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Spent Force

Here’s a brief timeline of post-Katrina developments within the conservative movement: On September 15, President Bush gave a speech from New Orleans in which he pledged to spend “what it takes” to rebuild the Gulf Coast. Conservative commentators promptly worked themselves into a lather over what could be the largest domestic spending increase since the Great Society. House conservatives readied an initiative called “operation offsets,” the point of which was to demand some$500 billion in spending cuts to pay for the new Katrina outlays.

That was a Thursday. On the following Tuesday, the House Republican leadership informed the conservative dissidents that “operation offsets” was more or less off. Top Republicans were particularly uncharitable to the centerpiece of the conservative proposal, which was to save about $30 billion by delaying the implementation of Bush’s signature prescription- drug plan. Tom DeLay pronounced the idea a “nonstarter.” Bush was reportedly as opposed to delaying the drug plan as he is to repealing his tax cuts.

On the level of substance, of course, the conservatives were onto something. The country’s finances were unsustainable even before Katrina—there’s no way to cut taxes by several trillion dollars while creating a trillion-dollar prescription-drug entitlement without eventually collapsing the economy. But, politically, they couldn’t be further off base. Conservatives believe the whole point of tax cuts is to give Republicans leverage to reduce spending and shrink government. What they don’t realize is that the only way for the GOP to remain the majority party is for it to constantly dole out both generous tax cuts and generous spending.

The source of the dilemma is the Republicans’ increasingly Rube-Goldberg coalition. On the one hand, Republicans are highly dependent on money from corporations, which see tax cuts as the be all and end all of public policy. That wasn’t such a problem in the 1980s, when Republicans could avoid ramping up domestic spending, even if they never quite got around to cutting it. The reason that was politically possible is that the vast majority of the party’s constituents in those days were relatively affluent—Ronald Reagan carried 17 of the 20 most affluent counties in the country in 1984. These voters worried that an expansion of government programs would involve a redistribution of money from them to the poor and working class, and so they never really clamored for it.

What’s changed since the ‘80s is that a smaller and smaller portion of the party’s votes come from affluent voters, even as its funding continues to come from the business community. Bush won less than half of the 20 most affluent counties in 2004. These days, GOP votes come increasingly from working-class whites. Bill Clinton lost lower-middle-class whites—those making between $30,000 and $50,000—to Bob Dole by a single point in 1996. Bush won them by 13 points in 2000 and by 17 points in 2004. The upshot is that, while the party must still deliver tax cuts that primarily benefit the affluent, it must also spend lavishly to appeal to the working class. With Democrats willing to expand entitlements, there isn’t a reliable way to win these voters without responding in kind.

That’s not the whole story, of course. Part of the way Bush has made inroads among the working class is by highlighting his religiosity and cultural issues like abortion, gun control, and gay marriage. Foreign policy has also loomed large since September 11. All of these issues have attracted working-class whites even as they repelled affluent professionals, who have become a core Democratic constituency. But an equally big part of Bush’s appeal was his promise to shower working-class people with goodies. In 2000, Bush vowed on the campaign trail to subsidize parenthood with a generous child tax credit. He promised to spend billions of dollars on education. And, most unusually for a Republican, he promised a prescription-drug bill that looked and smelled—and cost nearly as much as—the Democratic alternative (even if it ended up funneling most of its benefits to pharmaceutical companies). Bush largely delivered during his first term. So it’s no surprise that, in 2004, he didn’t just win over the working-class on national security grounds. He carried it by 16 points on the economy.

Thus far, Republicans have managed to finesse the pressures that arise when you have to appeal to both working-class voters and business interests. During his first term, for example, Bush threaded the needle on trade—first imposing tariffs that benefited Rust Belt steelworkers, then reversing himself once the outcry from other industries got too loud. When it came to the budget, Republicans have found that the most reliable way to strike this balance is to cut programs for the poor—like Medicaid and low-income housing—which neither group relies on.

Obviously, cutting spending for the poor isn’t exactly the most politically viable place to look for savings these days. (Around the same time the House was beating back its conservative insurgency, the Senate was approving a $9 billion increase in Medicaid spending for victims of the hurricane.) But, even if it were, there’s only so much you could cut. Medicaid spends only about half of what Medicare does, making the latter a far bigger factor in today’s outsized deficits. (Medicare benefits everyone, not just the poor.) Eventually, the contradictions involved in cutting taxes while raising middle-class spending become inescapable.

Worse, the demographic trends underlying this problem make it nearly impossible to mitigate, much less resolve. According to the Pew Research Center, so-called “big government conservatives”— downscale whites broadly sympathetic to government spending, even if it means running a deficit—account for roughly one-third of the Republican base and about one-fifth of the votes Bush won last fall. That means there’s no GOP majority without them. There aren’t enough deficit hawks to form a viable coalition now that affluent moderates are Democrats.

In a recent anti-Bush rant in The Wall Street Journal, former Reagan speechwriter Peggy Noonan wondered, “If we are going to spend like the romantics and operators of Lyndon Johnson’s Great Society; if we are going to thereby change the very meaning and nature of conservatism ... shouldn’t we perhaps at least discuss it?” Conservatives can discuss it all they want. But it’s far too late to do anything about it.

This article originally ran in the October 10, 2005 issue of the magazine.