Crazy American politics: Highlights thus far in 2023

There are simple, straightforward, and relatively gentle measures available:  freezing discretionary funding, attenuating benefits or means-testing entitlements, precluding spending some of the money that has been appropriated over the last 24 months (before people can get used to it being there).  Those who forced concessions on House leadership earlier this month have a slightly different but equally acceptable approach:  reset the budget back to what it was in fiscal year 2022 and proceed from there.

But before any of that can happen, voters need to demand different results, and there seems to be a sense among voters that deficits and debts don’t matter.  They do.

Whoever you owe money (or anything of value) – whether it be nations, businesses, or individuals — controls you.  Your bank.  The repossession team that enforces car payments.  Or those who hold the debt of the United States.

The government is also like individuals and families in that debt limits options and opportunities.  The larger the debt (and the attendant interest payments) the fewer things that can be done.  Right now, interest payments on the federal debt are about $400 billion a year.  The federal government could do quite a bit of good with the cash that is going out the door as interest payments.

How does this particular story end?  The same depressing way these stories have ended for last generation – lots of talk, a few modest concessions which will almost certainly be waived, ignored, or traded away a few years from now, and a vote (or votes) to increase the debt limit.

The Underlying Problem with the House

There can be no doubt that the repeated and repetitive votes for Speaker were not a particularly good look for the House Republicans.  They seemed disorganized, unmoored, and lost at sea.

It is important to recognize that what we have seen is a natural consequence of the party’s lack of an agenda for the last six years.  We are watching a political party trying to resolve its policy and procedural differences in real time, on television and on social media.  It’s not pretty, and there is no way it can be pretty.

The contest over the Speakership was a proxy for a constellation of issues that have simmered for a long time and finally came to a head during the spending bender (in which many Congressional Republicans eagerly participated) over the last two years.

It was driven by the disappointment (and attendant distrust) that many in the party harbor for their Members of Congress.  The 20 or so House Republicans who did not  immediately embrace Mr. McCarthy wanted to avoid another lost decade by limiting the power of the House leadership and restoring House process to what it was as recently as a generation ago.

They negotiated for regular legislative order, where bills, especially appropriations bills, contain and are directed towards a single purpose and are voted on individually after going through consideration by subcommittees, committees, and by the committee of the whole under rules which allow for amendments (open rules).

As recently as 30 years ago, none of that would have been considered exceptional.  It is only since 1995 that Members of Congress have routinely given away their leverage by allowing large, mostly unread bills to become law without any deliberation.  But the House of Representatives has become so intellectually and procedurally desiccated that these changes seem positively revolutionary.

To enforce those restorations, the Freedom Caucus crew wanted and was given three seats on the House Committee on Rules, which sets the terms of the debate and boundaries under which legislation is considered.  It is now split three ways – the Democrats have four votes, those whose loyalty is to the Speaker have six votes, and the Freedom Caucus has three votes.  Given that a majority is seven votes, and that the four Democrats will always vote against the Speaker, the Freedom Caucus has the ability to stop any legislation.

Finally, whatever the talking heads in the legacy media think or say, this was not an embarrassing moment, a threat to national security, or any such nonsense.  Rather, it is what genuine representative government looks like.  People disagree – sometimes about goals, and sometimes about the ways to achieve them.  Then they seek commonalities and advance.

China Invades

A couple of weeks ago, the Center for Strategic and International Studies made public the results of wargames that sought to predict what would happen if communist China invaded Taiwan.  The good news is that Taiwan – aided by the United States and other allies, including Japan — won.  Taiwan survived and remained independent.

The bad news is that the casualties and destroyed weaponry on both sides were extensive.  The CSIS team was direct:  “The United States and its allies lost dozens of ships, hundreds of aircraft, and tens of thousands of servicemembers.  Taiwan saw its economy devastated.  Further, the high losses damaged the U.S. global position for many years.”

Leaving aside the questions about some of the more optimistic assumptions of the wargamers, the outcome – and similar outcomes from other such exercises — bring into stark relief the more pressing elements of the challenge posed by communist China.

At about the same time, the new Republican majority in the House of Representatives established  the Select Committee on Strategic Competition between the United States and China and placed Congressman Mike Gallagher (R-WI) in charge of the committee.

Select committees in Congress are usually the place where issues go to die.  They operate outside the usual institutional pathways and are unable to legislate.  The committees on whose jurisdiction they impinge (in this case, that’s just about every committee in the House), understandably tend to resent their presence.

It is also essential to understand the extent and depth of the struggle.  The temptation among some is to place the template of our contest with the Soviet Union atop any national competition.  That reduces our conflict with communist China to armed forces and weaponry.

The communists now running China present a much more complicated and difficult challenge.  Communist China has infiltrated the American economy, media, society, and institutions (like businesses and universities) in ways that the communists in Russia could not have imagined.  Try to imagine Apple or Ford having enormous portions of their production in the Soviet Union.  Try to imagine the Soviet Union sponsoring content in Politico or Axios.

