Many figures in both politics and the press suffer from a malady some liberals have taken to calling “Broderism,”[2] which causes them to mourn the passing of bipartisanship but to speak as if the inability of today’s politicians to get along is the result of mysterious character flaws. There’s no question that some of our leading politicians have character flaws in abundance—Clinton had his problems, and Gingrich, who was carrying on his own affair with a subordinate even as he denounced Clinton’s immorality, displayed a combination of grandiosity and hypocrisy rare even among politicians. But policy, not personalities, is the reason politics has become so bitter and partisan.
The great age of bipartisanship wasn’t a reflection of the gentlemanly character of an earlier generation of politicians. Rather, it reflected the subdued nature of political conflict in an era when the parties weren’t that far apart on basic issues. After the 1948 election Republicans decided that the achievements of the New Deal couldn’t be reversed, and stopped trying, while Democrats, who had made a revolution in the thirties and forties, settled down to a program of incremental reform. The result was a generation-long era of muted partisanship. That era ended, and bitter partisanship reemerged, when the Republicans changed their minds a second time. The reason there’s so much hatred between the parties today is that beginning in the 1970s the GOP became, once again, a party defined by its opposition to taxes on the rich and benefits for the poor and middle class, and willing to do whatever it takes to promote that agenda.
Understanding the nature of the partisan divide is one thing; understanding its causes is another. In fact the rightward march of the Republican Party poses two great puzzles: First, why would one of America’s two great political parties launch a crusade to dismantle the welfare state in an era of rapidly rising inequality, an era in which taxing the rich to pay for middle-and lower-class benefits should have become more popular, not less? Second, why has the Republican Party been able to win so many elections, despite its antipopulist economic agenda?
In this chapter I’ll try to resolve the first of these puzzles, reserving the second question for the next chapter. Before I get there, however, let me deal with a common objection: the claim that whatever they may say, the parties aren’t very different in what they do.
During the 2000 campaign Ralph Nader mocked politicians from the two major parties as “Republicrats,” indistinguishable representatives of moneyed interests. Even in that election, when George W. Bush somehow got the press to describe him as a moderate, most Americans disagreed, and at this point the vast majority of Americans view the parties as being very different indeed. Still, how the parties are perceived may not be a good guide to what they actually do. Are they really all that different?
When Nader first became prominent in the sixties, the parties really were as similar as he says. Up to the mid-1970s the parties were hard to distinguish in many ways: John F. Kennedy cut taxes, Richard Nixon raised them, and the votes on major pieces of legislation often involved significant crossing of party lines in both directions. For example, an important part of the support for the 1965 legislation that created Medicare and Medicaid came from Republicans, while significant opposition came from Democrats. In the final House vote, seventy Republicans voted yea, while forty-seven Democrats voted nay. But that was another political era.
To see how much things have changed, consider one easily measurable indicator of partisan differences: tax policy, especially tax policy toward the wealthy. Reagan, Clinton, and George W. Bush each started his administration with a major change in tax policy. Reagan and Bush reduced taxes on the rich; Clinton raised them.
Specifically, Reagan began his term with a sharp reduction in personal income tax rates, and a sharp cut in the effective tax rate on corporate profits. Both of these measures delivered disproportionately large benefits to upper-income households, which paid a much higher income tax rate to start with, and also owned most of the stocks that benefited from lower corporate taxes. By contrast Clinton raised the income tax rate on the highest bracket, while eliminating the upper limit on the Medicare payroll tax—mainly hitting the same elite group that was the prime beneficiary of the Reagan tax cuts. Bush cut taxes twice, in 2001 and 2003, exploiting the brief illusion of success in Iraq to push through the second round of cuts. The first cut sharply reduced the top income tax rate and phased out the estate tax, which falls only on the wealthy, while the second reduced taxes on dividends and capital gains, again mainly benefiting the highest-income Americans.
Table 6 shows the actual effective tax rate paid by the top 1 percent of the population—that is, the percentage of income people in that group (which currently corresponds to incomes of approximately $425,000 a year or more) actually paid in taxes—for selected years. Sure enough, the rich gained a lot under Reagan and Bush II, while losing a lot under Clinton. (In both the Reagan and Clinton years the initial changes in tax policy were eroded over time, as each president had to deal with a Congress controlled by the opposition party, but the point stands.)
| Table 6. Average Federal Tax Rates on the Top 1 Percent | |
|---|---|
| 1980 | 34.6 |
| 1982 | 27.7 |
| 1992 | 30.6 |
| 1994 | 35.8 |
| 2000 | 33.0 |
| 2004 | 31.1 |
Source: Congressional Budget Office, “Historical Federal Effective Tax Rates,” http://www.cbo.gov/ftpdoc.cfm?index=7718&type=1.
For the most part these tax changes passed on near-party-line votes. The Clinton-Gore tax increase of 1993 passed the House without a single Republican vote; the Bush tax cut of 2003 passed the House with only one Republican voting against, and only seven Democrats voting in favor. The 2005 Gasoline for America’s Security Act—basically a set of tax breaks for oil companies—passed by a one-vote margin, with only thirteen Republicans voting no and not a single Democrat in favor.
The record on spending can seem less clear-cut, but that’s only because the parties have been less able to implement their agendas.
Reagan initially tried to make deep cuts in Social Security, only to abandon the attempt in the face of overwhelming congressional and public reaction. Reagan did, however, manage to push through new rules that reduced benefits under the food stamp program, Aid to Families with Dependent Children, and unemployment insurance. Clinton famously tried to introduce a form of universal health care—and completely failed. He did, however, preside over a substantial increase in the Earned Income Tax Credit, which raises the incomes of low- wage workers.
