We are Winning - Even if We Lose the Midterms in 2022

Progressives have largely won the philosophical debate over the economy in the last forty years

As the Fox propaganda machine ratchets up and we wait to see if Manchin and Sinema will kill the Build Back Better bill, it’s understandable that people are frustrated - with a touch of despair on the edges of the Discourse. 

People should want and demand more since so much is needed to address the human and environmental crises we face. And people should rightly fear what a strengthened, Trumpist GOP will do if they gain ground in the 2022 midterms.

But as I argued in How Dems Saved the Economy, we should not lose sight of the victories we have had in the last two years. It’s a policy victory that saved many people's lives and protected them from economic devastation, but it also reflects a political and philosophical victory that largely routed the conservative economic ideal.

Democratic victories in enacting the CARES Act, the American Rescue Plan, the infrastructure bill and moving the Build Back Better bill forward are all tremendous gains, reflecting the ways progressive ideas on the economy have become the mainstream in Democratic Party thinking and in society more generally.

We need to recognize that victories are rarely complete and come in waves of success, then setbacks - but the long-term trend over the last forty years has been steady progress in shifting the debate on the economy in a more progressive direction.

It is particularly remarkable that in 2020, despite the Republicans controlling the Senate and the Presidency, the Democrats were able to push through the CARES Act and other smaller bills that drove well over a trillion dollars in new spending into the hands of working families, with the Republicans abandoning past supply-side and budget-cutting nostrums to support the bills’ passage.

The Intellectual and Political Rout of the Democrats by Reaganism

It is such a contrast to 1981, another year the Democrats controlled only the House in the face of a Republican-controlled Senate and Presidency. That was the year I entered high school and became politicized as I watched Reaganism take a wrecking ball to social spending. Even as unemployment in that recession would rise to nearly 11% overall - and over 20% for black workers - “Reaganomics” would promote an economic program that would slash social spending and cut Medicaid even as workers were losing employer-based health care, and use those spending cuts to fund the largest tax cuts over the last century.

And what made the triumph of Reaganism so bitter then is that large numbers of elected Democrats at the time largely gave into its arguments politically and intellectually. 135 Democrats in the House & 37 Democrats in the Senate voted for the Reagan tax cuts in 1981, pulverizing the tax base of the government. In most ways, Reagan had stronger working majorities controlling both Congressional chambers far more thoroughly than either George W Bush or Trump would ever have in future Congresses.

Notably, the then-Democratic Senator from Delaware, Joe Biden, would vote for those tax cuts and signaled the capitulation of the Democrats in this speech on the Senate floor:

On the separate vote to enact Reagan’s brutal Gramm-Latta budget cuts, you still had 63 Democrats in the House vote for them, and only 14 Democrats in the Senate voted against them.

In a sense, the capitulation made sense given that Reagan’s tax cuts were just an extension-on-steroids of the Revenue Act of 1978,  which cut tax rates on the wealthy, reduced capital gains taxes, and rolled back corporate tax rates- all supported by nearly every Democrat in Congress and which Jimmy Carter signed into law. Conservative economic ideology was largely bipartisan in the 1970s.

What Neoliberal Turn?

Some on the left have denounced a supposed “neoliberal turn” in the Democratic Party, often blaming Bill Clinton for a shift to the Right in the party, but well over a dozen years before Clinton took office, large portions of the party had sided with Reagan to slash taxes and the federal budget.

If anything, the Clinton Presidency saw the consolidation of the shift among Democrats towards a more progressive stance on raising taxes on the wealthy and opposing domestic budget cuts. Liberals had rallied in the midterms of 1982 and regained enough House seats to give then-Speaker Tip O’Neill working control of the chamber versus the “Boll Weevil” Democrats and Republicans who had largely allied together to hijack control over the first two years of Reagan’s Presidency. In 1986, Democrats would gain eight seats in the Senate and regain control of that chamber.

When Clinton was elected in 1992, he sought a stimulus package to overcome the unemployment facing the nation as he took office, but still faced opposition by some Democrats. But while that plan was defeated, only twenty-two House Democrats opposed his stimulus package and Clinton was able to push through a significant tax increase on the wealthy with support from the caucus, the largest peacetime tax increase on the wealthy in postwar history up to that point. Some other tax increases had been larger as a percentage of GDP, but those were levied on the broader population of taxpayers, while Clinton and the Democratic Congress in 1993 returned the top marginal tax rate to 39.6%, raised the top corporate tax rate to 35%, and assessed Medicare taxes on high-income wage earners for the first time in history.

When the recession of the early 2000s hit, Bush turned to the GOP playbook of tax cuts to try to juice the economy, but largely avoided the budget cuts that had been a hallmark of the Reagan era. And notably, far fewer Democrats joined the Republicans in voting for the Bush tax cuts: only 28 House Dems and only 11 Senate Dems supported them.

