went like clockwork. "The federal government doesn’t make money, it just takes it from the people," argued Reagan, making the best case for his famous 10% across-the-board tax cuts over three years—a whopping 30% rebate to taxpayers. But even Reagan warned that these reductions were only a minor dent in Carter’s recession-era tax rates. With deficits replaced now with massive surpluses, George W. Bush is asking a more basic question: What right does the government have to collect whopping profits at tax payers’ expense?

       Picking up on this theme, George W. Bush is trying to correct this imbalance and help Republicans reestablish their ideological spine. Since Clinton moved Democrats to the right and hijacked Reagan Republicanism in 1992, Republicans have been back on their heels. Only Newt Gingrich’s short-lived 'contract with America' offered a brief window of Republican momentum. Tired of acrimony and gridlock, Gingrich and the Republican majority lost their steam—and their mandate. With Gov. Bush’s new tax cut proposal, the same prophesies of doom and gloom are seeping into campaign 2000. Ironically, Bush’s receiving as much opposition from Sen. John McCain as his likely Democratic challenger, vice-president Al Gore.

       Back in 1980, with the Carter administration running more than 60 billion dollars of red ink, Republicans sought to pass a constitutional amendment balancing the federal budget. Balancing budgets in those days never dealt with what to do with anticipated surpluses. That was considered unthinkable. While it never happened, its logic was well taken. Arguing for cutting government spending, Reagan noted, "When you’ve got a kid who’s extravagant, you can lecture him all you want about his extravagance or you can cut his allowance and achieve the same end." Stamping-in his point, Reagan observed, "Government doesn’t need the money it gets, it gets the money it needs." While this idea registered well in 1980 when the government was running deficits, it’s a different story now that they’re raking in excessive surpluses.

       But just as Reagan argued for cutting government spending, Gov. Bush is now advocating returning a small fraction of workers’ earnings. "You mark my words: You leave money around the table, Washington politicians will spend it," commented George W. Bush. Beyond a campaign gimmick, Bush is rightfully questioning who really owns the surplus? In his view, it belongs to the people—and government has no presumptive right or authority to pile up massive surpluses at tax payers’ expense. Reagan’s former budget director Dave Stockton never dreamed that they’d worry about rebating surpluses. Today, Bush’s major challenge—just as it was with Reagan in 1980—is ignoring the boo-birds, remaining optimistic, staying the course, and giving tax payers what they badly need, tax relief.

       Like moderate Republican John McCain today, candidate George H.W. Bush railed against Reagan’s bold tax cut proposal, calling it fiscally irresponsible. Citing his leading economic advisor, the distinguished economist Paul McEvoy, Bush said Reagan’s plan would cause 30% inflation and called it "voodoo economics." If the Reagan White House proved anything, it certainly put to rest any doubts that tax cuts caused more inflation. Reagan’s ambitious promise of balancing the budget by 1983 badly miscalculated the time needed for the economy to recover and generate revenue. Even president George H.W. Bush couldn’t pull off a balanced budget. Only two years into Clinton’s presidency were the promises of Reagan’s tax and spending cuts finally redeemed with a balanced budget.

       Now we have McCain playing the spoiler, deprecating George W. Bush’s tax plan for "taking every last dime of the surplus and spending it on tax breaks that benefit the wealthy." McCain’s argument revolves around his belief that the wealthiest Americans stand to gain the most. Well, that’s always true. They also have higher tax rates and pay more taxes. What’s unfair about across-the-board tax cuts? Radicalizing the present tax code and scraping the IRS—as suggested by Republican candidates Steve Forbes, Gary Bauer and Alan Keyes—makes middle class voters even more skeptical. Voters are equally leery of candidates promising to radically transform Social Security and Medicare. Most people want to be reassured, not injected with anxiety that radical changes are on the way. While it’s good to brainstorm about fixing broken programs, insisting on radical change usually boomerangs with voters.

       Watching Gore and Bradley duke it out about who’s going to spend more tax dollars, George W. Bush finds himself in the unique position of giving something back to hard working voters. With the government projecting more than a trillion dollars surplus over the next 10 years, it’s a tough sell to insist on keeping all the money and paying down the national debt, fixing Social Security and Medicare, financing questionable national health plans or anything else. Sen. McCain insists that his 237 billion dollar tax cut proposal pays down the debt and saves Medicare and Social Security. But Gov. Bush’s plan also has provisions for dealing with entitlement programs. Speaking more like a 'third way' Democrat, McCain may be playing to crossover Democratic voters, certainly not his base whose views more closely parallel those of Gov. Bush.

       Rediscovering the Republican identity, George W. Bush is heading to Iowa and New Hampshire talking the talk and walking the walk. Gathering momentum, Bush is beginning to take the wind out of McCain’s sails. McCain finds himself in the peculiar place of bidding for voters more closely aligned with Clinton’s policies. While other Republican candidates find themselves on the fringe, McCain finds his support dwindling expressing 'moderate' views more reminiscent of the Clinton administration. By reminding voters why they’re Republican, George W. Bush seems to be peaking at the right time—things are looking up in Iowa and New Hampshire.

About the Author

John M. Curtis is editor of OnlineColumnist.com. He’s also the director of a West Los Angeles think tank specializing in human behavior, health care and political research and media consultation. He’s a seminar trainer, columnist and author of Dodging The Bullet and Operation Charisma.

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