If Kerry is elected, he will likely lead a divided government. Although the Democrats have some chance of taking back the Senate, the conventional wisdom says the odds are against it, and also says that the Republicans will almost surely keep control of the House.
For some conservatives and libertarians, the prospect of gridlock is a good reason to vote for Kerry. Conservative economist Bruce Bartlett writes:
Poll after poll has consistently shown that the American people like gridlock. They don’t trust either party to run the entire government and like having one in a position to check the other. The most recent poll in December 2002 by NBC News and The Wall Street Journal found 62 percent of Americans in favor of Congress and the White House being controlled by different parties. Only 29 percent were not in favor…
For now, at least a few conservatives and libertarians who normally vote Republican are voting for John Kerry precisely in order to bring back gridlock. One is well-known web blogger Andrew Sullivan, who thinks gridlock will keep government spending under control. “Divided government,” he says, “is perhaps the only real mechanism we have … to restrain the politicians in D.C. from spending even more of our money.”
The libertarian Cato Institute’s William Niskanen points out that since WW II, spending growth has been slower under divided government, and wars have been less common. The Bush administration certainly fits Niskanen’s theory! I’m glad that Bartlett and Niskanen (who are members of that rare breed: honest and credible conservatives) are making this argument, and I hope they persuade some conservatives to vote for Kerry.
But what if restraining spending isn’t so high on your agenda? Spending growth was high during the Johnson administration, but we got Medicare and Medicaid, and a balanced budget too.
Harvard Political Economist Alberto Alesina has written extensively about divided governments. He argues that divided governments react slowly to unforeseen fiscal “shocks”. “The point is not that fragmentation necessarily creates budget deficits, but that fragmentation creates obstacles to policy changes, because it becomes more difficult to reach agreement about corrective fiscal measures,” he writes.
Many European countries, Alesina argues, have had slow growth in recent years. Despite this, Britain, with a unified government, has had relatively modest deficits. In contrast, Italy and Belgium have extremely fragmented governments, and have had debt/GDP ratios above 100% in the recent past. In these countries, divided governments have been unable to come to an agreement about whose taxes to raise or whose programs to cut.
Alesina’s view also describes the Clinton surplus quite well. During the first years of his administration, Clinton had a Democratic Congress, and so was able to pass a tax increase on the wealthy. For the rest of his administration, the peace dividend and the dot com boom resulted in extra revenues. Clinton and the Republican Congress couldn’t agree on what to do with the money, so it piled up and was used to pay down the debt.
The Bush administration doesn’t fit this theory so well, since they seem to have no interest in a responsible fiscal policy; Kerry can’t help but do better. In any event, moderates can expect to be quite pleased with a gridlocked Kerry Presidency. Kerry will veto any attempts by the Republican Congress to pass more tax giveaways for the rich. Congress will block Kerry’s health plans, or any other expensive legislation proposed by Kerry. Progressives will have to reign in their expectations.