You Can’t Fool All the People All the Time

The Monterey County Herald, March 18, 2001
By Leon E. Panetta

In a now famous quote, President Abraham Lincoln was said to have commented to a visitor to the White House in 1865: “If you once forfeit the confidence of your fellow citizens, you can never regain their respect and esteem. It is true that you may fool all of the people some of the time; you can even fool some of the people all of the time; but you can’t fool all of the people all of the time.”

Unfortunately, Lincoln’s sage advice is too often ignored in the politics of 2001. Just consider the following issues:

Campaign Reform: The Senate will soon begin a debate on campaign reform. The primary measure to be considered is the McCain-Feingold bill to ban soft money political contributions—those funds that have no restrictions on the size of what an individual or organization can give to a political party.

The bill draws its strength from the outrageous race for money that presently consumes political campaigns. In the last election alone, more than $3 billion was spent by candidates and parties. Sen. McCain, one of the principal authors of the bill, calls the current finance system “an elaborate influence-peddling scheme” and argues that change is needed to restore confidence in our democracy. According to every poll, the average voter feels increasingly isolated in a system that favors big-spending special interests with increased access and influence because of their unlimited contributions.

And yet, while many representatives of both parties condemn the current process and urge reform, the reality is that behind the scenes Republicans and Democrats are nervous about changing the status quo. Their concern is that both parties now have become so efficient at raising large soft-money contributions they fear that any reform may hurt their ability to compete against one another in the next election.

In the past, many members would vote for campaign reform knowing full well that it had little or no chance of passage. In the last Congress, the House passed a soft-money ban only to have it filibustered to death in the Senate. In 1993, the last time the Senate had a full debate on an overhaul of the campaign finance law, it passed comprehensive reform only to have the bill die because of opposition in the House. In 1996, President Clinton and Speaker Gingrich publicly shoot hands on a commitment to work together to pass campaign reform. Nothing happened.

It now appears that legitimate campaign reform has the best chance of passage in a long time. But the danger signs are lurking again.

Lobbying forces inside and outside the Congress are working to gut or stop the legislation.

The people were fooled before into believing that their elected leaders were sincere about reforming the campaign laws. Hopefully, they will not be fooled again.

Tax Cuts: Another example of political double talk is the current debate over the cost of the tax cut. The argument by the administration is that this nation can easily afford a large tax cut, pay for extensive spending increases in defense, education, prescription drugs, Medicare and Social Security reforms, and significantly pay down the national debt—all at the same time.

As someone who fought in Washington for 20 years to get the nation out of the huge deficit hole created by the last large tax cut and spending increases in the 1980s, you’ll forgive me if I’m somewhat suspicious about promises that we can afford to do this all over again.

First of all, the projected budget surplus over the next 10 years is not money in the bank. It is based on economic projections of what may or may not happen in the distant future. Even the Congressional Budget Office (CBO), one of the principal sources of those projections, points out that they may not completely materialize. CBO notes that budget-surplus projections could be off by $52 billion by 2001 alone and could be off by as much as $412 billion in 2006.

In addition, more than two-thirds of the projected surplus does not even occur until the second five years, beginning in 2006. It could be lost in an economic downturn or a sudden crisis. Just ask the 28 states like California that have seen their large surpluses suddenly disappear because of unforeseen events.

Second, the numbers simply do not add up. Even assuming that the estimates of a $5.6 trillion surplus are correct, $2.9 trillion is already committed to be set aside for the Social Security and Medicare trust funds. That leaves $1.7 trillion to cover everything else.

Although the proposed tax cut is estimated to cost $1.6 trillion over 10 years, when you add the cost of making the tax cut retroactive to January, the cost of fixing the Alternative Minimum Tax which will, if not corrected, increase taxes to more than 20 million middle-income taxpayers, and the cost of the additional interest that will have to be paid on the national debt, the real cost of this tax cut is more like $2.6 trillion. That leaves little of the surplus to cover more that $1.5 trillion in promised new spending. All of this could mean a return to deficit spending and higher interest rates—a mistake we should not make again.

But rather than having an honest debate about the size, cost and fairness of the tax cut, the approach is to convince the public that there ‘s really no problem at all. The House passed the tax cut without even considering the adoption of a budget to show how it would be paid for.

LEON PANETTA, is a former congressman and White House Chief of Staff whose column appears regularly in Commentary. Readers may write to him at the Panetta Institute, 100 Campus Center, Building 86E, CSU Monterey Bay, Seaside, CA 93955.

© 2001 Monterey County Herald and wire service sources.
All Rights Reserved.