He’s Back!

1.

In a city where survival is the supreme value, few prominent politicians who have failed have been as resilient as Newt Gingrich. Having led the Republicans to power in the House in 1994 he had to resign as Speaker, and left Congress, after the 1998 elections; his overzealousness in pursuing the impeachment of Bill Clinton was seen as having cost the Republicans five seats. By that time, the formerly much-feared Speaker of the House was widely seen as a joke.

Since his humiliating dismissal, Gingrich has, through sheer cleverness and brashness, once again thrust himself onto the Washington stage. He is more visible now than anyone would have dreamed possible when he left Congress. He serves on a Pentagon advisory board and talks with Dick Cheney and Donald Rumsfeld; and he has influential allies such as Grover Norquist, the leader of a coalition of about a hundred conservative groups advocating a reduced federal government. He has support from powerful business executives and is highly popular with the activist conservative base of the party.

It’s not that Gingrich ever went away. After he left Congress, he opened his own consulting firm, from which he dispensed expensive thoughts to businesspeople and made highly paid speeches. He was given an office at the American Enterprise Institute, and before long, he was appearing once again on talk shows. Gingrich knows that talk-show guests are often invited mostly for the attention they get for their controversial statements, and he doesn’t disappoint.

Now Gingrich has published a new book, Winning the Future: A 21st Century Contract with America, and has let it be known in interviews that he may well run for president in 2008. Preposterous as this may seem, he understands that if he says he is a candidate this will get him more attention and sell more books. In fact, some of his friends think he’s serious about running. His first “Contract with America” provided the platform on which Republicans successfully ran for the House in 1994. Among its ten items were demands for a constitutional amendment requiring a balanced budget, tougher sentences for crimes, welfare reform, tax cuts, increased defense spending, and a rollback of regulations on business. But the Contract with America was less important as an instrument of the Republican victory than as a program for the party, which had been out of power in Congress for forty years.

At least as important for the Republican victory in the 1994 election were not only the missteps of the first two years of the Clinton administration, among them Hillary Clinton’s health care bill, but Gingrich’s own canny assembling of a coalition of interest groups, including gun owners and the Christian right, as well as his attacks on House Democrats for arrogance and corruption as he made the election for the House a national one.

As a legislative program the contract was only partially successful—in the end, according to the nonpartisan National Journal, about a third of it was enacted into law, a third was passed in watered-down form, and a third failed. The three items enacted by the new Republican Congress were relatively minor, including, for example, limits on “unfunded mandates” in which Congress directs state and local governments to act in such matters as reducing pollution, but doesn’t provide the funds to accomplish them. Congress later passed welfare reform, tougher crime laws, higher defense spending, and tax cuts. Some of Gingrich’s proposals, such as term limits for members of Congress, failed, as did the balanced-budget constitutional amendment; but Gingrich and his supporters forced Clinton to submit a balanced budget. It remains unclear whether some of the measures passed because they were in the contract or whether they would have passed anyway because they reflected ideas circulating among Republicans, some of them originating with President Reagan, some with a small band of right-wing House members, including Jack Kemp, who called themselves the Conservative Opportunity Society.

Major Garrett, a Fox News reporter, in his new book about the origins and successes and failures of the Contract with America, writes of how some of its provisions, in particular those on political reform and fiscal responsibility, were designed to attract Ross Perot’s followers back to the Republican Party. Garrett traces George W. Bush’s support of the missile defense program back to Gingrich’s campaign for the contract, though it was never specified in the contract itself; and it has its own powerful constituency among defense hawks and contractors who stand to benefit from it. (The administration’s efforts to develop a missile system continue, but the missiles keep flunking their tests.)

In the mid-1990s, many conservatives wanted to abolish the Department of Education. Now a good many of them, including Garrett, are upset about Bush’s No Child Left Behind law, which required the states to set standards and test how children were meeting them, in exchange for more federal funds. When Gingrich forced the government to shut down in a struggle with Clinton over the budget, most commentators—and many Republicans—felt Clinton had come out best, but Garrett argues that Gingrich won because he succeeded in forcing Clinton to make budget cuts.