Chairman Gallagher understands the magnitude of the problem.  He has said that:  “The select committee will expose the [Chinese Communist Party]’s coordinated whole-of-society strategy to undermine American leadership and American sovereignty while working on a bipartisan basis … to identify long-overdue, commonsense approaches to counter CCP aggression.”

Two substantive changes would help immediately.  We know that Tik Tok is, without a doubt, the most effective psychological warfare ever conducted on the American public.  It needs to be banned.  We know that China uses its access to our capital markets to wage its cold war against us.  That needs to stop.

Fortunately, there is some national cohesion on the pressing need to act on all of this; 140 House Democrats voted along with all of the Republicans to establish the select committee.

The IRA and the IRS

Earlier this month,  Jonathan Chait from New York Magazine gently notified me that a fragment of data referenced in the August note I wrote for friends and families was incorrect.  I wrongly attributed a claim about data to the Tax Foundation.

The data was, in fact, from a House Committee on Ways and Means analysis of the Inflation Reduction Act, and it was actually worse than reported in the August note.  According to the analysis, those citizens reporting anywhere from no taxable income to $200,000 a year will experience the full force of the new IRS agents – a shade less than a million additional audits per year – compared to about 250,000 additional annual audits projected to be conducted on those making more than $200,000.

I apologize for the mistake and am grateful that Mr. Chait was kind enough to alert me to the mistake and not to assume that it was intentional (it most definitely was not).

Part of the problem is that the legislation was passed without any regular order (committee hearings and consideration, etc.), so questions remain about what, exactly, the legislation will do.

We know that the “Inflation Act” –  as President Biden has correctly identified it – provides $45.6 billion over the next 8 years for tax enforcement (a 69% increase over baseline).  It also provides $25.3 billion over the next 8 years for “operations support” (a 53% increase over baseline).

Perhaps most importantly, during consideration of the legislation Treasury Secretary Janet Yellen promised that it would not result in additional audits compared to “historic audit levels” of those making less than $400,000 annually.  That’s where the problem arises.

The House Committee on Ways and Means assessment of the additional audits is derived from the Internal Revenue Service’s own data, and assumes that the rate of audits will be consistent with the rate from 2010-2018.  It is as good an answer as any.

The Department of Treasury itself seems a little confused.  In their brand new report on the legislation (“Inflation Reduction Act:  Assessment of the Internal Revenue Service Implementation Efforts” dated January 12, 2023), they make clear the limits of their understanding with this amazing admission:  “As of December 2022, IRS officials have not yet finalized what constitutes the $400,000 income level or what historic audit level will be used for its metrics.”

If after five months of thinking about it, the IRS and Treasury can’t (or won’t) say how they plan to fulfill what seemed to be the pretty clear commitment of Secretary Yellen not to increase audits on those making less than $400,000 a year, it seems reasonable to call into question the sturdiness of that commitment.

It is important to remember (in an attempt to confirm Secretary Yellen’s promise and provide the Department of Treasury with what appears to be elusive clarity) that Senator Michael Crapo (R-ID) offered an amendment during floor consideration of the legislation that explicitly limited audits and enhanced enforcement to those taxpayers and companies making more than $400,000 annually.

It will come as no surprise to learn that the amendment failed; not a single Democrat voted for it.

That vote – and the subsequent smokescreen about how much $400,000 is and what the Secretary meant when she said “historic audit levels” – suggest what the extra cash and the 87,000 new agents are really all about.  Team Biden plans to squeeze everyone, irrespective of vague commitments made in the heat of the moment.

Final thoughts

Permitting reform.  Placing timetables on federal agency action that will be ignored (because there are no real enforcement mechanisms) is not permitting reform and will not lead to improved permitting outcomes.

RNC Chair.  Last week, in California, the Republican National Committee selected Ronna McDaniel to continue to be their chairman for the next two years.  It doesn’t really matter who they selected; the candidates were essentially the same.  Both of them take money out of the party, have an unhappy aversion to policy, tend to engage in talking more than doing, and both are uncomfortably close to the former president.

During the campaign for chairman, we kept hearing from the actual 168 voters that they wished they had different choices.  Here’s some news:  they could have had better choices; any of the members of the RNC (or really anyone at all) could have run for chairman.  Only two did.  That bespeaks a certain amount of institutional complacency, which is odd, given the failures over the last three election cycles.

Losing the will to live.  The Aspen Economic Strategy Group, which is about as establishment as one can get, recently released a book all about economic challenges facing the United States.  Interestingly, one challenge on which they focused was the specter of population decline in the United States.

In their own words:  “U.S. population growth has been shrinking for over a decade, and underlying trends suggest that no reversal is in sight.  [P]opulation growth has trended downward for nearly two decades. . . .  The U.S. resident population grew by less than 0.5 percent in 2019, possibly the slowest peacetime rate the country has ever experienced.”

They go on:  “Though some observers cheer this decline, contending that a smaller population is good for the planet . . . the overwhelming weight of economic reasoning and data suggest that slowdown in U.S. population growth poses a range of economic challenges.”

Do they have any possible explanation for this decrease in fertility among women in the last generation or so?  Not really.

