Trading Places

This is the way it’s supposed to be, with division sharp, clear and meaningful.

There are two parties, and each believes in different things. The Democrats don’t want to cut federal taxes. They have their reasons. The Republicans want to cut taxes. They have their reasons too.

Yesterday in the House they held a vote on the Republican tax cut bill. It passed.

If the Senate follows suit, American taxpayers (and the economy they create each day and on which they depend) will experience a lightening of their federal tax burden. If this works—that is, if the American people enjoy the extra money and the economy seems either mildly boosted by it or undamaged by it—then the Republicans will get the credit. If it doesn’t “work”—if it produces results that allow tax cut foes to plausibly argue the cuts damaged the economy, or didn’t help it, the Republicans will get the blame.

If the Republicans are blamed enough, they will lose the House next year. And if they continue garnering blame they will lose the presidency in 2004.

So it’s all pretty clear and not at all murky. Whoever is right will triumph and be politically rewarded, and whoever isn’t will not.

This is good. It’s not “Tweedledum and Tweedledee,” and it’s not “There’s not a dime’s worth of difference between them.” It’s a choice, not an echo.

*   *   *

The Democratic leadership spread the word, and the carriers of the message repeated it on television all day yesterday: This is “the end of bipartisanship.”

In a way it’s true—the vote fell mostly along party lines, with only 10 Democrats defecting—but in a way it’s not. There has been no bipartisanship in Washington recently to begin with except symbolically from President Bush, who has liberal Democrats to the White House to watch movies and pass the popcorn and talk about the kids.

This is very nice. Politics should be civil, and everyone should be friendly “after six o’clock,” as Tip O’Neill rather pointedly put it to Ronald Reagan, who wanted to be friends. Before 6 there are great issues on which to disagree. That disagreement is natural and normal.

Politics is the daily working out of philosophical disputes and differences. The differences are not in themselves bad, because they speak of path-choosing, which speaks of movement and progress. A fight is a way to move forward.

And this was a fight.

*   *   *

I continue to be fascinated by the change in tone, if not philosophy, in each of the two parties in my lifetime. It is as if they have switched personalities and temperaments. A missile defense? “Our allies and potential enemies will get upset!” say the Democrats. “If it will protect us that’s good, let’s try it, and if it works, we’ll give it to the world!” say the Republicans.

So too on the tax cut, the Republicans wading forward and the Democrats decrying. In the past 20 years the two parties traded places. And I still don’t fully understand why the Democrats went along with it.

Before 1980, Democrats were free-spending free spirits. They never worried about budget deficits. FDR didn’t care about deficits; he merrily spent and created and taxed and said it was necessary and if you didn’t like it you were greedy, a “malefactor of great wealth.” Harry Truman spent and created and taxed too, maybe not as merrily but almost as energetically. By the time they were done, marginal tax rates were over 90%, and America’s high-wage earners, including a young actor in Hollywood named Ronald Reagan, were so body-slammed by taxes they looked back with envy on the serfs of medieval Europe, who only had to pay the local liege a third to a half of what they made each year.

The American people put up with confiscatory tax rates for a long time, in part because they thought FDR and Truman and the Democrats were doing big and expensive work: fighting the Depression as best they could, stopping fascism, stopping communism, rebuilding Europe after World War II.,.

In the mid-1970s, when Jimmy Carter ran up an $80 billion deficit, his fellow Democrats didn’t say boo. They spent and taxed and had a heck of a time.

What did the Republicans do all those days, from the 1930s through the ‘70s? They griped and wrung their hands and were alarmed. “This irresponsible spending and taxing will do us in,” “You’re taxing the genius and incentive right out of the economy!” Journalists heard it once a week every week Congress was in session in the 1950s and ‘60s, from Senate Minority Leader Everett Dirksen and House Minority Leader Gerald Ford. It was called the Ev and Gerry show. They banged away on high spending, high taxing, the unbalanced budget. “A million here, a million there and pretty soon you’re talking real money,” Dirksen famously said, and it was funny at the time because a million dollars was a lot of money.

Then 1980. And Ronald Reagan came in and turned things upside down. He turned all the assumptions and arguments on their head. But he did this, amazingly enough, while sticking to the old Republican philosophy.

He cut taxes. He eventually got the top tax rate down from the 90s to the high 20s. It was breathtaking. He did two other things. He tried to get Congress, strongly dominated and led by Democrats, to cut spending, which for eight years it refused to do. And also, like FDR and Truman, Mr. Reagan increased spending on the military, attempting as Truman had to fight communism. But while Truman tried to contain it, Mr. Reagan tried to force it back, to force it out of business.

Like FDR and Truman, Mr. Reagan won his war: expansionary Communism was killed. Like FDR and Truman, he ran up a deficit. And in truth, like FDR and Truman he didn’t think it was absolutely the worst thing.

To begin with, he was optimistic. He thought it would all work out well with time. He thought the genius of American entrepreneurs, of American inventors and creators, when added to the inspiration and confidence brought by tax cuts, would equal an expanding, even an explosive, economy. It would only grow. And tax receipts would necessarily grow with more business activity and wealth. And that would take care of the deficit.

