“The Calculus of Consent” is the title of a famous modern book in political economy by Nobel Prize winner James Buchanan and Gordon Tullock (who deserved to share the prize with Buchanan in many people’s opinion), but I want to use the phrase in a different way to reflect on two news stories from today. First, on the Fox News Sunday panel roundtable this morning (not yet available online, but watch for it on Hulu.com), Bill Kristol got into his weekly tussle with Juan Williams about Obamacare, with Kristol confidently predicting that it will be repealed outright after Republicans take the White House and a Senate majority next year. This led to a dustup over who is most fervent about the issue, conservatives who hate Obamacare, or liberals who support it.
Brit Hume intervened with the sensible point that Obama and the Democrats made a huge error in insisting on passing Obamacare on a party-line basis, rather than gathering some Republicans through compromise. The TV format didn’t allow for a proper discussion of this point, so let me extend Hume’s remark, which touches on something central to American politics. Since we don’t have a parliamentary system, what I am calling Hayward’s First Postulate of American Politics comes into play: major social policy changes can only be implemented if they have the consent–not the agreement, just the consent–of the minority party. As has often been pointed out, nearly every major social policy change of the last 100 years passed on with some measure of bipartisan support. Social Security, Medicare, Medicaid, the Fair Housing Act–all of these had substantial Republican support. In the case of the 1964 Civil Rights Act, Republicans voted in favor in a larger proportion of their total numbers in the House and Senate than Democrats did. Reagan’s first tax cut bill passed the Senate 89-11, and the House with something like 40 Democratic votes, despite Democratic leadership attempts to whip their members into line against Reagan. I’m sure many of the Democrats who voted for Reagan’s tax cut didn’t agree with it fully or like it especially much, but they consented to it because they recognized the public consensus behind allowing Reagan a chance to govern. The 1986 Tax Reform Act passed on a truly bipartisan basis. Obama was simply oblivious to the meaning of the Tea Party and related signs that the American people simply did not wish to consent to his health care bill, that there was no consensus for his health care policy. This is why Kristol is sure to be right: Obamacare is going to be dismantled if not repealed outright. (Some other day I’ll dilate why the relentless use of waivers for the law reveals the arbitrary character of the administrative state.)
However, while conservatives may feel some confidence at having the upper hand in the long-term struggle to place Obamacare in the course of ultimate extinction, the problem of practical consent is a two-way street. The second story today that caught my eye is Gregory Mankiw’s New York Times business section column that takes the form of a hypothetical presidential speech in the year 2026, explaining to Americans the draconian austerity measures the country will now have to endure because of its failure in the previous decades (as in now) to get its fiscal house in order:
We have to cut Social Security immediately, especially for higher-income beneficiaries. Social Security will still keep the elderly out of poverty, but just barely.
We have to limit Medicare and Medicaid. These programs will still provide basic health care, but they will no longer cover many expensive treatments. Individuals will have to pay for these treatments on their own or, sadly, do without.
We have to cut health insurance subsidies to middle-income families. Health insurance will be less a right of citizenship and more a personal responsibility.
We have to eliminate inessential government functions, like subsidies for farming, ethanol production, public broadcasting, energy conservation and trade promotion.
We will raise taxes on all but the poorest Americans. We will do this primarily by broadening the tax base, eliminating deductions for mortgage interest and state and local taxes. Employer-provided health insurance will hereafter be taxable compensation.
We will increase the gasoline tax by $2 a gallon. This will not only increase revenue, but will also address various social ills, from global climate change to local traffic congestion.
If only we had faced up to this problem a generation ago. The choices then would not have been easy, but they would have been less draconian than the sudden, nonnegotiable demands we now face. Americans would have come to rely less on government and more on themselves, and so would be better prepared today.
Just to rub it in, Mankiw’s fictional president says these terms were dictated to him on his trip to get a bailout from the IMF, now based in . . . Beijing.
So here’s where the problem of consent comes in. Hayward’s First Corollary to the First Postulate is that Democrats cannot fix health care without the consent of Republicans, and Republicans cannot fix Social Security or other entitlements without the consent of Democrats. Democrats have signaled already (vz. Harry Reid) that they simply will not discuss Social Security. We all know the Democrats have become a deeply irresponsible party, but I can see from their point of view that agreeing to any entitlement compromise will split their party apart, since they have so little to offer their voters aside from entitlements. But a similar hazard faces Republicans: any compromise on taxes or maybe even means-testing to pay for entitlements risks angering the Tea Party which presently form the nucleus of energy in the GOP.
Mankiw’s column left me profoundly depressed, as it seems likely to me that someday we’re going to come to the pass he lays out here. I’m trying to think of an example of a modern nation that has been able to stave off fiscal catastrophe without the kind of crisis he describes. Maybe Canada in the 1990s, New Zealand in the late 1980s (righted by a Labour government, I might add), or Britain under Thatcher are possible candidates. Of course, all these countries have in common parliamentary government where a determined party can govern on a party-line basis if they choose. It is harder to make that work here for reasons Buchanan and Tullock describe in their classic book, and for my adaptation of the idea of consent outlined here. I wish Speaker Boehner and the House Republicans well in the budget fight that is about to commence in earnest, and we should support them as much as we can. But I hope we can also remember that the country can’t be governed from one house of Congress.