Throughout the analysis of the successes of the contract, in The Republican Revolution Ten Years Later: Smaller Government or Business as Usual?, a collection of essays published recently by the very conservative Cato Institute, runs the lament that congressional Republicans have given up their belief in limited government and are increasing federal spending and power, whether in farm subsidies, the prescription drug program enacted in 2003, increased regulation of telecommunications, new federal crime laws, or international peacekeeping. Former House Majority Leader Dick Armey reflects a current strain within the Republican Party when he writes in the Cato book of his unhappiness with the push for a more interventionist foreign policy by the neocons in the Bush administration.

Just about the only thing the Cato authors are happy about is welfare reform. Like Garrett, they deplore the increased federal involvement in education. But they all credit Gingrich with forcing Clinton to adopt such major policy changes as ending welfare as an entitlement program as well as requiring a balanced budget—which Bush has since made obsolete. Though Clinton had pledged to “end welfare as we know it,” he originally wanted only to limit the time people could stay on welfare, not to end it as a federal entitlement program. In 1996 he agreed to accept the Republican Congress’s bill only after bitter debate within the administration. As a result of the new law, while many people went to work, millions have been thrown off the welfare rolls. Conservatives see this as a triumph. By putting forth another “contract,” Gingrich is trying to present himself again as a man of ideas. In doing so, he has revealed the hand of the Republican right on Social Security in a way that could do harm to Bush’s favorite proposal.

In the chapter “Social Security Prosperity,” Gingrich gives the game away. Though Bush talks of his desire to set up private savings accounts as “partial privatization” of Social Security—a limited program allowing workers to put part of their Social Security payments into private accounts—Gingrich makes it clear that some influential conservatives want to completely privatize Social Security. He speaks of the supposed benefits of “shifting fundamentally all Social Security retirement benefits to the personal accounts over the long run.” Among those who share this goal are Grover Norquist and some members of conservative think tanks, in particular the Cato Institute, which has long been arguing for privatization.

For now, Gingrich backs a plan for private accounts more ambitious than anything the administration has proposed. While Bush’s plan would set aside 4 percent, or about a third of the income subject to Social Security taxes, for private accounts, Gingrich supports a proposal, already introduced in Congress, which would divert 6 percent, amounting to half of Social Security taxes, into such accounts. This bill is also backed by about thirty House Republicans. Since the goal of conservatives who share Gingrich’s views is to end the present Social Security system, it’s safe to assume that even if private accounts were begun on a limited basis, conservatives would come back with proposals to expand them over the years.

Though the President originally suggested that his proposal for private accounts would alleviate the predicted shortfall in Social Security funds, which is believed by varying actuaries to be likely to occur in 2042 or 2052, legislators quickly realized that establishing personal accounts would only make the problem worse by reducing the Social Security funds available for benefits. Even the White House has now admitted that the accounts don’t solve the problem of the shortfall, although Bush continues to imply that his proposal would fix it. Moreover, Bush’s proposal would force the government to borrow an estimated additional $2 trillion over ten years and $4.5 trillion in the following decade.

The expected shortfall could be made up by a modest increase in Social Security taxes and reduction of benefits. But Bush continues to argue, against the facts, that the Social Security system will be “bankrupt” in 2042 or 2052. Such scare tactics by those who want to change the Social Security system, the most successful federal program the US has ever had, have reinforced the unjustified fears of large numbers of younger people—as indicated in various polls—that their benefits won’t be there when they retire.

Neither Bush nor Gingrich has been willing to admit that private accounts have their own risks—the markets can’t be expected to consistently produce higher returns than the Social Security system does, and financial markets have higher administrative costs than the Social Security system does, as Paul Krugman has shown.¹ Moreover, Gingrich and other supporters of private accounts make exaggerated claims of the economic growth that would result from the diversion of money into private savings accounts. (Gingrich’s claims for the bill he backs are particularly wild.)

Bush and other backers of privatization are overselling the idea as enabling workers to “own and manage their own assets.” But to minimize risk, the types of investments that could be made would be strictly limited—though Norquist says that these restrictions would likely be loosened over time. And once a worker retires, he or she doesn’t “own” the private account; instead he must purchase an annuity for much of the account in order to spread out the monthly payments of funds put into the account.

