The GOP's Real Challenge

Even after the expected electoral victory, Republicans face a serious political predicament.

Despite the Republican Party’s current optimism over its political chances in the upcoming midterm election, the recent release by the Treasury Department of the latest national debt figures may portend unforeseen problems for the party’s future electoral prospects. While Democrats may be held accountable by voters in November for our fiscal nightmare, Republicans may actually be the ones to suffer the longer-term effects.

The Treasury Department’s report shows the national debt has increased by $3 trillion over the two years of the Obama presidency, raising the nation’s new overall debt total to $13.655 trillion. At the current rate of spending, the total debt accumulated by the end of Obama’s first term will be $5.9 trillion, compared to the $4.9 trillion accumulated over the entire eight years of the Bush administration.

While it can certainly be argued that both political parties share a degree of blame in this economic calamity, their level of complicity is highly different. The Bush administration and its congressional Republican counterparts were certainly profligate spenders, greatly increasing expenditures on such things as education and anti-poverty programs, as well as enacting a huge Medicare drug entitlement, with nary a nod toward balancing a budget. Republicans, of course, paid a heavy political price for these reckless spending habits, losing control of both the House and Senate in 2006.

However, the collapse of the financial markets at the end of 2008 saw the Bush administration and a Democratically-controlled Congress join hands and produce both a series of bailouts and a stimulus package that totaled in excess of $1.25 trillion, exploding the federal deficit from $565 billion in fiscal year 2008 to $1.41 trillion in 2009. In the process, the national debt rose to $10 trillion.

While the debt issue was no doubt severe, the entrance of Barack Obama onto the scene, coupled with unchecked Democratic power, inflamed the situation with a mix of tax and spend policies, beginning with a second $700 billion stimulus program in early 2009 and ending with a $1 trillion healthcare reform entitlement in 2010. The result of these and other measures brought budget deficits of $1.56 trillion in 2010; $1.27 trillion in 2011; and a projected 2012 national debt of $16.5 trillion.

The problem for Democrats is that until 2008, concerns over budget deficits and the national debt were generally reserved for fiscal hawks, not for the general populace. These were issues whose consequences could be masked in good economic times and easily kicked down the road for future generations to handle.

Concerns about runaway federal spending, however, now have the rapt attention of the public because the tab for these policies has come due amidst a severe economic downturn, heightening voter unease about the effects that massive public debt will have on both their immediate and future financial prospects.

Unfortunately, easing these voter concerns entails addressing the runaway costs of federal entitlement programs and their impact on the national debt. Understanding this relationship can best be illustrated through the Holy Trinity of mandatory entitlements: Social Security, Medicare, and Medicaid.

These programs, which are regulated outside the normal budgeting process, account for up to 41% of all current federal spending, with a projected increase to 62% by the end of the decade. Not included in these figures is the huge anticipated costs attached to the recently passed healthcare reform entitlement.

These programs have become fiscally unsustainable because their enormous cost neatly dovetails alongside a shrinking revenue base. While an increasing number of retiring Baby Boomers, combined with a low national birthrate, has become contributing factors in explaining the diminished tax base, the most glaring culprit can be found in the over 132 million Americans who do not pay income taxes, a figure which equates to almost 43% of the nation’s population. Further compounding the problem is the added fact that nearly 64 million Americans are now dependent for their daily sustenance from government programs.

The Democratic solution to this revenue problem is predictable. Public patience toward tax-and-spend policies seems to have run its course and has opened the door for the GOP to gain handsomely from voter gravitation toward budgetary frugality.

For Republicans, unfortunately, this presents a nasty conundrum in the effort to slay the national debt dragon: which government programs does one slash when nearly two-thirds of Americans are dependent on some type of federal assistance? Put more succinctly: whose ox gets gored in the pursuit of budgetary sanity?

The political challenge the GOP faces is that it will be charged by its anticipated 2010 electoral victory with squaring that nut without tearing apart its new-found political alliance. While the Tea Party has many diverse components, from social conservatives to strict constitutionalists, its underlying commitment to monetary temperance has extended its reach to include large numbers of conservative Democrats and independents.

It’s an uneasy coalition, top heavy with members intolerant with the politics of inaction. Dissatisfied by Republican efforts to effectively reduce the national debt, they might not balk at splintering off and forming a third party, or worse, returning back to a potentially chastened Democratic Party that has been forced back to the center by an electoral drubbing. For the Republican Party, how it rises to this challenge will determine if the 2010 election winds up being nothing more than a pyrrhic victory.

Frank Crimi is a freelance writer living in San Diego, California. You can read more of Frank's work at his blog, or contact him at [email protected]