Painting the country red

How Republicans learned to stop worrying and love the deficit.

By Jake Tapper

May 15, 2003 | On Tuesday, President Bush's nominee for the Council of Economic Advisors, Harvard economics professor N. Gregory Mankiw, tried to defend his former adherence to fiscal responsibility before the Senate Banking Committee.

In his textbook, "Principles of Economics" -- a new edition of which was released just this year -- Mankiw argued against Arthur Laffer's theory that tax cuts, in encouraging economic growth, are self-financing. Mankiw also argued in that book that rising deficits are extremely harmful to the economy, by driving up interest rates and severely inhibiting growth.

There was a time when such arguments weren't controversial -- and in fact, they were commonplace among Republicans. But times change. And Mankiw -- as a potential Bush administration official -- endorses the president's most recent tax-cut proposal, $550 billion in the House version and $350 billion in the Senate, saying that the slow economy necessitates bold action.

"I hate to see a highly competent professional turn himself inside out, twisting like a pretzel," said Sen. Paul Sarbanes of Maryland, the ranking Democrat on the committee.

It's unfair, however, to pick on Mankiw; these days the Beltway is a veritable Mr. Salty Goes to Washington. And unlike the unfortunate January 2002 snack at the White House, these pretzels are putting a smile on the president's face.

Dozens of top-tier Republican officials for whom reducing the deficit once seemed their raison d'être are now in practice completely contradicting that position. Though the sluggish economy explains some of this, many of these officials were, when it came to eliminating the national debt, as hawkish during the economic downturn of 1990-91 as they were throughout the rest of the '90s. "Frankly, I find it to be one of the most incomprehensible political events in this country over the last 25 years," former GOP Sen. Warren Rudman of New Hampshire tells Salon. Rudman, a deficit hawk who helped found the fiscal-prudence-preaching Concord Coalition, says that he talks with former colleagues currently in the Senate to "try to get people to explain it to me and they can't. I am nonplused."

Take Senate Majority Leader Bill Frist. "I support a balanced budget first, and then let's give a tax cut if there's a dividend," then-freshman Sen. Frist, R-Tenn., told constituents in June 1995. Eliminating the federal government's yearly deficits and the sizable national debt was all important to Frist. Just days after his election in November 1994, he began lobbying the Senate GOP leadership for appointment to the Budget Committee "to help him meet several campaign promises: to balance the federal budget, reduce the federal deficit and to reduce the size of government agencies," according to the Knoxville News-Sentinel.

And Frist wasn't fighting his cause alone. "People in America's heartland are frustrated with a Congress that cannot balance its own budget," Rep. Dennis Hastert, R-Ill., then just in his second term, said in July 1990. "It's high time for some accountability and some responsibility." Hastert said that Congress "acts a lot like feeding babies: irresponsibility on one end and no accountability on the other."

At the time, all over the nation, Republican officials decried the fiscal irresponsibility of Washington and swore that if they were in charge -- controlling the House, Senate and White House at the same time -- things would be different. That time has come, and projected deficits are higher than they've ever been before in the history of the known universe. Frist, who in 1995 called deficits "inhumane," is now shepherding the president's tax-cut package through the Senate this week, knowing that it will add at least $44 billion this year alone to the ever increasing national debt.

In February, after years of budget surpluses, the Bush administration projected a $304 billion deficit for this year, though that figure does not include the current tax-cut proposal or the costs of the war in Iraq. Before those were factored in, the Bush administration anticipated that deficits would continue at least through 2008, adding up to $1.1 trillion. The economy slowed down toward the end of the Clinton administration, as well as after the disaster of 9/11, but many estimates place the 2001 tax cut as the single largest contributor to the budget deficit.

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