Social security benefits would be reduced for those who set up private accounts, and, in addition, the money put into a private account would be treated as a loan, for which workers would have to pay 3 percent interest upon retirement, thus enabling them to keep only the difference between the 3 percent and what the account earned in the markets—hardly as desirable a deal as Bush suggests. Thinking that the money in a private account is theirs, people may want to with-draw it early to meet, say, a medical or other emergency, but they would not be permitted to do so. The account, however, could be passed on to heirs, whereas Social Security payments cannot, but the heirs’ Social Security benefits would be reduced.

While Bush and Gingrich claim, without any persuasive argument, that private accounts will induce people to save, it seems clear that more than anything else they want to privatize savings accounts for ideological reasons, and consider the accounts part of a long-term political strategy. A well-connected Republican lobbyist said to me recently, “What they want to do is break the hold of the Democrats on Social Security.”

The backers of this radical change in Social Security policy believe that citizens will be delighted to have a private nest egg rather than pay Social Security taxes. Grover Norquist cites poll data suggesting that people who own stock are more likely to be Republicans. Therefore, so the theory goes, as more people own stock through their private accounts, there will be more Republicans.

2.

By mid-February the President’s proposal appeared to be dead. Major Republicans weren’t yet saying this publicly, but were talking about it among themselves.

If the plan is indeed dead, the swift demise of the newly reelected President’s principal domestic proposal—for which the White House has mounted an elaborate and expensive cross-country campaign designed by Karl Rove—will have come about for several reasons. The main one was that the White House underestimated the resistance of Senate Democrats to the proposal; at the outset, White House officials simply assumed that a presidential appearance in a state that Bush had carried in 2004 and where a Democrat is up for reelection in 2006 would frighten that Democrat into backing the proposal. That didn’t happen. After Bush’s visit to his state, Max Baucus, Democrat of Montana, who will be running in 2006, told me, “It seems so clear to me that it makes no sense to set up these private accounts. That would harm Social Security rather than fix it. It’s a no-brainer—it’s so out of synch with where Montanans are.”

Privately, Republicans blame the White House for offering a confusing program—one that turned out, on close inspection, not to be the wonderful deal Bush suggested it was. Senate Democrats are virtually united in opposition to private accounts and plan to filibuster any such proposal that reaches the Senate floor; if they do, the Republicans wouldn’t be able to muster the sixty votes necessary to shut a filibuster down. And some Senate Republican moderates had deep misgivings about the proposal. In mid-February a Republican Senator told me, “About a dozen Republicans are keeping their heads down, waiting for the scheme to implode—and that may be on the low side.”

Lindsey Graham, the Republican senator from South Carolina, is trying to work out a compromise plan that includes more safeguards, in the hope of attracting moderate Republicans and Democrats. For now, the Democrats are adamantly opposed to any plan that would “carve out” private accounts from Social Security. If the bill is destined to die on the Senate floor, many Republicans in the House and Senate aren’t interested in sticking their necks out for private accounts.

Roy Blunt, the House majority whip, said to me recently that House Republicans don’t want to take up legislation on private accounts “just for the exercise.” Moreover, a Republican lobbyist told me that congressional Republicans are aware that despite his election victory, Bush’s approval rating has been hovering at around 50 percent—meaning that, he said, “on any given day 50 percent of the public doesn’t like him.” Grover Norquist wasn’t yet saying so publicly, but even by the time of Bush’s State of the Union address in early February he believed that the proposal was dead for the current Congress. His hope was that enough Democrats would be defeated in 2006 to make those remaining in the Senate more open to discussing the idea of private accounts. But he also thought it possible that private accounts won’t be enacted during Bush’s second term. Bush’s recent suggestion that he’d accept raising above $90,000 the amount of earnings on which Social Security taxes are paid was quickly shot down by House Republican leaders as amounting to a tax increase—which it would have been.

Privately, House Republicans have been asking, “Why are we doing this?” They are all aware that the much-feared AARP is vehemently against Bush’s plan. Several Republicans in the House and Senate have recently said they would be willing to consider establishing private accounts outside the Social Security system—a possibility of no interest to those, such as Gingrich and Norquist, whose goal is to privatize Social Security. A Republican lobbyist told me in January, “I think the same guy who told Bush to invade Iraq is now telling him to reform Social Security.”

