Will Consensus for Deficit Spending Include the Technology 16?

October 20, 2008 |

It has taken astoundingly little time for elite consensus to build around the federal deficit. Those who don't actively advocate deficit spending like Robert Reich have at least agreed that now is not the time to try and shrink the deficit. With the financial sector close to collapse, unemployment rising and credit frozen, it has become increasingly important for the government to continue to spend, not only to extend unemployment insurance, but also for things like the bailout and a second round of economic stimulus.

In fact, some organizations whose core principle is to advocate for a balanced federal budget have even ceded the point:

"Right now would not be the time to balance the budget," said Maya MacGuineas, president of the Committee for a Responsible Federal Budget, a bipartisan Washington group that normally pushes the opposite message.

In some ways this has been a dream for liberal elites. The public is ready to embrace a bigger government because of the economic downturn, and a Keynsian renaissance seems inevitable to those who are already Keynsians. Couple this with the fact polls are showing that America is about to elect a Democratic President and control both houses of Congress for the first time since 1994, and they might be right.

But a larger Democratic caucus also means a larger centrist presence in Congress. Liberals and other leftists might be ready to spend, but what about those moderate Democrats who so often make a name for themselves as deficit hawks?

And speaking of centrist Democrats and government spending, what about the Tech 16? These decidedly moderate Democratic Senators have built themselves a sizable presence (with 16 Senators, nearly a third of the current Democratic caucus) that intends to take control of climate legislation in Congress 111. Their broad principles, which include containing carbon costs, investing in clean energy, and handling climate action with an eye toward state equity were outlined in a letter (pdf)to Harry Reid and Barbara Boxer after the failure of Lieberman Warner last June.

Representing purplish states like Virginia, Nebraska, Arkansas and the Dakotas, these Senators are answerable to an electorate that is not always favorable to big government. Many, such as Jim Webb, who was elected in 2006 on a platform of, among other things, reducing government waste, are strict supporters of pay-as-you-go government spending.

Given all of this, will we see these sixteen senators embracing the emerging center-left conventional wisdom that the Federal government needs to continue spending in order to stimulate economic recovery and use it to build consensus for their pragmatic climate agenda? This is always possible. It is equally likely, however, that they may not play ball at all if it means putting it on the government's increasingly long and expensive tab.

This entire discussion plays to an important point, larger than global warming legislation. It is increasingly apparent that the Democrats will make gains in both houses of Congress. Similar to the midterm elections in 2006, it looks like many moderate and even right-leaning districts will elect centrist Democrats to seats that have been held by the GOP for years. It is these centrists that have given the Democrats the majority these past two years. So the question is this: in a Democratic caucus where the centrists are powerful for their ability to secure a majority but not ideologically adherent to leftist policies, will we see a schism in the party? This could be the case. On the other hand, if Obama is elected, this could allow space for these moderates to vote for a more liberal agenda while Obama proactively advances legislation in his first hundred days of office. Only time will tell.