Economic Policy Conservatives

In yesterday's Dallas Morning News, my former DC colleague Charles Blahous concludes his thoughtful op-ed on, Who will stop America's plunge into debt?, with the following:

One thing is for certain: Unless and until economic policy conservatives finally put the Trump years behind them, there will be no serious challenge to the left’s economic agenda, and the only debate will be over how rapidly to expand government. The contest over America’s economic future can only truly be joined if moderates and conservatives reunite to advocate for fiscal prudence and free economic activity, wielding the same energy and commitment that the left uses to pursue government’s expansion.

The first statement is true but it does not go far enough. It is a necessary but not sufficient condition.

Economic policy conservatives were on this road to ruin when Chuck and I both served on the Bush economic policy team. Not at our suggestion, the Bush administration passed a new Medicare Part D benefit that, at the time of its passing, had a larger projected unfunded liability than Social Security's projected unfunded liability, which was the fiscal threat that I went to Washington to help solve. My very first week on the job, I wrote a memo to try to get more means-testing onto that new entitlement. (Some of those ideas were later published here, alongside a similar analysis of the marketplace subsidies in Obamacare.) Prior to my arrival in DC, the Bush administration passed a series of so-called temporary tax cuts, almost all of which were eventually made permanent by the Bush and Obama administrations. When the latter did so in the face of the so-called "fiscal cliff" in early 2013, I referred to it as creating a fiscal grand canyon.

All of this happened before the Trump administration.What economic policy conservatives need to do to challenge the left's economic agenda is to acknowledge that:

1. Republicans have expanded our fiscal imbalances through entitlement spending when it suited their political interests.
   
2. Republicans have squandered resources in ill-conceived military operations in Iraq during the early part of this century.
3. Republicans have ignored fiscal balance over the last 20 years when passing tax cuts for the sake of passing tax cuts.
4. There are some valid reasons for the federal government to engage in deficit spending if needed, primarily when it benefits children who are born into challenging social and economic circumstances. (See this paper for an introduction.)
   

Economic policy conservatives, when they can acknowledge these things that implicate much more of the Republican Party's recent history than the Trump administration, might then be able to play a constructive role in countering the left's economic agenda. They are not credible elements of the economic policy process if they don't.