3.

For someone who watched Gingrich closely in the mid-Nineties, much in his new book is familiar.² Though brilliant as the strategist who brought off the Republican takeover, once in power Gingrich was often erratic and sometimes a little nutty—but he was seldom boring. In 1995, promoting the idea that children born out of wedlock should be placed in “orphanages,” he often spoke of the treacly movie Boys Town, in which Mickey Rooney was the only bad boy (he shaped up with the help of a priest, Spencer Tracy). Gingrich no longer uses the word “orphanages,” which was highly controversial, but now proposes that children born into “violent homes” be placed in Boys Towns. He does not say how this would work. In his new book he once again bounces from idea to idea, many of them similarly ill-considered.

In part his book is a cynical attempt to expand his own following. Never known for his piety (God was absent from the first contract), he now devotes a chapter to “The Centrality of Our Creator in Defining America,” and an appendix in which he describes his visits to the monuments in Washington that refer to God. His chapter on God opens:

There is no attack on American culture more deadly and more historically dishonest than the secular Left’s unending war against God in America’s public life.

This is not reckless talk. Gingrich considers his words carefully; in the past he instructed his followers on how to use words for propaganda purposes, telling them to describe the Democrats as “pathetic,” “sick,” and “corrupt”; Republicans were to be associated with the words “change,” “moral,” and “family.” Gingrich asserts that, “amazingly, today, the Supreme Court likely has a five to four majority for declaring ‘one nation under God’ unconstitutional.” Here the argument is typically slippery and contradictory at the same time. Last year the Supreme Court rejected an appeal of the ruling by the Ninth Circuit Court of Appeals in California that the pledge of allegiance is unconstitutional because of this phrase. Gingrich complains that the court did so on a technicality, but he offers no reason for us to believe that it would approve of the Ninth Circuit ruling. Clearly Gingrich wants to appeal here to right-wing Republicans, who portray the liberal judges of the Ninth Circuit as villains.

There is a move in the House to break up the Ninth Circuit and reassign its judges to other circuits in order to dilute the strength of liberal judges—a blatant attack on the independence of the judiciary. Gingrich has an even more radical suggestion: that justices who have been reversed often, as the Ninth Circuit has, should be removed for failing to meet the constitutional test of “good behavior.” The idea, as Gingrich admits, is to intimidate judges.

Having aligned himself with God, Gingrich then turns to patriotism. He doesn’t mind immigration, he writes, but wants “patriotic immigration,” in which “new minorities learn to be Americans.” In this way—and through his calling for a crackdown on the borders while making it easier for “guest workers” to enter the country legally—Gingrich places himself on both sides of the split in the Republican Party between xenophobic opponents of immigration, like Patrick Buchanan, and business interests who want more low-cost workers. Gingrich understands that to be simply against immigrants offends immigrant groups such as Hispanics. Here he pins responsibility for immigration problems on the same insidious force he finds pervasive in American life. If you are upset about the immigrants in our midst, particularly those who aren’t citizens, he writes, you should blame “the liberal establishment,” which “has undermined and ridiculed American values, American history, and even the idea of American citizenship.”

His demand for “patriotic education” is strangely at odds with conservatives’—and his own—insistence on reducing the reach of the federal government in domestic matters. In his two-page chapter on this topic, Gingrich calls for federal and state standards ensuring that education is “patriotic,” but doesn’t say what those standards should be. He merely suggests that elementary school textbooks include “patriotic stories.” Schools that failed to comply would suffer a loss of federal or state funds. He also urges alumni and trustees of private colleges and universities to organize vigilante committees demanding that “courses be taught without the usual extreme leftist bias of most professors.”

In many ways, Gingrich’s new Contract with America is more radical than his first one—in part because some of the old one was enacted, in part because, as the Republican Party moves steadily to the right, some of his earlier ideas, such as more spending on defense and limits on class action suits, which Congress has recently passed, have become mainstream Republican programs or part of the program of the Bush administration. To some extent, Bush is more radical than the Gingrich of 1994: even Gingrich didn’t dare to suggest revising Social Security as part of his contract. There’s a direct connection between Gingrich’s attempts to weaken the main groups that supported the Democratic Party in the 1990s and Bush’s more comprehensive efforts to do the same thing.

