Usually
the Senators and Congress folk of the President's party issue press releases of praise and approval after the State
of the Union address and the next fiscal year's budget is submitted by the White House. Not this year. Silence.
Why?
One reason is that this budget is even more DOA than usual. It reduces the rate of growth in domestic spending
in an election year, in spite of recent record increases. Having giveth, the Republicans don't want to be seen
as the ones who taketh away.
Another reason is a unique reform effort within Congress. Having ruled for a decade, the establishment Republicans
have slipped from reform to preserving the status quo. It is, says Dick Armey in the WSJ, government by the authorizers
and appropriators who are the ones driving the legislative process. The inevitable consequence is the doubling
of the number of lobbyists in town.
The normal opposition, the Democratic Party, is in a phase where they are hell-bent on proving that they are unable
to govern under any circumstance. The nation may not like the road President Bush is on but they sure would not
turn the wheel over to the MoveOn Democrats.
That situation makes for an interesting and unpredictable development - the emergence of an internal reform movement
within the Republican Party. The question is whether or not the eight months before the election is enough to accomplish
their goals.
In the recent election to replace Tom Delay as House Majority Leader, Rep John Boehner of Ohio formed an alliance
with a number of Young Turks such as John Shadegg, Jeff Flake, Mike Pence, Jeb Hensarling and others. Their internal
reform program, as summarized by Armey, has the following major points.
Earmarks. These annoying little items have grown seven times over in the past five years, from 2,000 earmarks
in 2000 to 14,000 in 2005. Two reforms would address this issue. One is to expand the President's rescission authority.
The other would be to pass Jeff Flake's earmark reform legislation or, in the alternative, S2265 - the bipartisan
Senate version called The Pork Barrel Reduction Act. The status of these and other proposals can be monitored at
PorkBusters: www.truthlaidbear.com/porkbusters.
The major features of these bills is to create a point of order procedure which allows for the elimination of unauthorized
earmarks attached to another bill while maintaining the integrity of the underlying bill. Appropriations that end
run the normal committee process will require full disclosure and 48-hours of review time.
Tax Reform. With a glowing economy at the moment, permanent repeal of the death tax, permanent extension
of dividend tax relief and permanent status for both income and capital gains reductions will be sought in this
election year. Extensions are more likely.
Social Security Reform. The biggest national tax burden is the unsustainable gap between revenues and spending
caused by Medicare (with its new Part D prescription benefit), Medicaid and Social Security. Currently costing
6.7 percent of GDP, they are headed for 14.3 percent by 2040. According to columnist Ron Brownstein, entitlements
are too explosive for one political party to impose a solution on the other. President Bush has proposed yet another
bipartisan study commission but getting something done in the eight months before elections seems somewhere between
doubtful and ridiculous.
Either parties will work together or nothing will happen on any major issues. At the moment, both parties want
to change the subject as quickly as possible.
Tort Reform. Too many proposals enrich the elite personal injury lawyers and allow favored corporate interests
to escape responsibility while paying the victims from less favored business interests and the taxpayer. For example,
the Specter/Leahy asbestos trust fund legislation is inferior to the House version written by Chris Cannon. It
is far more precise in defining who has been hurt and deserves accurate and adequate payments. Medical malpractice
reform is another proposal within reach.
Health Care. Health savings accounts are successful and the concept should be extended. Medicare reforms
need to include reforms based on ownership and individual control. The Part D prescription benefit program is a
true disaster, already costing twice projections and it hasn't even begun. The Young Turks profess to be ready
to look at the issues.
Dynamic Scoring. Finally, after many years, the FY07 budget authorizes the creation of a bureau of dynamic
analysis that can produce dynamic scoring of proposed tax legislation. Currently, every government program is based
on "static scoring." That is the peculiar-to-the-point-of-being-dangerous notion that tax changes have
no effect whatever on the economy. Reporting the real consequences of proposed policies and comparing them to the
policies they would replace might not prevent bad policy from becoming law but they sure would help, says William
Beach of the Heritage Foundation.
The more politicians duck for cover, the greater impact their decisions will have. The bitter pill of having to
decide between a combination of escalating deficits, huge tax increases and large budget reductions becomes larger
and bitterer every time it is ignored. The big three entitlement programs represented 40 percent of federal spending
in 2005.
By 2010, says economist Robert Samuelson, they will grow to 46 percent and the first of the baby boomers will have
not yet retired. Add defense costs and social programs are wiped out. The government is left with defending the
nation against foreign enemies and providing for the elderly and the ill. In a time when the population seems to
believe that government should take care of all their problems, the European total dependency equation will not
hold.
If government can't curb spending, it will have to raise taxes. The issue of governance is not to avoid the subject
but to convince the population that unpopular changes are necessary and just. That's a topic for 2009.
Lots of luck.
