The Demise of the GOP as We Know It?

An Open Letter to President Obama

(Complete version, July, 11, 2011)

An infusion of Tea Party extremisms seems to have infected the Republican Party. Long before they took their seats in Congress, Tea Partisans’ ideas have converted the GOP into staunch defenders of the super-rich—the 1% top earners in the nation.

Mr. President, you may not remember it, but most people paying attention to the fight about the Bush-Tax-Cut extension, last December, were disappointed that you caved in and agreed to extend the tax-cut for the super-rich after the GOP vowed to terminate the tax cut for all Americans if your Administration insisted in stopping the tax cut for the wealthiest 1% only.

Perhaps encouraged by that victory, the GOP is now threatening to shutdown the government by refusing to increase the debt ceiling unless your party, the Democrats, agrees to sharp budget cuts for the next decade without any tax increase.

Experts and non-experts, agree that there is no way that the fiscal deficit can be substantially reduced without a combination of spending reductions and tax increases. The GOP, however, have decided that any tax increase on the super-rich will only pass over their—and the entire Nation’s—dead body. That one of the two major political parties, in the country with the world’s oldest Constitution, can risk the future of the country just to spare the 1% wealthiest American a few percents of additional taxes, is absolutely unconscionable.

Yesterday (Fourth of July) David Brooks, in his NY Times regular article, blamed the GOP’s position on the influence from the members of the so called Tea Party; I am afraid it goes deeper than that: for some hidden reason, the GOP morphed from the party of fiscal discipline to the defenders of the super-rich, in the 1960s when marginal tax rates begun to be reduced from the 90% level to the low 35% level of today. Contrary to the predictions and assurances from the tax-cutters, the record of economic growth after the beginning of the cuts is worse than before it. They have their economics wrong, and they know it; but still use the same old rationale to justify lower taxes on the super-rich—because they have no other.

David Brooks concludes his article with a very serious warning to his own party:

“If the debt ceiling talks fail, independents voters will see that Democrats were willing to compromise but Republicans were not. If responsible Republicans don’t take control, independents voters will conclude that Republican fanaticism caused this default. They will conclude that Republicans are not fit to govern.

And they will be right.”

The GOP has drawn a line on the sand over the issue of “no increase in government revenues.” If the debt ceiling talks fail it would not be clear that the GOP was at fault; after all, standing on the principle of ‘no more taxes’ beats ‘no more spending cuts’ by a mile. Your Administration, Mr. President, cannot afford the talks to fail over those issues; but neither can it afford the public reaction to the austerity measures that will follow a debt ceiling increase on GOP’s terms. Your only chance of winning, now and in November 2012, would be to make crystal-clear what is the real issue:

Is protecting the super-rich from a tax increase a justifiable excuse for bringing the entire nation down?

If I were in your place, I would take the following three steps:

  1. Present to Congress a deficit reduction plan including a gradual increase in the marginal tax rate—taxes on the super-rich.
  2. Ask for a Supreme Court’s pronouncement to remind Congress of its obligation to raise the debt ceiling without pre-conditions. [Art. 1, Section 8, ”… To make all laws which shall be necessary …”]
  3. Explain to the Nation what the real issue in contention is (a fair tax on the super-rich); and keep doing it until the message gets through to the people.

Your Administration, Mr. President, is facing a terrible danger, but also a great opportunity: depending on how you chose to fight, or not, you will contribute to the GOP’s demise, or to its ascendance.

Some would doubt that a major party can ever be marginalized from power; they should perhaps ponder the fate of the Liberal Party in Canada,

“The Liberal Party, after dominating Canadian politics since the 1920s, has been in decline in the 21st century. …, they lost their majority in Parliament in the 2004 election, were defeated in 2006, and in 2008 became little more than a “rump”, falling to their lowest seat count in decades and a mere 26% of the popular vote. … In the election that occurred May 2, 2011, the Liberals suffered a crushing defeat, managing to secure only 18.9% of the vote share and only 34 seats [out of about 308).” [Wikipedia, 7/5/11]

Whatever happens with the debt ceiling talks, a political realignment may be set to occur. Will the two major political parties survive the next US election?

Sincerely yours,

Jorge H. Moromisato

Director of the Reformed Economics Institute,

Denver, Colorado

Author of “The Denver Plan to End Unemployment”


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