Bush’s plan to limit civil damages is aimed at weakening trial lawyers, who contribute heavily to Democrats. The administration has tried to further weaken labor unions through regulatory changes. It seeks to cut back on Civil Service protection throughout the government, opening up more jobs for competitive bidding (as the Pentagon has done), thus undermining the strength of the public employees unions. At a reunion of the congressional class of 1994 earlier this year, Gingrich told his former followers, “People forget how long it took us to be successful,” and added that the journey is far from over.

4.

Though the Republicans returned to Capitol Hill in January in an ebullient mood, having gained four seats in the Senate, with a 55–45 advantage, and three seats in the House, where they have 232 votes against 203—they were soon confronted with unpleasant realities. The House Republicans got off to an embarrassing start a couple of weeks after the 2004 election when they voted in their conference, which is made up of all Republican congressmen, to change the rules to allow an indicted member to serve in the House leadership. This unabashed act was intended to protect the majority leader, Tom DeLay, three of whose associates had been indicted by a Texas prosecutor for fund-raising violations in connection with a PAC that DeLay had founded. DeLay was clearly concerned that he would be prosecuted.

Later in January, after this maneuver received unfavorable publicity, the House Republicans withdrew their proposed revision and forced through a change in the rules that was even worse. The effect, which went largely unnoticed by the press, was to prevent any ethics charge from being investigated by the House Ethics Committee unless there was a majority of the votes on the committee—which is divided 5–5—to do so. The Republicans thus made it possible for either party to block an ethics investigation.

To guarantee inaction, the House leaders replaced the committee’s chairman, Joel Hefley of Colorado, who had allowed the committee to act on ethics charges against DeLay, and also removed two other committee members, replacing them with congressmen who had contributed to DeLay’s legal defense fund, while also purging some of the committee’s staff. The committee had admonished DeLay for his unethical behavior five times—three times during last year alone. Through changing the chairman and the rules, DeLay got his revenge—and protection.

Though DeLay has survived so far, some Republicans no longer think he will become Speaker when Dennis Hastert retires. Moreover, the Democrats will be watching him closely, as will public interest groups such as Democracy 21, a nonpartisan group headed by Fred Wertheimer that supports campaign finance and ethics reforms. Recently it has been charged that some of DeLay’s cronies ripped off various Native American tribes—including more than a million dollars for stadium skyboxes to entertain members of Congress and congressional staff—by promising them favorable legislation to support the tribes’ gambling casinos. The scandal threatens to include a number of prominent Republicans.

When the Republicans took over the House in 1995, DeLay and Gingrich put into effect their “K Street strategy,” demanding that law firms and trade associations hire more Republicans. (There are now so many such firms that they occupy space well beyond K Street.) DeLay was admonished by the ethics committee in 1999 for threatening retribution against a trade organization that hired a Democrat to head it; by now, the Republicans have made the K Street lobbyists an integral part of the legislative process—the lobbyists sit in congressional offices and help write many bills. This cozy arrangement is full of risks for Republicans if it becomes more widely known.

The Republicans’ management of the House is far more high-handed than the behavior of Democrats when Gingrich set out to overthrow them in 1995. In fact, Gingrich himself in recent interviews has been openly critical of House Republicans for blocking the Democrats from even offering amendments to bills on the House floor. The Republicans have carried one-party rule to unprecedented lengths. They have often excluded Democrats from writing bills in committee and from House– Senate conferences on bills both chambers have passed. This year the House Republican leadership has been conducting a purge of Republican chairmen of committees and even subcommittees who have shown too much independence. DeLay, Hastert, and other Republican leaders have gone so far as to openly make a member’s fund-raising for other House Republicans a criterion for a chairmanship.

The House Democrats, led by George Miller of California, are planning to make a major issue of the Republicans’ behavior. They have not forgotten—as the House Republicans seem to have—that Gingrich brought down the Democrats on charges of arrogance and ethical lapses. But whether they will be as relentless and clever as Gingrich was in the 1990s is now an open question.

