Democrats Need an Anti-Austerity Message

It’s a simple truth: Republicans explode the deficit when they’re in power. But, as soon as they’re out of power, they demand austerity—while painting Democrats as wasteful socialists who trade handouts for votes. 

That’s been pretty much a given for a generation now, but have Democrats come up with an answer? Barack Obama spent his entire presidency wrangling with Republican demands for drastic cuts to the social safety net and reductions in the federal deficit—despite the fact that the country was still recovering from a serious recession. Democrats got no credit for the spending cuts or deficit reduction, but when the recovery was slower than hoped for, and left some sectors behind, they sure got the blame. Today, despite the fact that President Trump’s legislative legacy consists of one deficit-compounding tax cut for corporations and the wealthy, Republicans are planning a 2020 campaign aimed at convincing voters that their opponents are socialists who can’t be trusted to hold the keys to the economy—a smear they will no doubt continue if a Democrat prevails.  

The current spate of Democratic contenders—with the possible exception of Joe Biden, whose dog ate his homework—are proposing a set of programs, most notably the Green New Deal and Medicare for All, that could surpass Obama-era proposals in their scope and, yes, cost. To date, discussion of those programs has focused on the details (when they exist), or on how these plans will get through a Republican Senate (even if Democrats regain control, given the existence of the filibuster). But winning these battles will also require Democrats to win the battle for public opinion—and, winning that could require Democrats to defang Republicans’ wholly predictable and wholly hypocritical demands for austerity. A Democratic president might well take office in 2021 with what politicians and political observers like to call political capital, but he or she will have to spend that capital not only selling expansive reforms to the country, but also on fighting deficit-hawking Republican demands to cut spending.

During Obama’s presidency, Republicans consistently sabotaged the economic recovery. By the time that Obama had taken office, the entire Republican Party had turned against Keynesian “pump priming” and instead began whipping the country into a debt-obsessed hysteria. Despite Obama’s apparent nod to the GOP of keeping the total 2009 stimulus bill below $1 trillion, it received zero Republican votes. Over the next two years, Republicans used that stimulus—and the Democratic debate over increasing healthcare access—as the centerpiece of a campaign about restoring fiscal seriousness to Washington, ultimately winning in a landslide during the 2010 midterms. 

In August of 2011, President Obama signed the Budget Control Act. It was as part of a deal to end a crisis Republicans manufactured the month before when they threatened to shut down the government if Democrats did not agree to future spending cuts. The law mandated sequestration and imposed strict fiscal controls at a moment when the economy still needed economic stimulus. Sequestration, which capped the discretionary portions of the federal budgets, further slowed the recovery and constrained the Obama administration’s ability to influence the economy. “The recovery since 2009 has been historically slow, and the disappointing pace can be explained almost entirely by the fiscal austerity imposed by the Republicans in Congress,” the Economic Policy Institute’s Josh Bivens said in 2016. “To be blunt, if public spending since the Great Recession had followed the path it took during the recovery presided over by Ronald Reagan in the early 1980s, the U.S. economy would have been fully healed for years now.”

But, after hobbling the recovery during the Obama years, Republicans abandoned their austerity-loving ways as soon as they assumed control of a unified federal government in the wake of Trump’s surprise 2016 victory. It’s a bait-and-switch they’ve been pulling since the Reagan years. The “party of fiscal responsibility” has reliably driven up the deficit whenever they’ve held power over the past four decades.

“Once a Republican held the White House, Republicans simply abandoned the whole idea that sequestration, or anything at all, needed to be paid for,” wrote New York’s Jonathan Chait last year. “They have happily reverted to the Bush-era practice of putting everything on the national credit card.” The recovery that began in the Obama years has continued under Trump—one could argue the economy has even thrived. But how much of the continued expansion and modest job growth has come thanks to the rocket fuel Trump has poured on the fire in the form of a $1.5 trillion tax cut coupled with—crucially—the end of austerity? After years of spending cuts and tax increases (in the form of allowing some of the Bush tax cuts to expire) under Obama, Republicans cut taxes and approved $300 billion in new spending. As Paul Krugman pointed out on Twitter over the weekend, the end of austerity has played a significant and under-appreciated role in the booming economy: 

Republicans will try to flip the script yet again if Democrats retake power in 2021, demanding spending cuts to reduce the deficit that they fattened with handouts to the rich. “How can we pay for a Green New Deal when our deficit is so high?” Kevin McCarthy will bleat at Chuck Todd in a future episode of Meet The Press. “Instead of spending increases, we should be tightening our belt”—presumably by cutting social spending.

In the past, Democrats have, in typically bewildering fashion, accepted this as a good-faith critique, helping to cement the GOP’s image as a beacon of fiscal seriousness. They have nodded respectfully when Republicans have demanded spending cuts and have shackled themselves with nonsensical policies like PAYGO—which would require any legislation that increases spending or cuts taxes to be offset by either spending cuts or tax increases—a rule that would make many of the ambitious policies currently percolating within the party impossible to enact. And Democrats have done all this without receiving any quantifiable political benefits—Republicans consistently reject Democratic proposals that could reduce the deficit (like parts of Obamacare) while touting the GOP’s fiscal “discipline.”

The political strategy to fight back against the austerity narrative could involve attacking Republican deficit hypocrisy, but that risks further legitimizing the idea that all deficit spending is bad. At a time when Democrats should be proposing large-scale social programs, they could instead go on the offensive, lambasting Republican spending priorities, which, in the case of the ridiculously named Tax Cut and Jobs Act of 2017, consists of giving free cash to rich people.

Going on the offensive about what austerity means for people would not only make for smart economics, it makes for smart politics. In this context, British Labour leader Jeremy Corbyn offers a way forward. He has consistently used the austerity imposed by the U.K.’s conservative government as a wedge, highlighting the effects budget cuts have on ordinary people.

Take last fall: “Today is World Mental Health Day, and today there are 5,000 fewer mental health nurses than there were in 2010,” said Corbyn. “The prime minister said last week that austerity is over. When will austerity be over for the mental health services?” 

It’s a smart frame that Democrats can easily adapt to U.S. struggles. They already make a version of this argument whenever Social Security and Medicare are threatened, but this argument also can be used to highlight the inequity that has deepened under Trump—and how austerity increases economic inequality and hampers growth.

Of course, the game could change by 2021. Ten years is a long time to go without a recession, and it’s hard to imagine a Trump administration nimble enough to dodge the next one. If or when it comes, weakened dollars to stale doughnuts, Republicans will once again insist on smaller stimulus and bigger spending cuts. Democrats have been fooled more than twice by this con—will they recognize the con this time?