Fiscal Cliff: GOP May Take a Hit, But At Least it Won't Abandon Principle

Is the GOP in crisis? No. Every organization occasionally needs to rethink and update. But despite the doom and gloom from pundits who do not wish it well and want it to “evolve” out of existence, the Republican Party will be fine if it holds on to its core principles of liberty and limited government and realizes that they remain burningly relevant in today’s world.

I recently wrote I thought the GOP should agree to higher tax rates on top earners in order to avoid going over the fiscal cliff. I argued the GOP should hold out for spending concessions, although I cautioned I thought it had a weaker hand because President Obama can go over the cliff and reap political benefit. The public, it is clear, will blame Republicans more than Democrats if hundreds of billions of dollars in automatic tax increases take place.

What I did not anticipate was the lengths to which President Obama would go to humiliate Speaker John Boehner (R-Ohio) and fellow Republicans.

It’s simply amazing the following exchange hasn’t gotten more play: In a recent meeting in the Oval Office Boehner asked the president, “I just put $800 billion [in tax revenue] on the table. What do I get for that?” To which the President responded, “You get nothing. I get that for free.”

Disturbing? That’s one word that comes to mind.

When combined with the president’s unwillingness to consider serious spending cuts (his 2013 budget cuts spending by less than $25 billion), not to mention the most incremental of entitlement reforms, his negotiating strategy becomes apparent for what it is: a deliberate attempt to humiliate the opposition.

In that context, Republicans in the House are absolutely right to demand (at least) that every dollar in extra revenue be offset by a dollar in spending cuts.

President Obama and Paul Krugman may believe that deficits don’t matter and that Keynes is king, but anyone who has ever read the far more insightful Hayek or von Mises knows that’s simply not the case.

President Reagan got the country out of a recession using precisely the opposite strategy Obama obstinately clings to: He had Chairman of the Federal Reserve Paul Volcker tamp down on inflation, instead of printing money and pursuing policies that could lead to serious inflation down the road.

So will the Republicans take a hit if (or when) we go off the cliff? Yes. Is the failure of Speaker Boehner's Plan B a pragmatic approach? No. But the GOP, and specifically its Tea Party contingent, can take comfort in the knowledge that it is standing by principle. Running a deficit that exceeds $1 trillion for the fourth year in a row and is still in 10%-of-GDP-range is not a matter of value-neutral economics. In addition to being unsustainable, it is the grave moral failure of intergenerational theft, i.e. stealing our children’s future.

The GOP will not cease to exist if we go over the cliff. Conservatism was supposed to be over in 2008, and then 2010 happened. The same voices who said conservatism was dead in ’08 are now brimming over with helpful suggestions for how the GOP can “reform.” It should cease to be a pro-life party, agree to judicial redefinition of marriage in all 50 states, and accede to immigration policy based not on national interest but a religion of human rights. None of these things is true.

There is an argument to be made – and the likes of Ramesh Ponnuru and writers at the American Conservative have made it – that we need to temper Tea Party reliance on Locke with other thinkers in the conservative tradition who emphasized community in addition to the individual. That may be. Perhaps we should go back to Burke, re-read Russell Kirk, or even reconsider Richard Weaver. But that project has very little to do with the cliff and the putative “crisis” the GOP finds itself in. At the moment the GOP needs to deal with that cliff. There is enough trouble for today. If the Republican Party sticks to its principles and remembers that good policy is good politics, it can be confident that tomorrow will – successfully – care for itself.