Senate Republicans returned to Washington in January, “giddy,” in the words of one, over the defeat of former minority leader Tom Daschle in the last election; they made clear their belief that Daschle’s defeat put Democrats—especially those up for reelection in 2006 in states that Bush carried last year—on notice that they would be labeled as “obstructionist,” as Daschle was, if they opposed Bush’s program. The Republican National Committee began attacking the new Senate minority leader, Harry Reid, who isn’t up for reelection until 2010, as the chief “Democrat obstructionist.”

Though Bush won’t be on the ballot again, the White House is counting on its ability to help congressional candidates in 2006 with money and appearances by the President and other high officials to encourage Republicans to stick with him. But the Republicans are already finding that Daschle’s defeat isn’t as helpful to them as they had expected.
Even Republican support on several major issues is not at all assured. “Survival is the name of the game around here,” a Republican senator told me when I asked him whether Bush may face a rebellion within his own party. He added, “The President is at the end of his line—he’s a lame duck. Most of my colleagues want to be here after George is gone. The President is requesting an awful lot of his party up here: Social Security and tax reform are huge issues; we’re facing a tough budget situation and you have not only Iraq but also Iran and North Korea.” (More recently he probably would have added Syria, with which tensions grew after our conversation.) He was referring to the federal deficit, now estimated at close to $500 billion for the fiscal year 2005. “The question here,” the senator said, “is, Do we really want to open up all these fronts? The President got some credit for the Iraqi elections, but we’re a long way from a solution in Iraq and the administration still has to answer some tough questions.”

In fact, the President’s request for a supplemental appropriation of $82 billion for the war in Iraq came under unprecedentedly sharp questioning even from Republicans on Capitol Hill. Bush’s budget proposals this year were widely seen as particularly phony because they didn’t include the costs of the war or of his Social Security proposal. His proposed cuts in domestic programs, including health care, law enforcement, and social services for the poor such as food stamps, are part of the strategy favored by such right-wing activists as Norquist, of squeezing federal domestic programs. For this reason they don’t mind the deficit.

Bush’s defiantly resubmitting to Congress ten judgeship nominations previously blocked by the Democrats was designed to add more counts to the Republican charge of “obstructionism” and to try to wear the Democrats down in advance of the expected fight over one or more nominations to the Supreme Court. But the Democratic leaders I talked to draw a different lesson from Daschle’s defeat. They say that if anything they should be tougher with the Republicans than Daschle was. Under Daschle’s leadership, the Democrats had no clearly defined program, and many Democrats went along with Bush on such major issues as the Iraq war resolution and tax cuts. Harry Reid is expected to take a firmer line against Bush, and he will be supported—even egged on—in this effort by the new minority whip, Dick Durbin, who has long felt the Democrats should be more aggressive.

Reid told me that the Democrats have taken Daschle’s defeat as a warning that either they offer their own programs and “fight the radical agenda coming from the White House” or they will suffer more losses. In response to Bush’s predilection for asserting a “crisis” to urge action on his proposals, Reid said, “We’re not going to take the bait—not on federal judgeships, not on Social Security.” A Republican senator said to me recently, “We can’t use the words ‘Tom Daschle’ to explain away our problems. He was the guy the Republicans used as the poster child of obstruction, but he’s gone.” Reid calls Bush’s crisis talk “part of the genius of the White House.” As long as Bush talks about the “crises,” Reid said, “we’re not talking about the 1,400 dead soldiers in Iraq or the thousands injured, or about the huge budget deficit, or the environment going into the toilet, or about public education. He diverts attention from these things.”

Bush and the Republican Party are now facing the strongest legislative challenges since Bush was first elected. We can’t now know how long the Republicans will be able to continue the domination of American politics that Gingrich helped to bring about. In leading the party to victory in 1994 and giving it an agenda—even one that was only partially enacted—he made his contribution to the party’s resurgence over the last decade. But his new book’s mostly shallow prescriptions won’t be of much help to Bush now. They’re getting Gingrich some notice, which may be all that he had in mind.

>—February 24, 2005