Goldstone’s latest book is “Not White Enough: The Long, Shameful Road to Japanese American Internment.” Learn more at www.lawrencegoldstone.com.
If the definition of a successful negotiation is one in which both sides leave dissatisfied but each can claim victory to its supporters, the recent debt ceiling deal between Joe Biden and Kevin McCarthy was a triumph. The president was able to point to how little he had to give up and the speaker could return to his caucus bragging of how much he had gained.
There were surely elements of the agreement that were odious to one or another of the parties. Biden had to give up his plan to forgive student loans, agree to freeze federal spending for key domestic programs, and greenlight a natural gas pipeline that will run from West Virginia to Virginia. McCarthy had to forego the leverage of another debt ceiling fight before the 2024 elections, allow for the ceiling to grow unchecked until 2025, and accept domestic spending cuts far less than his party demanded. While increased funding to the IRS, largely earmarked to pursue tax cheats, seemed to be another casualty, there are apparently side deals that will keep current levels in place.
In the end, however, both men, who had previously drawn lines in the sand, chose to avoid sending the United States hurtling towards financial disaster—which each would have blamed on the other—and accede to concessions they had sworn never, ever to make.
Key to the deal was for each man to reject demands from the most extreme wing of his party, as well as to ignore accusations he had sold out on sacred principles. Both chose instead to seek what the framers of the Constitution designed the document to promote and James Madison in Federalist 10 assured Americans would be the cornerstone of the new government.
Compromise.
Observing the vote in Congress, one would never know that the United States is currently mired in one of the worst periods of partisan ossification in its history. In the Republican-controlled House, more Democrats than Republicans voted for the deal, 165-149. In the Senate, while the vote was more partisan, seventeen Republicans voted yea.
Of greater significance, since few think this vote will usher in a period of amiable bipartisanship, was the movement by both parties back to their ideological roots and away from the screeching of the extremes, without which no compromise would have been possible.
The lines are well defined. Democrats believe that the government must step in to enact legislation that will guarantee basic human dignity and equal opportunity to all Americans. Republicans insist government programs that preempt private sector privilege will inevitably lead to a bureaucratic boondoggle of waste and fraud.
They are both correct.
What Republicans seem to ignore is that the programs of which they are often so critical were enacted because the private sector failed. In the 1930s, for example, the Great Depression hit elderly Americans particularly hard. Millions were left literally penniless with no recourse for work, housing, or even food. State-run programs were a disaster, with those who could receive aid getting only about 65 cents a day.
After President Roosevelt proposed a “social security” program, the bills were attacked in the private sector and by conservative Republicans as “socialism” and a threat to profits. As one scholar wrote, “Virtually all politically active business leaders and organizations strongly opposed social insurance.” Nonetheless, the bill passed by overwhelming majorities in both the House and Senate and was signed into law in March 1935. Social Security has provided minimum income to senior citizens for almost a century with the private sector’s fierce opposition forgotten.
Three decades later, the number of older Americans had tripled while the cost of health care was skyrocketing. Many senior citizens could not afford health insurance that had become ridiculously expensive, since private insurers considered them “bad risks.” Horror stories by news organizations abounded, some detailing the elderly subsisting on dog food in order to pay for vital medical services.
In 1965, again over the furious objections of the private sector and many Republicans who decried “socialized medicine,” Congress passed and President Johnson signed a bill that established what became known as Medicare and Medicaid, the first providing basic health insurance for those 65 and older, and the second making health insurance available to Americans of low income.
In the first three years, nearly 20 million Americans enrolled in one of the two plans. Like social security, they have demonstrated that care for vulnerable segments of the population must be provided by the government when the private sector is either unwilling or unable to do so. There are numerous other examples, of course, including prescription drug coverage and what became known as “Obamacare.”
But if Republicans turn a blind eye to the private sector’s flint-heartedness, Democrats refuse to recognize that government run programs, lacking a profit motive, will tend to waste and create a swollen bureaucracy, to say nothing of encouraging those outside government to view them as personal cookie jars.
This tendency was detailed more than a century ago by Robert Michels, a radical socialist who decided to write a book about the Social Democratic Party in his native Germany, a group that shared his ideals and was dedicated to participatory democracy. He expected to sing the party’s praises, but instead came away disillusioned that it had degenerated into the very sort of self-serving oligopoly that he was fighting against. In his book, Political Parties: The Oligarchical Tendencies of Modern Democracy, he postulated the “iron law of oligarchy,” that every organization, no matter how lofty its ideals, would degenerate into stultifying bureaucratic rule.
Government agencies are the perfect example of what Michels wrote about. While many who administer these programs are doubtless hard-working and dedicated, it is the nature of bureaucracy that some if not many care about little beyond perpetuating their own employment while doing the minimum amount of work, a perfect incubator for fraud.
For example, a recent CNBC investigation revealed that “Medicare and Medicaid programs are being brazenly targeted by sophisticated criminals,” with “estimated annual fraud that tops $100 billion, but is likely much higher,” and that “a convicted fraudster reported that it’s easy to steal from the health-care programs because there aren’t enough agents to keep up with the various schemes.”
And so, it seems, while the United States cannot forgo domestic programs that supplement what the private sector fails to provide, the nation also needs aggressive, effective oversight to ensure that they provide benefit only to the groups originally intended.
That the recently concluded debt ceiling negotiations forced each side to contend with the other to come to a practical resolution, instead of opting for the usual partisan posturing, is therefore a positive development at a time that America needs all the positive developments it can get. While it is too much to hope that the two parties will recognize the outcome as an example of the path forward, perhaps voters will.
If they do, it will make the Biden-McCarthy deal a triumph indeed.
