Thursday, November 30, 2017

A Conversation with Author Bruce Bartlett, Part 1: Tax Bill Is "Dreadful Legislation"

Posted By on Thu, Nov 30, 2017 at 4:00 PM

Bruce Bartlett served as an advisor in the Reagan Administration and in the Department of the Treasury in the George H. Bush Administration. He later worked at the National Center for Policy Analysis and is now a newspaper columnist and a New York Times bestselling author whose books include The New American Economy: The Failure of Reaganomics, and The New Way Forward. In October, he released a new book The Truth Matters: A Citizen's Guide to Separating Facts From Lies and Stopping Fake News in Its Tracks. This interview is taken from an upcoming appearance on the radio version of Zona Politics with Jim Nintzel, which will air at 5 p.m. Sunday, Dec. 3, on community radio KXCI, 91.3 FM. The Range will feature more of this interview tomorrow.

Let's get right to what's happening in Washington. You are certainly not a fan of this GOP tax proposal that's moving forward this week.

No, I think its dreadful legislation, and the proof of that is that the Republicans are trying to rush this thing through in the dead of night without anybody knowing what the hell is in the legislation. If it's so great, they should be detailing it, all its various provisions, instead of keeping them secret. So I think this is just going to be very harmful to the economy if it passes. I've been saying I think it will have zero impact on growth, it might even reduce it. It's a replay of what was done in Kansas a few years ago, which was a disaster. I think the second the legislation is enacted, all these Republicans, who blithely increased the budget deficit and the debt by $1.5 trillion, will suddenly notice that the deficit is mysteriously and unexpectedly gotten $1.5 trillion bigger. They will insist that spending must be slashed. I think people really need to be aware that this is just phase one of a two part plan to, basically, downsize and decimate the government.

In particular, you think they are going to target the entitlement programs like Social Security and Medicare.

Well, they will have no choice because (A), they cannot raise taxes because they've all signed a tax pledge that prevents them from doing so and, besides, it's against their ideology anyway. And (B), defense will have to be exempted because that's what Republicans do, they exempt defense. If you take that out, you take out things like interest on the debt that can't be cut, all you're left with to get serious money is entitlement programs, Social Security, Medicare, and Medicaid. Because there's not much left in the government that it does, that you can get hundreds and hundreds of billions of dollars of spending cuts out of.

You were actually there for the 1986 tax reform that was done during the Reagan Administration and that seemed to be a bipartisan project that really took a serious look at loopholes. How does what you're seeing this year differ from what you saw in 1986?

Well, there's no comparison whatsoever. The 1986 Act had, as its underlying premises, that it would be revenue neutral, so the cuts in tax rates were paid for dollar-for-dollar by base broadening, by getting rid of loopholes. And secondly, the legislation was distributionally neutral. That is, that no particular income class got more than any other class. It was pretty even across the board. This legislation has virtually no reforms of any kind in it. It's just random tax increases to pay for huge tax cuts for the wealthy that is going to greatly increase the national debt and lead, inevitably, to cuts in Medicare, and Medicaid, and Social Security.

Yet, it's being presented as a once in a generation opportunity to do that kind of similar tax reform as 1986. That's really a fig leaf that they're placing on top of this.

I would say it's just a lie. It's just a flat-out lie.

Are you surprised that Republicans seemed to have temporarily—and you predict this won't last long—but they seem to have temporarily lost all concern about increasing the deficit?

No, because this is part of a long-term strategy that I call “starve the beast” that dates back, at least, 40 years. That Republicans one day came to the realization that the only time they can have a chance of slashing entitlement programs is when the deficit is so large there's no other choice. That old line from Yes, Minister, where they tell people, “We must do something. This is something, therefore, we must do it.” So people are presented with these fait accomplis that they have no real voice in. I think that, that is really their strategy. They want to increase the deficit. They love deficits because when deficits are large, they can slash programs for the poor and the middle class. Everybody misunderstands the Republican motivation entirely.

What do you see as the Republican motivation?

To slash government. They hate the government. They want to make it not work because then they can justify further cuts. They're dogmatic. They're driven by an Ayn Rand mentality that the government is, per se, evil and anything you do to cripple it, cut it, downsize it, is, per se, the moral and correct thing to do. They don't actually care about economic growth. If there's more economic growth because government is smaller, that's a side benefit. This is driven by their sense of morality, which says government is evil, must be destroyed.

When do you think the Republican Party took a turn in this direction?

