THE BLOG

Three Ways Democrats Could Choose to Lose in 2012, and What They Can Do to Avoid It

06/26/2011 08:41 pm ET | Updated Aug 26, 2011

Democrats have always found creative ways to snatch defeat from the jaws of victory, so the title of this piece may unfairly limit the possibilities. And they could win or lose this time for a range of reasons that are largely or entirely out of their control, most importantly who the Republicans nominate for President and whether the economy continues to falter or regains steam.

But there are three ways Democrats could choose to lose, and they are threatening to do all three now. Hopefully they will change their minds before they commit to campaigning for the GOP.

The first is to take seriously that the Republican leadership has any real interest in cutting the deficit or the national debt. If the deficits Republicans racked up under Ronald Reagan didn't disabuse Democrats of the idea that Republicans care about deficits, surely the near doubling of the national debt under George W. Bush and a Republican Congress should have. Grover Norquist and others could not have been more explicit about the conservative position on debt: make it is big as you can when you're in office, with tax giveaways to all your friends, and you'll tie the hands of Democrats when they take control, at which point you start the shrill screaming again about fiscal responsibility and "entitlement" spending. (Meeting obligations to our seniors, educating our children, and taking care of people who need help are "entitlements," whereas cutting taxes to those who least need it somehow doesn't fall under that rubric -- a term and concept Democrats should stop echoing.)

Republicans didn't care one whit when they waged a trillion-dollar unfunded war in Iraq and handed another trillion in unfunded tax breaks to the rich. No one cried out, "Well, who is going to pay for this war?" when they decided to wage it. No one asked how they would "offset" a trillion dollar giveaway to millionaires and billionaires who had already seen their incomes skyrocket relative to working and middle class Americans (let alone families living in poverty) over the prior 25 years.

So when "fiscal responsibility" has been one of the pillars of Republicans' explicit economic philosophy for decades, did they really just "accidentally" forget about it the last two times they were in power?

None of this is to say that we couldn't make government more efficient or cost-effective -- starting with cutting subsidies to oil companies and other special-interest giveaways.

And that leads to the second point.

Before Democrats make any concessions on spending cuts, the only cuts they should talk about -- and talk about publicly -- are a few hundred billion in cuts to tax breaks to big corporations and the rich. Hedge fund managers should not be paying 15% taxes on their incomes no matter how big their campaign contributions, when the top 25 of them are earning a billion dollars a year apiece. Kicking the tax rates of just these 25 people up to the level at which middle class people paid taxes under Bill Clinton would cut $5 billion a year off the deficit. And that's just making 25 people pay taxes like the rest of us. Imagine if we asked the 300,000 people earning a million dollars a year or more to pay for the benefits they get from living in America.

Every time a corporate CEO gives himself a bonus of 15 million dollars, he's just cut the pay of 15,000 of his employees by $1000 each. That's an extraordinary fact, which does not require a complex grasp of either economics or math to understand.

Want to change the calculus that leads to that kind of greed? It isn't hard to do: Impose increasingly high income taxes for all income above 1 million, 5 million, and 10 million dollars, with a top tax bracket of, say, 75% for all income above 10 million (far less than Eisenhower's 90% tax rate for people we would today consider just above upper-middle class).

What would that do (aside from balancing the budget by next week)? It would change the incentive structure in America back from a third-world country to a first-world one, because 75% of the incentive to treat yourself to an extra Jaguar or two rather than to share some of the benefits of your company's productivity with your workers would disappear. And aside from being more fair to the workers who presumably contributed to the productivity that earned their boss such a big bonus, the benefits to economic growth would be substantial, because there are few better ways to stimulate the economy than to put money in the hands of working and middle class people, who spend most of their income, and to take some of it out of the hands of hedge fund managers and derivatives traders, who don't.

From a political standpoint, voters are furious about both parties' favoritism of the rich and well-connected, and they will vote for whichever party they honestly believe understands how deeply they are hurting right now. Historically that was the Democrats.

The third way Democrats could choose to lose faster than you can say "screw your mother" (not in the Freudian sense) is to participate with Republicans in cutting Medicare. In the four decades since Democrats created Medicare -- over the fierce objections and cries of "socialism!" from the GOP (and from none other than Ronald Reagan, who predicted that giving our parents and grandparents security in their old age would be the beginning of a totalitarian state) -- the Republicans have been relentless in their efforts to gut it. Paul Ryan's proposal to hand the average senior, who lives on $15,000-$20,000 a year, a voucher for $6000 and say, "Good luck, old lady, find yourself a health care plan!" is just the latest (and politically least savvy) of those efforts.

Yet Democrats seem to have remarkably short memories (all the more reason to maintain Medicare and Medicaid coverage, at least for dementia). Just last year, after Democrats passed a health care law that cut half a trillion dollars from Medicare (over the objections of House Democrats, who would instead have had the wealthiest Americans pick up the tab for subsidizing health care for workers their friends pay too poorly to afford it), Republicans all over the country demagogued the issue and ran against Democrats for "trying to take away your Medicare." With 40% of the voting population over 55, that was a very potent attack, which figured prominently in Republican attack ads, and played a substantial role in producing the "shellacking" Democrats took in the 2010 election.

That should not endear Democrats to Republicans on this issue. Yet unbelievably, after the Republicans just handed the keys to the House and Senate back to the Democrats by voting with virtual unanimity for Ryan's plan in both houses of Congress -- a plan that is wildly unpopular with even Republicans, who, as it happens, turn 65 with the same regularity as Democrats -- the President and Senate Democrats have signaled a willingness to join with the Republicans in cutting Medicare again (which will no doubt be a sine qua non for Republicans' willingness to raise the debt ceiling). As Mitch McConnell put it Sunday morning on This Week, "We know that the Democrats are willing to reduce Medicare. Obamacare cut Medicare about half trillion dollars. The president himself just a month or so ago in a speech about what he would do mentioned an additional half a trillion dollars in Medicare reductions. We know the Democrats are willing to reduce Medicare expenditures. That's something that can actually pass the Congress."

If that's something that could actually pass Congress, the next Congress will be a Republican Congress. There is no more catastrophic mistake Democrats could make than to join with the Republicans in the war on seniors. If Democrats think that the average senior who votes will be able to distinguish competing claims about which party's Medicare cuts will cut them the deepest, they are deeply mistaken. We will end up with a he-said/she-said about which party "really" cares about grandma's health, and the media will offer voters guidance such as, "Democrats say their cuts will have less impact on seniors, whereas Republicans say their plan will give seniors more choices."

If Democrats continue on their self-destructive road to Republicanism, voters will see red in 2012. We can only hope that self-interest will intersect with the public good to shake Democrats until they turn blue.