Speaker Livingston Jude Wanniski November 9, 1998

The financial markets are not responding as well to Newt Gingrich’s resignation as they might have if Rep. Christopher Cox of California had decided to stay in the contest for the Speaker’s job. Cox is a serious supply-sider who would play the politics of surplus on the Laffer Curve, ensuring tax cuts on capital formation in 1999. The Wall Street Journal makes this clear enough in its lead editorial this morning, “Cox For Speaker,” which was dead on arrival inasmuch as Cox this morning conceded the Speakership to Bob Livingston of Louisiana. The chairman of House Appropriations, Livingston gets the job largely because he had the “moxie,” as Bill Safire puts it in this morning’s NYTimes, to say he would challenge Gingrich even before Newt’s Friday decision to quit. Livingston is not exactly an opponent of tax cuts, but yesterday when he told This Week with Sam&Cokie that the first thing he would do as Speaker would be to introduce legislation to take Social Security out of the unified budget, he essentially said he would not use the Social Security surplus for tax cuts next year. With all that black ink taken out of the budget, it goes into deficit, which then leaves President Clinton and the Democrats arguing that tax rates can’t be cut because they will increase the deficit! But Livingston also said that tax cuts would be one of his highest priorities as Speaker. What gives?

First, it doesn’t matter if the budget is unified or not. In the last year, even with Social Security surpluses merged with an operating budget deficit, the President argued that tax cuts would threaten Social Security. The Democrats will play this game one way or the other as long as the Republicans let them get away with it. This is the reason the GOP did so poorly last week, having followed the Gingrich lead of cowering against the stale Democratic threats while hoping the Lewinsky scandal would increase their majorities in the Congress. The only thing the cleavage of the unified budget accomplishes is to make it harder to present the correct argument that the surpluses MUST be used to expand the economy if Social Security as we know it is going to be saved. That is, it makes it easier for the Democrats to demagogue on SSI, playing into the hands of the austerity wing of the GOP, which doesn’t want to cut taxes anyway. These Republicans had hoped their most public advocate, Rep. Mark Neumann of Wisconsin, would win his bid for a Senate seat last week. The Wisconsin voters wisely returned Russell Feingold, or we surely would have Neumann reinforcing the Hoover wing in the Senate and arguing for tax cuts later.

The good news is that the PayGo rule is almost certainly going to be ashcanned at the first meeting of the House Rules Committee in January. PayGo requires that a tax cut be “paid for” with a spending cut, without any consideration of the growth effects of the tax cut. This is the straitjacket into which Gingrich strapped himself at the opening of the Congress in 1995. More than anything else, it is the reason for his failure as Speaker, as it enabled Democrats to demagogue on Medicare and school-lunch programs. The new Rules chairman, California’s David Dreier, is among the most devoted supply-siders in Congress and has vowed to kill PayGo and thus breathe new life back into the Laffer Curve. Livingston is certainly more of a supply-sider than is generally understood, but that’s because his job chairing Appropriations involved spending, not taxing. I’ve known Livingston from his earliest days in Congress, when he won a special election in 1977 and came aboard exactly at the moment Jack Kemp was leading the charge for the Kemp-Roth tax cuts. When he took over as chairman of Appropriations in 1995, he was roundly criticized by the GOP right wing for retaining most of the professional staff that had been hired by the Democrats. Even then, the problem was that Gingrich had decided to run the Congress with half the personnel, to set an example, and Livingston knew he couldn’t make the trains run on time without keeping the seasoned staff on, party aside. Nor did we complain when he allowed the $265 billion pork-barrel highway bill to get through Congress, but that’s because supply-side economics only requires a positive return on investment. Livingston yesterday argued this someday will be recognized when it is realized the money was well spent. The fact that Livingston knows how to get along with Democrats is viewed with deep suspicion by movement conservatives. In one sense, I count it as positive that he was chosen over Cox, a political Catholic whose views on China have enmeshed him with the cultural conservatives and religious right. This has shaped his views on foreign policy in that direction. Livingston is a Louisiana Catholic, not as rigid on the social issues in his world view, less likely to have his religious beliefs tilt the political agenda of the Republican conference.

This is the problem with Rep. Steve Largent of Oklahoma, who is challenging House Majority Leader Dick Armey. Largent is a former football player whose handsome face has twice prompted People magazine to list him among the “50 Most Beautiful People.” He believes in smiling at everyone whenever possible and presenting a positive, cheerful approach to governance. He is, though, a rigid cultural conservative who rejects Ronald Reagan’s idea that the GOP should be a “Big Tent.” Instead, he told "Evans&Novak" on their weekend CNN show, the party should be like a great aircraft carrier, moving on a principled line to a principled goal. If you want to come aboard the carrier, he will welcome you with a smile, but don’t try to influence its direction, especially if you support partial birth abortions, etc

The Washington Post asked Jack Kemp to write an op-ed on what went wrong for the GOP. It appeared Sunday, headlined “That Sinking Feeling.” Here is a part of it relevant to this issue: “Tuesday's results demonstrated the limitations of a political campaign built around only cultural and social issues. It is impossible to separate the culture from the economy; a strong culture requires a strong economy. Those party intellectuals and opinion leaders who gambled this election on a cultural backlash are now licking their wounds and pondering their failures. There is absolutely a place for them in the party of Lincoln, but it can't be in a dictatorial role. Conservative social engineering is every bit as presumptuous as liberal social engineering.”

On CNN’s "Inside Politics" Sunday, Kemp wasn’t asked about this rather sharp criticism of the social conservatives by Wolf Blitzer, but when prompted to discuss the new leadership team, he volunteered that he would like to see Rep. Jennifer Dunn of Washington state in some position higher than her current vice chair of the House Republican Conference. The progressive conservatives, which is how Kemp styles himself, would prefer to see Ms. Dunn as Majority Leader. The fact is that the GOP congressional leadership in both houses has become almost wall-to-wall white Southern Republican males or political Christians.  Rep. Tom DeLay of Texas, who seems sure to keep his position as House Majority Whip, is a ferocious pit bull who scares potential female and minority voters every time he snarls on tv. How much more attractive the party would be with Rep. J.C. Watts of Oklahoma, the only black Republican in Congress, in a leadership slot. Between now and next week, when the Republicans caucus to select their leaders, they can mull this over. Speaker Livingston should do some mulling himself.