By the time the 2008-2009 financial crisis hit, the Democratic political stance was focused on large spending increases to fight any economic downturn. A smaller stimulus plan was enacted by the Democratic Congress in 2008 - and signed by George Bush - and a far larger one enacted with Obama’s signature in 2009. While not large enough to promote a speedier recovery due to residual resistance by moderate Democrats, it was still the largest anti-recession domestic spending package enacted in postwar history. And significant new tax increases on the wealthy were approved as part of the Affordable Care Act as well.

Notably, when Trump took office with Republican majorities in both chambers, Republican attempts to repeal the Affordable Care Act failed, as did attempts at significant cutbacks in other domestic programs. And Trump struggled even to enact his 2017 tax cuts, passing it by a narrow 51-48 margin in the Senate, because, for the first time in modern history, not a single Democrat crossed the aisle to vote for a Republican President’s tax cut bill. This put Joe Manchin of 2017 to the left of the Joe Biden of 1981, reflecting the broader shift in the Democratic Party.

And the trillions of dollars in spending supported by Democratic leaders in 2020 and 2021 to fight the Covid recession reflects the shift as well in Democratic philosophy, where the arguments even by Manchin and Sinema have only been over how MUCH to spend, not whether to have a large Keynesian-style spending program.

The Build Back Better bill, with its programs to improve education, strengthen workers’ rights, expand family leave, and fight climate, is - despite compromises made - one of the most progressive tax and spending bills ever pass the House, as the distributional analysis from the Tax Policy Center emphasizes. Those making a million per year would pay an additional $55,000 yearly in taxes, while the super-rich making more than $4 million a year would pay an additional $585,000 in annual taxes - a 5.9 percent reduction in after-tax income. That the House Democrats that largely voted for the Reagan tax cuts in 1981 has now voted for this bill is a testament to how far we have come.

Progressive Success Reflected in the Intellectual Failure of the Current GOP

Where Reagan and conservative pundits in the 1970s and 1980s would readily talk of the need to slash domestic spending in pursuit of their goals, the current GOP has increasingly lost confidence in publicly even mentioning their economic agenda. Trump largely avoided talking about cutting domestic spending in his 2016 campaign; he did have detailed policy plans to cut domestic spending, but even with GOP control of both chambers in 2017 and 2018, he ended up signing budgets that increased domestic spending in those years.

The Republicans’ (justified) lack of confidence in selling their economic policy to voters in many ways directly leads to the racist and conspiratorial ranting of Trump and his mini-me acolytes. Even as Democrats have gained increasing confidence since 1981 articulating the arguments for their economic agenda, the intellectual bankruptcy of the conservative movement means they prefer to talk about anything BUT their economic prescriptions. “Critical Race Theory”, "Antifa”, “cancel culture”, and “the border” are all the diversions used to keep the focus off of the Democratic agenda that is broadly popular with the public.

That doesn’t mean such diversions can’t be politically successful, particularly in the short term when combined with the systematic vote suppression laws being deployed across the country. And it is not an exaggeration to see the danger of fascist dictatorship growing as demagogues take over the Republican Party and Trump looks to a potential comeback in 2024.

But the rise of fascist movements historically reflects the fundamental success of progressive movements and the failure of traditional conservatism, since corporate interests only fund fascists when their traditional political candidates fail to win over the public. Hitler was not legitimately elected by a majority of the German public; he was made Chancellor by corporate-backed parties that thought they could control him and defeat the German left during the crisis of the Depression. In fact, a bankrupt Nazi Party was bailed out financially by large industrialists to the tune of tens of millions of dollars precisely because those corporate interests thought their traditional political allies were too weak to win against the left.

Progressives should recognize that this fascist political turn on the right just reinforces the fact of progressive triumph on the basic terms of economic debate in our country. That doesn’t mean we can relax politically since the history detailed above reflects that progress hasn’t been linear. But after each setback, progressives have come back stronger, Democrats have become more unified around progressive policy, and the Republicans have retreated farther on public promotion of their own economic ideology.

Hopefully, Democrats can maintain control of Congress in 2022 but whatever that specific short-term outcome, we do need to make investments in long-term organizing to undercut the attractions of rightwing authoritarianism as an alternative to the progressive message, as I detailed here.

But the main point is that we shouldn’t conflate any short-term setbacks with the rejection of the core of progressive economic policy, since this history reflects repeated short-term defeats by Reagan in 1981, by Gingrich in 1994, by Bush in 2000, by the Tea Party in 2010, and Trump in 2016. But each time, Democrats have come back with a more unified progressive policy and a public more receptive to that message.

There are no easy victories and, as the song goes, freedom is a constant struggle. But there is little reason for any discouragement given how far we’ve come.