President Reagan used to joke about the deficit, saying it was “big enough to take care of itself,” and Republicans lauded him for finally ending the GOP’s decades-long obsession with curbing deficit spending and balancing the federal budget. What happened to change that Reagan-era calculus?
Back then, nobody could get their mind around $3 trillion, which is what the debt was in 1989. Today the number is an unfathomable $13 trillion, yet the issue of government borrowing has taken on a power it hasn’t enjoyed since Ross Perot, the billionaire Texas populist, made it the center of the presidential campaign in 1992. Meanwhile, the U.S. debt clock, installed more than two decades ago on West 42nd Street in New York City by a civic-minded businessman disgusted with politics as usual, ticks away in a new location nearby. Maybe, finally, its time has come again.
Why is the deficit the top issue in voters’ minds? Does the average person really grasp how the deficit could affect their lives? The reality is that they don’t really have to. What’s given the issue such potency as a political issue is government spending. The deficit is really a symbol for the anger that people feel about the amount of money that has been poured into the economy, without any tangible returns that they can see in their own pocketbooks. “The American people are not Keynesians,” says Brookings scholar Tom Mann. “In tough economic times, they spend less, and they think government should do the same.” Democratic pollster Geoff Garin agrees: “The deficit is more of an intellectual concern. The emotional concern is spending. And the president’s decision to spend a trillion dollars on health care was a pretty substantial fork in the road.”
With Senator Kennedy dying from a brain tumor and Democrats geared up for health care, a dream Kennedy had long pursued, Obama would have had a difficult time walking away from the challenge early in his administration. But he paid a huge price. The long and gritty fight to pass the health-care bill defined Obama in the minds of the voters as a proponent of big, expensive government, and it also made voters angry that a year was spent focusing on something they didn’t care about as much as jobs and the economy. In an interview with The New York Times’s Peter Baker, Obama doesn’t admit to many mistakes, but he does say he regrets letting himself be portrayed as just another tax-and-spend liberal. How many times do Democrats have to learn that lesson?
Obama should have borrowed a page from Perot and gone on television with charts and a pointer and explained to the American people why he believed it was necessary to pump money into the economy. There would have been greater understanding about the policies he was pursuing rather than a vacuum that the other side could fill with fears about a big-government takeover. There’s a difference between short-term deficit spending designed to help the economy recover and long-term structural deficits that should be dealt with once things are humming again.
Republicans have cast themselves as the deficit reducers in this election, even though earlier this year, they blocked the creation of a fiscal commission that would have come up with proposals to reduce the deficit, which Congress would then have voted on. Obama then had to appoint such a commission, which will report in December. Our politics are so out of whack that Republicans routinely oppose with impunity what they once supported. The health-care plan is founded on Republican principles: a competitive private insurance market; an individual mandate, which Republicans used to be for; and cost-cutting measures like a super Medicare commission, which is not really a radical idea. But in tough economic times, people focus on themselves—seniors worry about Medicare cuts, and Tea Partiers don’t want their taxes used to help people who may be undeserving.
The politics are driven by tough economic times, and for the historically minded, it’s worth remembering that when FDR won, unemployment was 25 percent. He was reelected in a landslide as unemployment fell to 16 percent, which is still a big number but was heading in the right direction. “People respond to real facts on the ground; people are not stupid, and unless and until real facts change, White House talking points are not worth the paper they’re written on. And I used to write them,” says William Galston, a veteran of the Clinton White House. “All people care about is what [the government] has done for them.”
Galston’s theory is that the Tea Party brings together two enduring strands in American culture, mistrust of government power and anti-elitism, and that Obama has perhaps unwittingly played into both. He took office with two agendas: the one he ran on, which meant delivering on the promise of health care, and the one he inherited, which required saving the economy. The result was a more active and visible government than Americans were comfortable with, so they took their anger out on the elites they blame for caring more about the bankers on Wall Street than the real people Sarah Palin and the Tea Party venerate. The frustration for Democrats facing the voters in a few short weeks is that Obama made it so easy for this narrative to take hold.