What Republicans should do next

by: Lew Uhler and Jim Martin
The Daily Caller
July 22, 2011

Republicans framed the debt limit issue properly with “Cut, Cap and Balance,” which died today in the Senate. Now, they need a debt ceiling bill that showcases how they would change things if given an opportunity in the next election.

To demonstrate that policies designed to prompt massive economic growth are the key to America’s future, Republicans should craft a debt ceiling increase bill that includes certain key spending reductions and economic-growth facets that will spur GDP growth and trigger tax revenue growth (without increasing rates). Each element should be offered as an amendment to the bill, so that members have to vote on each one.

In light of timing realities, it may be best for the Republican leadership to agree to a short-term extension of the debt limit without conditions. Obama and company will know that detailed conditions will accompany any further extension.

Each proposal offered by Republicans as part of the “package” bill should be quantified using “dynamic” scoring methodology to underscore the potential that tax rate reductions will increase tax revenue. That’s what happened under Reagan. Reagan inherited from Carter a GDP growth rate not unlike Obama’s 1.8%. Because Reagan’s policies drove the annual GDP growth rate to 6-8% over several years, total federal revenues doubled during Reagan’s eight years in office, despite (and because of) tax rate reductions. The dynamic scoring methodology will confirm that we can achieve a “glide path” to a balanced budget far sooner than most conservatives realize.

Here are the deficit-reduction/economic-growth-inducing policies we should pursue — at a minimum:

* Freeze and cut federal employee costs: Cut/freeze the pay and benefits of government workers, whose average total compensation is now nearly twice the private sector average.

* Defund programs that have been “flunked” by the Office of Management and Budget (OMB) and lack current authorization: Cut/eliminate/consolidate “discretionary” programs that have been found by the OMB to be “ineffective” or for which there is no current approval or support from the relevant authorizing committee. (Hundreds of billions of dollars could be saved here without taking anything from the poor. Aggressive oversight hearings, which should be part of the plan, would simply confirm the propriety of such spending cuts.)

* Send “welfare” entitlement programs to the states: Cut/consolidate and block-grant to the states (a la the very successful ’96 welfare reform [TANF] model) the 185± “welfare” entitlement programs currently costing nearly $1 trillion annually (including Medicaid, food stamps, etc.). That would save up to half the cost of these programs over 10 years (age-tested Social Security and Medicare do not need to be addressed in this plan.)

* Stop funding Obamacare until the United States Supreme Court rules on its constitutionality: Do so by providing a universal waiver from Obamacare provisions (and other relief), not just waivers for Obama’s friends and supporters.

* Stop transferring jobs overseas: Halt the transfer of jobs and businesses overseas to lower-tax nations by cutting/eliminating the corporate tax rate and other double taxation; return job-creating capital to the United States by eliminating tax penalties on overseas earnings by United States companies.

* Cut the regulatory burden on the economy: Reform and reduce housing, financial and other regulations (estimated to cost our economy $1.75 trillion per year) that are hobbling the housing recovery, financial markets, energy production, etc. Require that any regulation estimated to cost United States consumers/industry more than $25 million per year be submitted as a bill for congressional debate and vote so elected officials, not faceless bureaucrats, are responsible for our laws.

* Make the United States energy independent: Bring down Americans’ cost of living by immediately removing all barriers to oil drilling, oil/gas shale development, clean coal use and other pro-domestic-energy policies. And stop subsidizing ethanol.

The American people will see the connection between these proposals and improvement in jobs, the economy and their well-being. Such policies would restore common sense — and above all, certainty — to the business and investment world and enable private sector leaders to make intelligent decisions.

House Republicans can feel comfortable voting for a debt limit increase accompanied by these pro-growth, cost-cutting proposals. Simply send the bill to the Senate and challenge that body to accept them or explain their actions to the American people. Obama will be forced to take a position on each issue — and decide how to employ his veto pen. Time will be our friend, not our enemy.

The American people appear to agree with this kind of fiscal “workout” plan and will confirm their verdict in November 2012.

Lewis K. Uhler is founder and president of the National Tax Limitation Committee and co-author, with Erick Erickson, of a new book, Red State Uprising: How to Take Back America. Jim Martin is Chairman of the 60 Plus Association, a leading conservative seniors advocacy organization.

Read the article here: http://dailycaller.com/2011/07/22/what-republicans-should-do-next/

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