Debates about taxes and spending in America are fought on two levels, the ideological and the pragmatic. The first gets far more attention, but the second reflects an equally important feature of the American character.
At the ideological level, Americans distrust government, worry when they think it’s growing too big and believe that it produces all sorts of “waste, fraud and abuse” that could easily be eliminated.
Today, the ideological side is playing out at the federal level through the Tea Party movement, the more generalized public unease over government’s growth under President Obama and a Democrat-run Congress, the political problems of congressional incumbents, and polls showing trust in the federal government at historic lows.
We have seen it before. Energized by their historic victory in the 1994 mid-term elections, which they viewed as a popular rebuke to President Clinton’s supposed far left-ism, congressional Republicans in 1995 proposed a seven-year plan to balance the budget while dramatically cutting taxes across the board.
But what happened next (and what is happening today in the states) speaks to the pragmatic side of Americans.
Clinton focused attention on the particulars behind the GOP’s small-government promise. Yes, he said, Republicans would balance the budget, but they would do so by dramatically cutting Medicare and Medicaid, cutting funds for education and environmental protection and raising taxes on working-class Americans.
When Republicans pushed their agenda to the brink, shutting down most federal agencies by refusing to fund them, the public recoiled from the temporary loss of public benefits and services, such as national parks and Superfund clean-ups. Americans rallied behind Clinton and Republicans were forced to retreat.
What policymakers learned was that details matter. Yes, Americans like the concept of a smaller government. But, when faced with the choice between smaller government and fewer key services, on the one hand, and a larger government with those services, on the other, they would likely opt for the latter.
That’s the lesson that policymakers are re-learning today in the states, where governors and legislators struggle to meet their balanced-budget requirements amid soaring state budget deficits.
From Albany to Sacramento, Austin to Augusta, state lawmakers and voters in recent months have raised taxes and rejected proposals to impose annual tax and spending limitations. The record suggests that, rather than being fire-breathing anti-government zealots, Americans are thoughtful and pragmatic.
Last week, voters in Arizona approved a three-year, one-cent increase in sales taxes, one promoted by Republican Gov. Jan Brewer (better known for her tough stance on immigration) to prevent sharp cuts in education and other services. Moreover, the vote wasn’t even close. With 88 percent of precincts counted, the New York Times reported that the proposal had won the support of 64 percent of voters.
That’s no isolated case. In January, voters in Oregon rejected proposals to roll back increases in state personal and corporate taxes.
State lawmakers are acting similarly. More than 30 states have raised taxes since the recession began in late 2007 in order to prevent deeper cuts that would be needed in health, education, and law enforcement programs to balance state budgets, the Center on Budget and Policy Priorities reports.
Meanwhile, voters have consistently rejected the seemingly appealing notion of limiting annual state-wide tax and spending increases. Many of these have come in the form of so-called “Taxpayer Bill of Rights” (TABOR) measures.
Most recently, voters in Maine and Washington rejected TABOR proposals in November. But the longer term record is far more striking. Anti-government forces have launched TABOR efforts in 20 states since 2004 and, despite the obvious political appeal of a tax or spending limit, voters have rejected every single one of them.
What are we to make of all this?
Yes, voters are skeptical about government. Given a choice between large or small government in the abstract, they will probably opt for the latter. Nor have voters, even at the state level, become happy tax raisers.
Nevertheless, anti-government fever only goes so far. It often stops at the point where voters begin to understand what’s at stake.