“[T]here is no evidence that any particular policy, cost, or economic factor has changed in recent years in a way that could explain the steady, widespread decline in U.S. birth rates.  Rather . . .  broader social factors are at play and have led to “shifting priorities” among young American adults such that they are choosing in greater numbers to remain childless or to have smaller families . . . ”

Yes, indeed, those pesky “broader social factors” and “shifting priorities” are definitely the problem.  Unfortunately, that’s as far as the thought leaders at Aspen are able to think.

Since they don’t know why people stopped having children, they have no idea how to get them to start having children again.  They can, however, tell you what won’t work – more of the same social engineering driven by government that got us here.

“[T]he types of pro-natalist policies . . . including modest child allowances, tax credits, paid family leave, and subsidized childcare—are unlikely to lead to substantial or sustained increases in the birth rate such that the U.S. total fertility rate would rebound to replacement level.”

Shocker:  government policies can’t solve existential societal problems.  You know what can solve the problem (although the gang at Aspen only grudgingly mention this):  a return to and recrudescence of religion.  Nations that go to church – whatever church – are doing fine with respect to fertility.  It is the unchurched nations on this planet that have suddenly discovered that they are in a demographic death spiral.

The Aspen report wanders into this:  “Greater religiosity is linked to higher fertility, and religiosity is declining in the United States. The percentage of the population who report that religion is at least somewhat important to them fell from 83 percent in 2007 to 78 percent in 2014.”  We won’t go into actual church attendance here.

For a society to thrive, citizens must routinely do things that are contrary their own economic advancement – including going off to war or having children.  Once a society gives up on God, people stop making those sacrifices, and the ability to do the essential things – transmit life, preserve values, defend the nation – degrades pretty quickly.

Team Aspen deserves credit.  They took a hard look at a difficult topic and concluded, correctly, that their way has led us into a dead end.  They recognized that they have finally arrived at the natural and inevitable end of utilitarianism.  Now, along with all of us, they need to search for meaningful answers to the actually existential question of population decline:  what are we going to do?

Quis custodiet ipsos custodes?  Earlier this month, the House of Representatives established within the House Committee on the Judiciary the Select Subcommittee on the Weaponization of the Federal Government.  Leaving aside the messaging problem with the name of the subcommittee (no one understands what “weaponization” might mean in this context), the creation of the select subcommittee is welcome.  The amount of criminal and questionable behavior among the FBI and the Department of Justice has become so overwhelming and obvious that Congress must take action.

We know that some in the FBI and the DOJ tried to select the president in 2016 and 2020 and helped fabricate evidence (the Steele Dossier) to do so.  We know that some in law enforcement and the intelligence community have committed perjury before Congress and the FISA courts.

The FBI has used the CIA and NSA to surveil American citizens.  The intelligence community has surveilled Congressional offices.  The Department of Homeland Security surveilled reporters and others.  The FBI surveilled presidential campaign staff in 2016.

Multiple elements of the federal government have used social media companies to silence their opposition.  FBI agents have violated the bureau’s own rules almost 750 times in recent years while conducting investigations involving individuals engaged in politics, government, the news media, and religious groups.  Federal law enforcement has ignored crimes propagated by one side of the political spectrum (think firebombing pregnancy centers or the 2020 riots).

Right now, we are in the middle of a demonstration of politicized law enforcement.  The FBI essentially kicked the door in at Mar-a-Lago searching for classified documents, while Team Biden was allowed to conduct their own search on their own timetable (two months) for illegally stored classified documents.

That’s quite a list, and it includes just the things we know.

Unfortunately, the Republicans will probably focus on mostly trivial issues and vengeance.  They should focus on educating voters about the very real risks posed by the involvement of law enforcement and intelligence agencies in the political arena.

We have a rare, and perhaps singular, opportunity for a systemic, transparent, expansive, and material examination of a fundamental threat to the republic.  It would be tragic to waste it scoring partisan and trivial points and not addressing the existential threat to the republic.

When people with guns and badges decide who is going to lead the country, it is inevitable that the country will eventually have nothing but barracks emperors.

The value of remaining tethered (even marginally) to the truth.  There are advantages for policymakers to remain tethered – however tenuously – to the truth.

I suspect that both Mr. Trump and Ms. Abrams wish they could reel back in their post-election clams of fraud.  I bet the Democrats wish they had not made such a thing out of what is very likely the non-event of the presence of classified documents at Mar a Lago.  I’m sure Congressman Schiff (and others) wished they had not overpromised and underdelivered on Russian interaction with the Trump 2016 campaign.  I imagine Dr. Fauci and others wished they had not oversold the “vaccines” and undersold natural immunity.

It isn’t a coincidence that test scores went down after schools closed, or that crime increased along with permissiveness.  It isn’t a coincidence that inflation went up along with the injection of money into the economy, or that millions of people are entering the country illegally after it was made clear that there will be no consequences.

The problem with some folks in politics is that they don’t seem to understand that at some point, objective truths become obvious truths.

Michael McKenna is president of MWR Strategies. He previously served as deputy director of the White House Office of Legislative Affairs under Donald Trump and advised the president on energy, environmental and other issues. 

This article originally appeared at Real Clear Energy