So, in the end, the Reagan Revolution ended Thursday with a whimper and not a bang. For nearly three decades, the only thing that unified Republicans in all circumstances was an aggressive anti-tax stance.
The revolution began with Reagan's 25 percent cut in personal income taxes passed in 1981. While disagreements over foreign policy (Kosovo) and social issues (immigration) would arise in the GOP over the years, tax-reduction and anti-tax philosophy was the glue keeping the coalition together. The one time that there was a split -- when George H.W. Bush's lips moved in 1990 -- was the exception that proved the rule. The future leaders of the party -- Republican Whip Newt Gingrich, Dick Armey and others -- staged a rebellion among the House GOP on behalf of the Reaganite tax policy. After Bush I lost in 1992 (which the base of the party blamed on his violating his tax pledge), those rebellious House leaders went on to formulate the Contract With America, which included no less than nine tax limitation or cutting measures. That background is important to understand the significance of Thursday's House vote to impose a 90 percent tax on individuals who got bonuses from A.I.G. and other firms who received more than $5 billion in federal bailout money. The vote was 328-93. That's significant because it was brought to the floor under terms called "suspension of the rules." That means a bill can be considered without going through the usual process of being debated and voted out of committees.
Bills considered under "suspension" are usually uncontroversial, ceremonial bits of legislation -- like honoring a recently deceased beloved entertainer or naming a bridge after a favorite Kennedy (hmmm...poor choice of words). They require a two-thirds support for passage. In fact, they usually pass by voice vote. In any event, regardless of the "crisis of the moment," any bill that contains a 90 percent tax levy (no matter how narrowly tailored) could hardly be considered "uncontroversial." Even with the large majority that Democrats have, a two-thirds vote requires Republican support.
Which is why I assumed there would be no way that this bill could get out of the House under these circumstances.
But, one could see something was "up" when Grover Norquist, the high-priest of anti-tax theology -- who demands that candidates sign a no-tax-raising pledge -- declared that voting for a tax on bonuses was defensible-- with a pseudo-caveat:
"If your goal is to recoup the resources that you've given people that you hadn't thought would be spent this way, you can make it not a tax increase simply by having an offsetting tax cut on honest taxpayers," Norquist explained. "Or you could do the same thing by cutting the amount of money that you were going to give AIG in the next tranche that they'll demand, so you can have the withdrawal of the resources done in less spending."Ah, right. I really can't imagine any other circumstance where Grover would give Republicans a pass to raise taxes today -- with a promise of cutting them later! Who is this -- Wimpy? "I'll gladly pay you Tuesday for a hamburger today.
Come to think of it, "wimpy" is a pretty good description.
Geez, Grover, glad to see that Benedict isn't the only Pope offering indulgences.
Now, Grover can justify this all he wants, but it's clear that he's allowed his populist instinct to overwhelm his anti-tax foundation (pun intended).
With Grover's dispensation out of the way, the eventual vote couldn't be seen as too much of a surprise. Unlike 1990 when the future leaders of the House and the conservative movement voted against a tax hike, GOP Whip Eric Cantor (who models himself after a young Newt Gingrich) ended up voting for the bill, bringing 84 other Republicans with him.
You know how bad this bill is? It's so bad that even liberal writer Josh Marshall -- who has been doing yeoman work in mining this A.I.G. story and everything connected to it --calls it an "ill-advised..Frankenstein."
Yet, Cantor & Co. couldn't see that. They especially couldn't see what precedent was being set. Sure, they might say that this was a special circumstance and won't be replicated. But, they are now on record as voting for a 90-percent rate confiscatory tax -- and as the old joke goes, "Madam, we've already determined what you are; we're now just haggling over the price."
And, that's how the Reagan era died in the Republican Party.
With a wimp-er.
Labels: A.I.G., AIG, Eric Cantor, House Republicans, Newt Gingrich, Republicans, Ronald Reagan
My final appearance on News & Notes as NPR brings the show to a close. Thanks to Ed Gordon, Farai Chideya and, most recently, Tony Cox for several years of fun and informative political discussions (if I say so myself)!
So long, and thanks for all the fish!
Labels: "News And Notes", NPR
Putting politics aside for St. Patty's Day, two takes on a nice Irish ditty:
Labels: Barack Obama, St. Patrick's Day
My friend Steve Clemons zeroes in on an underreported aspect of the AIG mess -- mega conflicts-of-interest involving the people involved in both the financial mess itself and the bailout "fixes":
While many are criticizing the gross and wrong AIG taxpayer-funded bonuses of senior executives, the truth is that that kind of corruption is relatively small time -- even at $165 million -- and was predictable. The outrage expressed by Obama, Lawrence Summers and Tim Geithner must be feigned -- or they don't know what they are doing in the positions they have acquired.
But what is serious is that Goldman Sachs executives seem to have lied or at best seriously misled the media and public during the early stages of the AIG financial crisis stating that their firm did not have significant exposure to AIG's collapsing financial position.
But after AIG published its roster of financial distributions, Goldman Sachs comes in on the top of the list at $12.9 billiion.
Treasury Secretary Paulson and former Treasury Secretary Bob Rubin both served as top executives at Goldman Sachs -- and in the end, they wouldn't let Goldman collapse despite allowing Lehman Brothers to die.
Rubin and Paulson have had major conflicts of interest that make Tim Geithner's tax manipulations while an IMF employee look pathetically insignficant. Tom Daschle's rides in a town car, Killifer's failure to pay taxes on domestic help, and others who have avoided government because of the very high hurdles Obama has set for those who join his team simply pale in comparison to what we have learned about Bob Rubin's ties to Citibank, Goldman and the Treasury; Hank Paulson to both Treasury and Goldman -- and which have implications as well for their chief acolytes Lawrence Summersand Timothy Geithner.
AIG and Goldman both lied about their positions last September. And Hank Paulson and other major financial elites involved in the AIG bailout knew it also.
That is the story we should be following -- but few are paying attention.
Because, $165 million is a figure that the average person can get their minds around. As Rich Lowry points out in his column today. Those same $165 million bonuses have turned out to be the straws that broke the camel's back in terms of public outrage -- even though the actual cost of bailouts, guarantees, loans, etc. is $11.6 trillion, and counting.
Monetary figures beginning with "m" are about as high as the human brain can comprehend. Once things start flowing into the billions and trillions, humans slip into MEGO.
But Steve's point is a good one: When do the investigations start on the full relationship between AIG and Goldman Sachs? And are Democrats and Republicans ready to start grilling both Paulson and Rubin on what they knew and when?
Labels: A.I.G., bailout, Barack Obama, Henry Paulson, Robert Rubin