Time for a New Contract with America

By John Steele Gordon

One way to turn probable pick-ups into a 1994-style rout this midterm would be for the Republicans to, once again, nationalize the election with a new Contract with America, positioning themselves credibly as the party of real reform.

The 2014 midterm election is less than six months away and much hangs in the balance. While no one can foresee the future, the past is often a good guide. In this case, the history of a midterm 20 years ago sheds much light on the one coming up. That election changed American political history; so could this one.
Midterms seldom have the drama of presidential elections, when the most powerful office in the world is up for grabs. But the midterm election held on November 8, 1994, after President Clinton’s first two years in office, was like no other midterm in American history. And we feel its effects today.
As a general rule, midterm elections go against the party that occupies the White House. Indeed, 1998 and 2002 were the only midterm elections since 1934 when the president’s party picked up seats in Congress. And 1998 was the only midterm in the sixth year of a presidency since 1822 when the president’s party did so (by 1822, the opposition Federalist Party, the party of Hamilton and John Adams, had effectively ceased to exist, resulting in the so-called, and short-lived, “Era of Good Feeling.”)

The election of 1994 changed American politics for the foreseeable future.

But midterms usually have no great political consequences. The election of 1938, for instance, following FDR’s misbegotten court packing attempt the year before and a renewed downturn in the economy, was a very bad one for the Democrats. The Republicans picked up no fewer than 82 House seats and 7 Senate seats. But the Democrats had won such lopsided majorities in the presidential election of 1936 that they retained comfortable majorities in both houses despite the losses.
The election of 1994, however, was different. It changed American politics for the foreseeable future.
The Republicans had become the minority party in American politics after Roosevelt’s first election in 1932. To be sure, they had elected presidents such as the moderate Dwight Eisenhower, an American hero, in 1952, Richard Nixon in 1968, after the Democrats had torn themselves apart at their convention that year, and Ronald Reagan after the failed presidency of Jimmy Carter.
But in the 62 years since 1932, the Republicans had controlled both houses of Congress for only two terms, 1947-49 and 1953-55. Ronald Reagan’s coattails had produced a Republican Senate in 1980, but that majority slipped away in the 1986 midterm. By 1994 the Democrats had controlled the House of Representatives for 40 straight years and many thought that would become a permanent condition.
Instead, the election that year was an epic slaughter of the majority party in Congress. The Democrats lost 54 House seats and nine Senate seats. And that was the least of it. The Speaker of the House, Tom Foley, was defeated for re-election, the first time a sitting speaker had lost his seat since 1862. Also defeated for re-election were the chairmen of the Intelligence, Judiciary, Ways and Means, and Appropriations committees, all of whom had served in the House for decades.
In the state elections that year it was just as bad. The number of Republican governors went from 20 to 30. Many state legislative houses also flipped from Democrat to Republican.
The Republicans would hold both houses of Congress for the next 12 years and would regain control of the House in 2010. After 60 years of Democratic dominance in American politics, the two parties were on a par.
What caused this Republican tidal wave?
The main reason was surely the Contract with America, devised by House Minority Leader Newt Gingrich and Republican whip Dick Armey. Pooh-poohed by the Washington political establishment — overwhelmingly liberal and overwhelmingly intellectually insulated from the country at large — it turned out to be a brilliant political ploy. The contract tuned in to the American electorate’s deep yearning for reform in Washington, a yearning that had expressed itself in the elections of both Jimmy Carter and Ronald Reagan.

The contract tuned in to the American electorate’s deep yearning for reform in Washington, a yearning that had expressed itself in the elections of both Jimmy Carter and Ronald Reagan.

It is a political science truism that, absent outside pressure, institutions tend to evolve in ways that benefit the institution’s elites. That was certainly true of Congress in general and the House of Representatives in particular. As the Democratic majority in the House came to seem permanent, that majority became more and more comfortable and less inclined to discipline itself.
Laws were routinely passed that exempted members of Congress from their effects, even the Civil Rights Acts of the mid-1960s. The 535 members of Congress, in other words, were the only people in the country allowed to discriminate on the basis of race in hiring and firing. The House bank did not operate under ordinary federal banking rules and allowed members to overdraw their accounts with no penalties or interest. A number of members took advantage of this to, in effect, kite checks.
In the Contract with America, Gingrich and Armey detailed reforms a Republican House majority would implement in the House of Representatves. The promised reforms were, most unusually for American political rhetoric, highly specific. It promised, among other changes, that all laws passed would apply to members of Congress as well as ordinary citizens; that the House would have a comprehensive audit to find waste, fraud, and abuse; and that the number of committees would be cut while committee chairmanships would be term limited.
The contract also promised, "to bring to the floor . . . [ten] bills, each to be given a full and open debate, each to be given a clear and fair vote, and each to be immediately available for public inspection." These proposed laws included a balanced budget requirement, tax cuts for small businesses, families and seniors, term limits for legislators, Social Security reform, tort reform, welfare reform, and a line-item veto.
The contract was signed by all but two Republican members who were running for re-election and every non-member Republican candidate. It resonated strongly with the electorate, which came to view the Republicans as the party of real reform while the Democrats were the party of business as usual in Washington, a status quo with which the people at large were thoroughly fed up. The Contract with America thus nationalized the election, making it one of reform versus business as usual. The people voted for reform.

Laws were routinely passed that exempted members of Congress from their effects, even the Civil Rights Acts of the mid-1960s.

Not all of the Contract was enacted. Some failed to pass the Senate, some was vetoed by President Clinton, and some was overturned by the Supreme Court. But much was accomplished, including internal congressional reform and welfare reform. The rate of increased federal spending slowed notably, leading to the first years of budget surplus since the 1960s.
This year, the omens strongly favor the Republicans. President Obama is in his sixth year and increasingly unpopular. And the political landscape favors the Republicans, with many Senate Democrats up for re-election in states that were carried by Mitt Romney in 2012. Most political analysts think that the Republicans will hold their majority in the House and that they have a good chance to take the majority in the Senate.
One way to turn probable pick-ups into a 1994-style rout would be for the Republicans to, once again, nationalize the election based on specific reforms regarding taxes, medical care, a politicized and ever more sprawling bureaucracy, and abuse by federal officials, such as prosecuting attorneys more concerned with conviction than with justice. In other words, a new Contract with America, this time referencing the considerable success that Republican governors have had in recent years achieving reform at the state level.
By positioning themselves credibly as the party of real reform, one ready to rein in and change Washington’s self-serving, self-aggrandizing ways, the Republican Party would put itself back in touch with the country beyond the Beltway. The Democrats, ever more the party of big government and Washington control, are poorly positioned to counter that.
The country is no less fed up today with Washington’s ways than it was 20 years ago. That continuing yearning for real reform is a tide that is there to be taken at the flood and would lead the Republicans on to political fortune in November and beyond.
John Steele Gordon has written several books on business and financial history, the latest of which is the revised edition of Hamilton's Blessing: The Extraordinary Life and Times of Our National Debt.