Policy-Based Party-Building and Accountability: Fiscal Policy

• In Event: Historical Development of Political Economies

Abstract

Students of policy-making often ask what makes “an idea whose time has come”. Congressional gridlock theory asks what policies are possible. And theories of electoral accountability consider public reactivity to policy change, often without distinguishing between policy issues. What is missing is that parties chose policies to pursue based on their capacity to help win elections, with multiple metrics of interest. Party accountability is a spectrum, and policy issues that are higher in electoral benefits have greater party-building capacity and incentivize greater and more observable party accountability. These issues are ripe for policy-based party-building, and give us the capacity to see more accountability in the political system than observed by other models. A theoretical discussion includes where policy-based party-building belongs in the range of policy issues on two dimensions (either a partisan or bipartisan policy space, and engaging in either credit-claiming or blame avoidance), what parties seek in a strategic adoption of policies, and what behaviors can be observed for high, medium, or low levels of party-building. This is not to say that political actors never make missteps and act in ways not incentivized. Two contrasting case studies, along with congressional voting data, are presented. Both Carter and Reagan’s experiences with tax cuts engender radically different fortunes—though both attempted significant tax cuts.

Republicans have built a party against taxes. This shift has changed much about our politics and transformed our Congress. Looking at all major tax-cutting bills passed by Congress, the GOP shifts to an anti-tax position in 1978 and experiences remarkably few defections since. This paper builds a data set of individual member votes on this, with potential recent wrinkles in this larger historical trend. By 1980, a seismic shift in Republican policy had occurred: the Party adopted tax-cutting policies that would come to define them with the consistency and efficacy of a parliamentary party. But before this change, before 1978’s Proposition 13 tax revolt, Carter and conservative Democrats experimented with tax reduction. Some of Carter’s rhetoric on taxes sounds like Reagan’s later claims, though there are a number of notable exceptions, such as the magnitude of tax reduction proposed under Carter and Carter’s attitude towards corporate interests. Republican opposition to Carter’s 1977 tax cut is used to contrast earlier GOP positions with those adopted in the wake of Prop 13. Carter’s difficulty advocating for tax cuts had deep roots. Major groups in the Democratic coalition, in addition to liberal members of the congressional caucus, opposed this policy. Furthermore, informational hurdles inherent in public opinion proved too high for Carter’s tax reforms that held greater Democratic support. Tax cutting fit far better with a Republican coalition, though its contours under these different advocates would change substantially.

Author

• Laura Blessing, Government Affairs Institute at Georgetown University