Real World Economics: The old-fashioned politics of consensus is dead

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Edward Lotterman

After more than 200 years of success, American constitutional government is broken.

Our economy has serious faults and will never be healthy until we mend our government. We must restore the effective functioning it had over its first two centuries.

But tragically, the brokenness of our government stems from the disarray and brokenness of our politics. These continue to head in the wrong direction.

We are entering the most intense phase of presidential campaigning and yet there is little mention by either major candidate of the two most vital economic challenges we face: First, federal finances, which have not been on a sustainable footing for 23 years, are approaching a death spiral. Second, the largest component of our budget, the FICA-funded programs of Old Age, Survivors and Disability Insurance (OAS&DI) and Medicare, each are specifically unsustainable.

These problems of funding our major social insurance programs and of medium- and long-term balancing of federal finances as a whole, are not insoluble ones.

Indeed, the experience of the 1990s — when responsibility in the general budget created confidence in households, businesses and financial markets and thus prosperity — should tell us that similar actions today can have near-immediate positive effects. But that would require renunciation of the factionalism that has come to dominate our politics. It would require the re-establishment of bipartisan cooperation in the drafting and passage of legislation in Congress, by far the most broken of our three branches of government.

These negative forces are not new. The idea of “factionalism” as a danger to the democratic government of a republic such as ours was raised in the Federalist Papers, a series of 85 political essays written in 1787-1788 by founding fathers Alexander Hamilton, James Madison and John Jay. These argued for the ratification of the U.S. Constitution that had been drafted by a convention in Philadelphia after it became evident that the earlier Articles of Confederation were a faulty model for governing our new nation.

British capitulation in our War of Independence had given us liberty from colonial rule and from monarchy. The congress of representatives from 13 colonies that had risen to secure independence functioned badly as a national government. We had no head of state, no executive branch, no national judiciary. Nor did we have stable and adequate finances. But we did not want a monarch of our own. We did see the need for two legislative bodies, one more directly popular, the other less so and representing the states. But we did not want to replicate Britain’s parliament with its established parties and most important votes falling along party lines.

The authors of the Federalist Papers strongly supported the new constitution and urged its ratification by the 13 states. Yet they warned of dangers. One was “factionalism,” specifically the division into groups based on regions or economic sectors. Elected members of Congress should deliberate, negotiate and vote on key issues without being dominated by their particular faction or party.

That was a pipe dream. In the new nation, there were bitter factional fights based on New England vs. Middle States vs. South, slave versus free, commerce versus agriculture, new areas west of the Appalachians versus the older seaboard and, eventually, Union vs. Confederacy. Yet while formal parties emerged, there were many important issues on which each party had no specific consensus. Important legislation established institutions and policies that persist today, including the Homestead Act, the Morill Act establishing land grant universities, the Interstate Commerce, Sherman Anti-Trust and Federal Reserve acts all involved bi-partisan negotiations and votes with significant fractions of both parties in both the yea and nay columns.

Citizens concerned about our current congressional paralysis should use search engines to look up voting records on key legislation, such as that for Social Security in 1935 and Medicare in 1965, the G.I. Bill, the Voting Rights Act, the establishment of the Environmental Protection Agency and other key bills. Look at the vote distribution by party in the House and Senate and compare it to the situation today, in which any vote across the aisle, especially by a Republican, will bring forth censure by their caucus and the threat of well-funded primary opponents in the next election.

Then review ratifications of nominations to the Supreme Court and Federal Reserve Board together with cabinet positions. Well into the 1990s the prevailing consensus was that as long as a president’s choice for such a position was not grossly unfit, they should be confirmed. As late as 2005, John Roberts, nominated by Republican George W. Bush, was confirmed as chief justice by a 78-22 vote. As many Democrats voted for him as against. In 1987, Alan Greenspan, nominated by Republican Ronald Reagan to head the Fed, was confirmed 89-4. As late as 1997, Roger Ferguson and Ed Gramlich, Democrat Bill Clinton nominees to the Fed, were confirmed by voice vote with no nays heard. Now all such nominations are on or near strict party-line votes.

Why have we had a change from two centuries of bipartisan legislating to today’s system of party-line divisions on nearly every issue that is more rigid than many European parliaments?

That is a broad question for political scientists. But it is clear that impetus for Madison’s feared factionalism has come from the GOP.

Newt Gingrich’s 1995 accession as speaker of the House was a watershed. Democrats had held the speakership for all but four years from 1931-1995. To win, Gingrich argued, bipartisanship had to be jettisoned and politics had to be made bitterly personal. No longer should Republicans campaign on how they differed in policy from their opponents. Their opponents had to be demonized on electoral hustings and on the floors of the House and Senate. Attacks on motives and character were key.

There were other factors. Filibusters in the Senate had been rare, with a handful requiring cloture votes per year. Democratic majority leader Harry Reid and his Republican successor Mitch McConnell converted that to a supermajority system where nothing could get through the 100-vote senate without 60 votes. GOP Speaker Dennis Hastert and McConnell instituted a system of “majority of the majority” in which committee chairs would not even send a bill to the floor unless more than half of members of the majority party supported it.

Gingrich’s personality led to his own ouster, but his politics of personal attack remained. Some Republicans learned that these tactics worked at the primary level also, and the GOP began to eat its own with the ascension of the “Tea Party Patriots” in the 2010 election. Conservative litmus tests ousted “RINOS” — “Republicans in name only” — for daring to even suggest that policymaking and consensus should supersede winning as a priority.

Much more could be said. The GOP of Eisenhower, Nixon, Reagan, the two Bushes, and of Bob Dole, Richard Lugar, Dave Durenberger, Tim Pawlenty and Al Quie is dead. But the MAGA GOP that killed and replaced it is very much alive. Our politics will remain both vitriolic and incapable of addressing dire problems in our economy until the Republican Party is reborn or replaced.

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St. Paul economist and writer Edward Lotterman can be reached at

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