He also made a shrewd and tough calculation. If the Democrats in Congress (and in truth many of their Republican friends) continued to spend—and if he in response still chose to cut taxes and increased military spending—the result, ultimately, would be to inhibit the future growth of government. Congress in time would be forced to calm down, stop wild spending, get control of itself. (He insisted by the way that given a choice between a balanced budget and taking the money to turn an ignored and abused military into a credible force, he’d do the latter first. Weakness invited provocation and provocations resulted in death. Anyway we had a war to win.)

It all, dare I say it, pretty much worked. Mr. Reagan’s tax cuts inspired and led to the long boom, to nearly two decades of spectacular economic growth. Soviet Communism fell to its knees, and the costly bipolar disorder that had sickened the world was cured.

And tax receipts went up. Way up.

And the deficit in time disappeared.

And now the federal government has a surplus.

But the point is that between the first Reagan tax cuts and today, the Republican Party took on the character of Ronald Reagan. His faith and trust became institutionalized, an important element of the party’s thinking. Mr. Reagan admired the American people and expected them to produce great things. His optimism infused his party.

Republicans stopped being pinched and anxious and began to be expansive and expecting of good things. They buried their green eyeshades and went out into the sun.

*   *   *

And now we have George W. Bush, who received one of the most extraordinary educations of any American president. He saw two presidencies up close as an adult. He learned what to do from the triumphs of the first, Mr. Reagan’s, and much of what not to do from the traumas of the second, his father’s.

He now looks at the surplus and says: We will give it back to the people, because it was theirs to begin with, and as far as I’m concerned it still is.

Why does he do this? Same reasons, essentially, that Mr. Reagan did. Because he thinks it is right; because he thinks the economy, now in a downturn, needs the inspiration and boost of a cut; and because he thinks that if the money is left in Washington, Congress will spend it to create new programs and entitlements that must be funded, and the budget will soon go from surplus to deficit, and then we will have to raise taxes, which will further cool the economy and force more tax increases and new economic stagnation. And then you wind up with marginal tax rates of 90% again. And that isn’t right and doesn’t work. It’s so . . . yesterday.

And so it goes. The newest thing in town is Reaganism.

Or a more modest version of it. For Mr. Bush doesn’t refund all the surplus. His tax cut is small, perhaps too small to make much of an impact.

But Mr. Bush’s people would argue that it is small enough to pass, and so it is a first step on a journey of a thousand miles. Its passage gives him, six weeks into his presidency, what every new president needs: the aura of a winner. A solid win leads to a reputation as a solid winner. This is important. It’s nice when Congress likes you, but more important that it fears going up against you.

*   *   *

The tonal change in both parties—the Republicans as burly optimists, the Democrats as hunch-shouldered pessimists—was heard throughout yesterday’s floor debate.

Among the Democrats in the House the theme of the day was fear. Loretta Sanchez of California worried that we just “can’t afford a tax cut” this big. “It is too large,” fretted North Carolina’s Eva Clayton. Ed Markey of Massachusetts spoke with high-pitched anger, calling the cut “immoral” and charging that the new Republican saying is, “Ask not what you can do for your country, ask what you can do for your country-club pals.”

The ranking Democrat on the House Budget Committee, John Spratt of South Carolina, said a tax cut without a final budget resolution is “putting the cart ahead of the horse.” We’re ignoring “disciplines” and “the process,” he warned. Gene Taylor of Mississippi said we cannot afford a tax refund: “We now owe Social Security $1.7 trillion. . . . There is no surplus!” Brad Carson of Oklahoma asked, “How much we can afford to spend?”

It’s too risky, they said. “We could get away with it then”—in the ‘80s—“but I’m afraid we cannot get away with it now,” warned Ron Kind of Wisconsin. “We must be responsible,” said Kansas’ Dennis Moore. “We have to wait and see if any of this surplus materializes.”

It was all straight out of the Ev and Gerry show. The Democrats sounded exactly like the Republicans of 1949. That is to say like losers who don’t know what time it is. Like losers who do not lead but lament.

How did this happen? Maybe it’s this simple. The only thing the Democrats had—and have—on Ronald Reagan is the deficit. They’ve talked about how awful deficits are for so long they’ve come to believe it. Now they can’t help but sound like Scrooges.

This is too bad, and not worthy of a great party.

*   *   *

An interesting bipartisan moment came from Joe Moakley of Massachusetts, who led the floor debate for the Democrats. “This is not the right time to debate a tax bill.” He suggested the numbers don’t add up, that we don’t know if we can “afford” it. It will “cost” billions of dollars. How can we do this when “schools are crumbling” and “prescription drugs” are expensive? “Those tax cuts are 13 times larger than all of President Bush’s education proposals.”

Mr. Moakley of course was the first and only congressman recognized on the floor by the new president last week in his address to Congress. Mr. Bush praised the leukemia-stricken Mr. Moakley at length, lauded his career and dedicated an increase in the budget of the National Institutes of Health to him.

A big bipartisan moment. Today Mr. Moakley responded, by bashing Bush on budget balance. But this wasn’t indicative of a lack of grace. It was appropriate. Mr. Moakley disagrees with Mr. Bush. By his lights he was doing the right thing and taking the right stand. That’s his job.

Still, Mr. Moakley’s remarks were an illustration of how things have changed, how the Democrats have embraced the role of furrow-browed accountant and Republicans seized the role of defender of the people.

FDR and Truman would turn in their graves. Ronald Reagan would laugh with delight and see it as his final victory in the remaking of a party.