Well, that's a good question. Certainly, Barry Goldwater's campaign in 1964 was very important, in terms of elevating this kind of Libertarian ideology, but it didn't really take hold. Nixon pretty much went in a completely different direction. Ford, even Reagan, was not nearly as anti-government as is his rhetoric in practice. He was actually pretty moderate. Really, it's since 1994, I would say, when Republicans got control of Congress and people like Newt Gingrich who very much believes in the philosophy I've explained. And, of course, Paul Ryan has said, on many occasions that he is a devotee of Ayn Rand and her book Atlas Shrugged. It's more from the Congress side, and really, it's only since Trump was elected that they've had a Republican president who really, really bought into this anarchistic kind of philosophy.

Why do you think Trump was able to essentially take over the Republican Party and win the presidency?

I think the simple answer is, he had 16 people—or something like that—running, dividing up the vote and Trump won with a plurality because he had the best name ID. He had these various right wing organizations affiliated with the Tea Party and other groups working on his behalf. He appealed to racists and neo-Nazis, who may be very small, but are very disciplined. He was able to put together a coalition of, Hillary called them, “deplorables.” I'd use a stronger word, but it was stupid of the Republican mainstream. They should have recognized the Trump threat. Some of the weaker Republican presidential candidates should have dropped out much, much earlier than they did and allow the strongest mainstream candidate, probably, Jeb Bush, to go one-on-one with Trump. In which case, he probably would have won. Then Trump won the general, again, with a lot of luck. He certainly had nothing to do with that letter that James Comey wrote, that just was disastrous for Hillary Clinton. And she was just a really, really lousy candidate. Democrats should have nominated somebody else, but she was positioned to pretty much push everybody else out. This happens on the Republican side, as well. Bob Dole in 1996 would be a good example of somebody who got the nomination even though it was pretty clear he couldn't possibly win.

All this said, you're also not a fan of the Democratic Party.

No, I consider myself to be an Independent. I mean, of course, I vote for Democratic candidates because, at least, they're sane. But the party, as a whole, I think is just institutionally feckless. A lot or Republican craziness, over the last 20 years or so, came about because the Democrats did a really crappy job of opposing what Republicans were doing. They've got lots of excuses, we don't have billionaires on our side, well, of course, they do. They have their Democratic billionaires who could do a lot of the same stuff that Kochs and the Mercers are doing. They just don't do it. Why? I don't know. I think there's a lack of leadership. I mean, there isn't anybody really on the left, broadly speaking, who, other than maybe Bernie Sanders, who's so old and cranky that he's not really very effective. But, you know, I think there's an enormous opportunity for somebody, a Democratic back bench, to really make a name for themselves by developing a more aggressive, and focused, opposition to the Republicans than you're getting out of Nancy Pelosi and Chuck Schumer.

If you were to design a tax system today, what do you think it would look like?

It's hard to say because I'm too much of a political realist to put something that's pie-in-the-sky on the table. I would just like to see something that helps the middle class, helps the poor, actually helps increase economic growth, is not just a pure giveaway to billionaires. I think there's lots and lots of ways to improve the tax system, but we have to have leadership in Congress that is interested in it, not waste our time on pie-in-the-sky.

You were a supply-side economist in the 1980s. Times have changed since then—have your views on economic policy changed along with those times?

Well, my view has always been, even back in those days, is that you need economic policies that are tailored to the particular circumstances of the times. I think, and I still believe, that the policies Reagan followed were, by-and-large, good for the economy, but we have a completely different set of economic circumstances today. Back in those days our principle economic problem was inflation. Today there is no inflation, it's completely gone. I think that requires different policies and, right at the moment, I mean, if it was up to me, I would instead of having a $1.5 trillion tax giveaway to the ultra wealthy, I'd have a $1.5 trillion infrastructure public works program. Because we have tons and tons of stuff that needs to be done, desperately, to deal with, for example, climate change. We need to be building sea walls all around the United States to protect against flooding and things of that sort. Those projects, I think, would pay dividends for, literally, decades to come. This tax bill will have zero economic benefits and, certainly, nothing remotely lasting.

Are you surprised that there's been no movement on infrastructure? Originally there was a lot of talk, we're going to do an infrastructure bill.

This gets back to Democratic fecklessness. Here's an area where they could've had some agreement with Trump, potentially, but the party that supposedly supports infrastructure never says anything about it. You know, sometimes they seem very, very easily distracted. I mean, you can see, for example, these sex scandals, which just claimed the career of Matt Lauer and Democrats are very busy talking about this and all it does is just distract them from the really important stuff that's going on right now, which is the tax bill. I think Republicans are much, much better than Democrats at staying focused. Democrats are too easily distracted when something else comes along.

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