Our number one fiscal problem is an excessive burden of government spending. A big part of the solution is entitlement reform.
Our number two fiscal problem is a punitive and corrupt tax code (as captured by images here, here, and here). A big part of the solution is a simple and fair flat tax.So what do you think happened when the clowns in Washington were forced to address these issues because of the fiscal cliff? To nobody’s surprise, they were missing-in-action on the first problem and they made the second problem worse. Obama got a class-warfare tax hike and nothing was done to control government spending.
This was a defeat, but it’s not the end of the world. Indeed, it could be the trigger for a renewed campaign for fiscal responsibility.
Here’s some of what I wrote for the Daily Caller, beginning with my assessment that Obama had all the advantages going into the fight over the fiscal cliff.
President Obama entered the battle in a very strong position. A big tax increase automatically was going to happen even if he did nothing, so he was holding all the cards. He could — and did — tell Republicans that they had an unpleasant choice of either accepting that big automatic tax increase or acquiescing to his class-warfare plan. No wonder Republicans have been acting so discombobulated. They had no winning strategy.
And because of this unpalatable situation, I wrote that “I’m not overly upset with Republicans.” There was no way of denying Obama some sort of tax hike.
But they do deserve some blame, at least if they were in office last decade.
I am upset with many of them, however, because they were in office during the Bush years and they voted for much of the wasteful spending that helped create the current fiscal mess. Many GOPers beat their chests about being against tax hikes, but that’s not a very credible or sustainable position when they’re also voting for the no-bureaucrat-left-behind education bill, the corrupt farm bills, the pork-filled transportation bills, the prescription drug entitlement, the TARP bailout, and the 2008 faux stimulus.
As I explained last month, we would be in much stronger fiscal shape if lawmakers had merely restrained spending over the past 10-plus years so that it “only” grew to keep pace with inflation and population growth.
But we can’t undo the past. The real issue is whether we can make progress in the future. Are there strategies that might restrain Leviathan?
Fortunately, the answer is yes.
In the article, I point out that Republicans “have several opportunities in the next few months to show whether they’re on the side of taxpayers.” The key is to pick battles that are winnable. Here are three fights that they can win for the simple reason that nothing can happen without approval of the House of Representatives.
1. In my dream world, I argue that they should “block any disaster funding for New York, New Jersey, and other states affected by Hurricane Sandy.” But I realize that’s an impossible demand because so many people now mistakenly assume the federal government should be in charge of this state and local responsibility. So, instead, they should draw a line in the sand and say the measure won’t be approved unless lawmakers “cut out the billions of extraneous pork that’s been added to the bill.”
This is not a trivial issue. Check out these reports from Townhall and the Weekly Standard to see how politicians have larded the legislation with handouts that have nothing to do with hurricane-related damage. Fiscally responsible lawmakers can make appropriate economic arguments against this pork, but they also can grab the moral high ground and denounce the way special interests and their Capitol Hill lackeys are trying to exploit a tragedy.
2. Another good opportunity is the debt limit. Proponents of smaller government should “insist on some long-overdue process reform as part of an increase” in the federal government’s borrowing authority. In the article, I specifically suggest they look at Congressman Brady’s MAP Act, which “imposes a spending cap modeled after the very successful Swiss Debt Brake.”
But even though I’m a huge fan of Switzerland’s spending cap, it’s important to recognize that the debt limit is a two-edged sword. Geithner, Bernanke, and other defenders of the status quo doubtlessly will engage in a lot of reckless demagoguery, falsely asserting that fiscal conservatives could provoke a default if they don’t give Obama a blank check.
3. This is why I think the ideal place to take a stand is the looming fight over the “continuing resolution.” Ignoring budgetary jargon, all you need to know is that Washington’s spending authority expires at the end of March. This means “that the government no longer will have authority to spend money for the non-entitlement portions of the federal government.”
In the article, I argue that “…lawmakers should insist on genuine spending cuts. And if Obama balks, let him be the one to shut down useless and counterproductive bureaucracies such as the Department of Education and the Department of Housing and Urban Development.” The potential risk of this strategy is that voters will blame fiscal conservatives if there’s a government shutdown, but I explained in an article for National Review that this was a very successful strategy in the mid-1990s.
The only problem with these three ideas is that they can only succeed if Republicans genuinely want to fight for smaller government. And as we saw from votes on housing handouts, pork-barrel spending, and corporate welfare, the GOP oftentimes is part of the problem.
