November 18, 2014 | Commentary on Economy, Economic Growth, Political Thought

Can’t We All Get Along?

At a recent small dinner at the end of the fabulous Freedomfest gathering at the Paris Hotel in Las Vegas, major supply siders, libertarians, Tea Partiers, and traditional conservatives gathered to discuss strategies to regain political power in Washington. The libertarian faction fumed with the familiar complaint that the GOP will only win back young and female voters in 2016 by abandoning social issues like abortion and gay marriage—which would in effect toss the evangelicals off the bus.

Yet this has also become a common recommendation from the country-club Republicans who may not be members of the Tea Party movement but who write the big checks. “We must have a truce on the social issues; it is turning off voters” complains one prominent Wall Street financier who raises money for the party. By “truce,” he means “surrender.”

Regardless of how one feels about these social issues, does anyone honestly believe the GOP can put together a winning coalition without the reliable voters and activists who make up around 40 percent of the party? Will replacing a pro-life platform protecting the sanctity of the unborn with, say, one on drug legalization make the big tent bigger? It turns out Mitt Romney did a pretty good job “de-emphasizing” social issues, and look where that got him. Several million white evangelicals stayed home in 2012. This is an especially misguided political strategy given that the electorate is becoming more, not less pro-life over time. Gallup shows the electorate split almost evenly today, at 46 percent pro-life and 47 percent pro-choice, compared to 41-51 in 2006, or 33-56 in 1995. The issue may be a net plus for the GOP in most states outside of liberal bastions like California and New York—places that Republicans aren’t likely to win anytime soon anyway.

I would propose an altogether different strategy: Pull together the old Reagan coalition, which is still unbeatable when united. To borrow the immortal words of John Belushi in The Blues Brothers: it’s time to “put the band back together.” Liberals can’t win a majority when this coalition holds. Add up the Americans who identify as libertarians or conservatives, and you get 56 percent. Just 34 percent call themselves liberals.
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Pursuing this fusion strategy may not be, as Dan Aykroyd put it, “a mission from God.” But undoubtedly the highest priority for conservatives, free marketeers, libertarians, and everyone else who wants to grow the economy and shrink the government is to defeat her in 2016. A Hillary Clinton victory would cement in place and validate all the havoc and “transformation” that Barack Obama, Harry Reid, and Nancy Pelosi have inflicted on America. It could swing the Supreme Court to the left for two decades, meaning those 5-4 and 6-3 decisions will start tilting irretrievably against us. In short, a Clinton victory will be a colossal setback. The fact that Mitt Romney lost in 2012 only doubles the stakes in 2016.

So why are all the guns in the center-right coalition aimed at one other, not against the Death Star that is the modern Democratic Party? The kind of squabbling that I saw in Vegas between social conservatives and libertarians is breaking out all over these days. The Chamber of Commerce is at war with the Tea Party groups, and both factions are spending money to defeat the others’ candidates. The conservative super PACs have waged a war against Republican congressional leaders Mitch McConnell and John Boehner. Once upon a time conservatives (including your correspondent) declared war against real tax-and-spend GOP liberals like Arlen Specter and Lincoln Chaffee. Now some people’s litmus tests are so strict that a life-long conservative like Mitch McConnell is judged impure. Jeb Bush, one of the most innovative free-market reform governors of the last two decades, is denounced as “too moderate” at Tea Party events. When I wrote a column earlier this year defending Republican House Majority Leader Eric Cantor for his effective leadership in budget negotiations against Barack Obama in 2011 and for helping bring down the deficit from $1.4 trillion to $400 billion, I was attacked as a sell-out and a member of the “establishment.” My colleague Dan Henninger at the Wall Street Journal tells me he gets similar rant emails from Tea Party conservatives. “Wait a minute,” he replies, “I’m one of the original Reagan Republicans.” That’s not good enough?

Even on the economic issues, dangerous fissures have appeared. A group calling themselves “reform conservatives” has sprouted with some good ideas about regulation and welfare reform, and some bad ones about tax policy. One plan being floated would increase the child credit to help families with children, but marginal tax rates would have to rise to pay for it. The New York Times has written fawningly (which says a lot) about reform conservatism. To supply-siders it is exactly the wrong way to go on tax reform.

When it comes to tax policy, the reformers’ agenda ignores the primary economic lesson of the last forty years, namely, that lowering tax rates ignites growth. Tax rates matter most at the margin, or on the last dollar earned, and credits and deductions are dead weight losses. This isn’t dogma: it’s a matter of economic history.

The problem for the middle class today is not that their income taxes are too high; it is that their incomes are not growing—in fact, they are shrinking relative to inflation. The middle class has been flattened financially over the last eight years, and putting more money in their pocket won’t make up for $2 trillion of lost growth.

What is worse is the idea of taking millions more families off the income tax rolls entirely. Currently about four out of ten Americans pay no income tax, and that could grow to more than five out of ten under this new tax plan. This smacks of “representation without taxation.” The better way to go is to ensure that nearly everyone—except the very poor—pays at least some income tax. But everyone pays a manageable rate. If the party intellectuals are looking for something to really electrify voters, something like Herman Cain’s 9-9-9 plan will be far more potent than a child tax credit. Of course there’s nothing wrong with airing out different ideas in a presidential primary campaign, but the core principle of prosperity-based tax reform that should unite us all is “broad base, low rates.”

My friend April Ponnuru, a prominent reformicon, says that Republicans have “nothing to say to a mother with three kids” in the bottom half. Yes, we do: it’s called growth and opportunity, which come from businesses and jobs, which come from things like supply-side tax cuts. These dots aren’t that hard to connect.

The challenge is to fuse a winning coalition united against a common and dangerous enemy. Saying that the GOP can’t win with the Tea Party or with the pro-lifers or with the business wing is short-sighted. Those who think it’s hard to win with these groups forget how painful it is to lose without them.

 - Stephen Moore is chief economist at The Heritage Foundation.

About the Author

Stephen Moore Distinguished Visiting Fellow
Project for Economic Growth

Originally appeared in The American Spectator