May 20, 2011 10:30 pm

Surpluses not sacrifice still sway US politics

The establishment has not changed to reflect the new post-crash mood

Republicans have excuses for losing a by-election this week in the most conservative congressional district in New York, one they had held for 58 years. Their incumbent, a married man, resigned last winter after sending photos of his bare torso to a woman he’d met on the internet. Upstate New York is as economically depressed as any state in the union, and yet Republicans there nominated, as they often do, a plutocrat. Jane Corwin, heiress to a phonebook fortune, has about $100m in the bank. Meanwhile, a Democratic multimillionaire styling himself a “Tea Party” candidate split the Republican vote. A staffer to Ms Corwin ambushed this fellow in a parking lot and started a slapping match that he foolishly thought would redound to his boss’s credit. None of that will be repeated in the next election.

But one thing will. Democrats pointed to the budget released in April by Paul Ryan, House budget committee chairman, as evidence that Republicans want to destroy Medicare, the beloved health plan for the aged – and the public believed them. This is a challenge for Republicans. It is a potential catastrophe for the US. The country has lately been running budget deficits upwards of 10 per cent of gross domestic product and its debt stands at $14,300bn. For the US to have any hope of re-establishing fiscal order, both parties must stick to the unpopular part of their agendas. Democrats must insist on hiking taxes, Republicans on cutting benefits, and a negotiated compromise must result in a bit of both. If Republicans think they will be crushed at the ballot box for even suggesting cuts, the chances of serious reform worsen.

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Christopher Caldwell

The Ryan budget does not exactly destroy Medicare. Anyone who really wanted to do that could sit back and let demographics and maths do their work. But the plan does lop $6,000bn from the budget over the next decade. It takes a single-player health plan and turns it into a programme of insurance-premium support. When the debate over a valuable benefit is framed this way – as a choice between a) having it and b) losing it – the cutters cannot win. Republican consultant Karl Rove has called for a “political war college” to teach Republicans to speak more intelligently about the Ryan plan, to frame it as an attempt to rescue, not wreck, Medicare.

Mr Rove’s arguments resonate. Democrats, who control the Senate, pressed their advantage this week by voting down Mr Ryan’s budget on a mostly party-line vote of 57-40. But they also rejected Mr Obama’s budget, which has only token spending cuts in it, and did so unanimously. Even worse than the wrong reform, apparently, is no reform at all. Consider the new Washington Post poll regarding the debt ceiling, which Congress must vote to raise this summer if the US is to keep borrowing. Americans fear raising the ceiling will incite politicians to spend, more than they fear not raising it will lead to a default.

The establishment has not changed to reflect this post-crash mood. Almost all of today’s leaders are yesterday’s men. Their main skill is divvying up surpluses, not rallying people around sacrifice. That includes Barack Obama, whose legislative priorities seem to have arrived on his desk in a time capsule dated 1971. But he benefits from the majesty (or the inertia) of incumbency and Republicans thus far have no one to match him.

Only two people on the Republican side can make a serious case that they are more relevant to the moment than Mr Obama. There is the fat, blunt, union-busting New Jersey governor Chris Christie, who has said he will not run for president. And there is Mr Ryan himself – a level-headed and kindly man who represents a pro-Obama district. Now, if you press Mr Ryan hard enough, you can hear a lot of 1980s supply-side thinking coming out of him, of the kind the public distrusts. Democrats’ main priority for the past two months has been to expose this side of him. In fact, Democrats have focused on discrediting Mr Ryan’s reforms since late 2009. They see clearly, even if his fellow Republicans do not, that he is the logical, cometh-the-hour, cometh-the-man candidate for 2012. It would be cowardly of Republicans to nominate anyone else.

The New York by-election shows that the next election will be fought on debt and Medicare. Each party has a programme that could easily be implemented if it controlled the presidency and both houses of Congress. Democrats want tax hikes to fund existing programmes. Republicans want service cuts to fit existing tax levels. What is nowhere on the horizon, however, is a solution that can be put into place by a divided government of the sort that Americans have tended to elect in recent decades. Unless one party manages to sweep the next elections, the US debt crisis will probably get solved not in Washington but in the markets.

The writer is a senior editor at The Weekly Standard

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