The Gop's Worst Enemy
The Republican Party can't take "yes" for an answer. Its core center-right policies clearly have broad public support, but the party continually trips itself up on extreme partisan moves. The Democrats survive by taking advantage of GOP overreach and counterpunching with kinder, gentler versions of the Republicans' own programs. It happened in '96 with the government shutdown over the budget. It's happening again today. Will the GOP ever learn?
Take the disaster surrounding the disaster relief bill. Conservatives loaded up a much-needed bill to help communities in the Midwest recover from heavy flooding with two marginal provisions opposed by President Clinton. One would have forbidden government shutdowns during budget disagreements. The other would have prohibited the Census Bureau from using standard sampling techniques in the 2000 census for fear that the Democrats would somehow manipulate them to their advantage. The bill was delayed for weeks as Clinton refused to budge. And for what? The public didn't care a whit for the intramural partisan politics. People simply wanted the flood-aid bill passed and blamed the GOP for dodging it.
The Republicans are in danger of shooting themselves in the foot again with the tax bill. They're offering a $500-per-child tax credit but not to the poorest working families, who need it most. The reason? The poor already receive an Earned Income Tax Credit or a Child Care Tax Credit. Conservatives figure these families get enough government money and want to give the credit to higher-income families--who need it less. Once again, the Republicans open themselves to accusations of being mean-spirited to the poor.
Ditto for the inheritance tax. There's a good argument to be made for raising the tax exclusion from $600,000 to $1 million for small farmers and business people whose estates are up in value thanks to inflation and higher real estate prices. But bumping up the exclusion on the inheritance tax will affect only about 30,000 estates annually, or less than 1% of all deaths in a nation of 270 million. Of those hit with taxes, 1,500 are farmers and 2,000 are small business people. All the rest are actually well-off investors with assets in stocks, bonds, and mutual funds. Their estates already get one tax break, because capital gains are wiped out at death. Their heirs also have generation-skipping trusts, charitable foundations, and other gimmicks to avoid paying inheritance taxes.
If the GOP wants to help the estates of 3,500 small farms and businesses that get hit every year, it should simply raise the exclusion rate for them. If it really wants to help the millions of small businesses in America that must operate under onerous burdens, it should lower payroll taxes. This bad behavior on the inheritance tax issue is yet another example of why, for the GOP, the positive message of lowering taxes gets lost in the issue of fairness. Instead of being a supporter of the middle class, the GOP opens itself up to being mean to the poor and helpful to the rich--all over again.
The plain fact is that on the issues of lowering taxes, balancing the budget, and reforming entitlements, the country is center-right and squarely behind the GOP. But when the GOP veers to the fringe or caters to tiny slivers of well-to-do constituents, it loses that backing and makes itself vulnerable. Similar behavior is typical of the Democrats. Better to stick to the middle ground, sheath the partisan knives, and battle for the public's vote in 2000 on core issues.
To continue reading this article you must be a Bloomberg Professional Service Subscriber.
If you believe that you may have received this message in error please let us know.