policy

A Harris Interactive poll from April 2007 reminds me a law of US politics: Americans like getting things, but we don't like paying for them. 

• A 71 percent to 15 percent majority of adults do not think "it is necessary to increase taxes to reduce the budget deficit". Large majorities of Republicans, Democrats and Independents feel this way;
• Even if taxes "had to be raised", very large majorities oppose raising the estate tax (64%) gas taxes (82%), income taxes (81%), the social security tax (83%), and the Medicare tax (87%);
• When it comes to cutting government spending, there is little support for cutting any substantial programs.

Unfortunately, our government does not have a price mechanism that would allow voters and politicians to do cost/benefit calculations in order to prioritize spending. An effectively progressive flat tax - indexed to spending and made flat across labor and capital income - would do a great deal to solve that problem.  But politicians - Republicans and Democrats - prefer red meat to reality.

A more recent Tax Foundation/Harris poll showed much the same thing, and even suggested people support some conservative/Republicans policy positions (tax reform, tax cuts).

Naturally, some Republicans always pick up on these things and use them to argue that Americans really do support Republican policies.  Well, no. 

Limited government and low taxes are not policies - they are ideals, goals.  Policies are how you achieve those goals, and Republicans have never really figured out how to address the the structural problems that created this philosophically conservative, operationally liberal electorate.

A renewal on the Right must address that problem, or we will be in for another period of power without progress.   In order to rebuild with some chance of progress, the Right's agenda must focus on policies with the following characteristics:

1. Good Policy: The policy works and will help us achieve our ideals.

2. Transformational: The policy will address the structural problems with government - public choice theory, perverse incentives, poor collective decision making systems and the lack of a price mechanism for government.

3. Popular: The policy enjoys majority support, and Republicans can win elections campaigning in support of the policy. (This excludes issues that might gain survey support, but do not actually create an electoral coalition)

4. Viable: The policy has a reasonable chance to be passed into law under a modest Republican majority.

5. Sustainable: Public support for the policy can be maintained.

So here's an open question for the Right: What Right-of-center policies are good policy, transformational, popular, viable and sustainable?

In my last installment of “No Risk, No Reward,” I suggested 5 risky policy changes for the GOP. Remember, you’re not selling plausibility of passage in Congress. You’re selling bold ideas and, by contrast, setting up the party-in-power as sclerotic, bloated, elitist and bureaucratic (all of which is true). Perhaps one of these reforms, like entitlement reform in the 1990s, will even take. Here are 5 more, as promised.

6. Healthcare “1,2,3”

1-Medical savings accounts for every American –  Give every American the option to divert part or all of their Medicare portion of payroll taxes to a medical savings account (aka HSA). These interest-gaining accounts can be used for out-of-pocket medical care and high deductibles. Mitigates the expense account effect running up the costs of healthcare and pulls us back from the cliff (See Singapore).

2-Refundable Tax Credits for the poor (straight into your MSA). Perhaps we can “afford” to help the poor, but not the way we’re doing it. Means-test people and give poor folks refundable tax credits on a sliding scale. They put these resources into their HSAs and choose where their healthcare dollars go.

3-Kill State Monopolies - Let people buy less expensive insurance across state lines. If I can cut my insurance premium in half by buying in Idaho, I should be able to. The only thing that prevents me from doing so is government. Let’s end that bullshit.

7. Dollar-for-Dollar Schools – Create the conditions for the emergence of creative new private, non-profit schools by allowing people to deduct a portion of the tuition to place their kids in these innovative schools. (Then, perhaps this will happen.)  If you’re taking a full pupil out of the DMV-style school but leaving a large portion of the tax money for said pupil, no one can credibly argue that it “takes resources from the public schools.”  Add refundable tax credits for the very poor and you’ve got a viable alternative to the mediocre-at-best public schools system. Universal primary school is maintained. Competition and iterative innovation radically improves our kids’ education. Everybody’s happy (except the teachers’ cartel, uh, union).

8. Congressional Crowdsourcing - Public solutions for public problems means big-dollar contests and public suggestion-box-type efforts can get the best ideas out of the American people. Bureaucrats have terrible incentives. And seriously, there are no Steve Jobs(s) in Congress. Congresspeople and their staffers should find ways to let the "wisdom of crowds" – even ideas futures markets - solve genuine public problems. Who ever heard of an innovative populist meritocracy? Well, now you have.

9. 1% Rule – For every dollar a federal department saves taxpayers relative to a reasonable budget baseline, those employees get 1 percent of that savings directly in their paychecks (according to pay grade). This would encourage bottom-up departmental efforts to tighten up. To prevent artificially bloating budgets the following years in order falsely to reward these functionaries, you’d have to set up the baseline to avoid political gaming of the system. Such may only be possible with a TABOR-like provision. I agree that the devil would be in the details. Just tossin' it out there.

10. Toleration – I have written elsewhere that the GOP should replace the social conservative policy leg of their tripod with a leg of toleration. Toleration is the cultural institution that means conservatives have their own private social conservatism and let others have their own lifestyles, religious beliefs, or whatever as they see fit. The kids today are much more tolerant and you won’t get anywhere with them unless you let go of all the stuff that smacks of theocracy or social engineering a la Falwell. Persuasion and privacy on social issues is preferable to power.(Here are 1-5)

(Note re: this post by Yglesias. Technology contests for CO2 sequestration would cost Americans this much-$. Carbon taxes would cost this much--$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$. Yes, subsidizing carbon sequestration technologies requires tax money. But there are differences of degree and differences of kind. I’m afraid Yglesias's criticism conflates the two. Spending this much ($) versus orders of magnitude more means throwing alarmists a bone, while not continuing to bankrupt the country. Clearly, the case of anthropogenic climate change is losing ground rapidly. But even if it weren't, not one person yet has made the case that these taxes, subsidies and green boondoggles would have any appreciable effect on emissions (or mitigation). Though they are clearly corporate welfare opportunities, which the Obama Administration looooooves.)

Add yet another “R” to the things Republicans need to do to pull their party from the abyss: Risk. What sorts of risks can the GOP take? Let's start with policy. Consider some platform changes that may seem crazy at first, but if you’re prepared to embrace them, own them and see them through you could a) change the national conversation, b) restore your credibility on all this recent “freedom” talk, and c) win younger voters.

Here are 5 to start:

1. Legalize Drugs - You have turned a corner on this issue. All evidence and economics indicates that prohibiting anything for which there is a demand causes black markets. The black markets in drugs mean the costs of doing business are higher—but that means so too are the profits. These profits (and turf) are protected violently by gangs and drug cartels. Gang culture is built around said profits. Remove the profits through legal competition and the gangs fade away eventually (just as they did after alcohol prohibition was repealed). Yes, there will be secondary social costs. Yes there will still be petty crime due to addicts—despite lower-cost drugs. But you can offset those social costs by taxing the product to build rehabilitation centers, which are preferable to building more prisons and morgues. You get credibility points for admitting that people have a right to do what they like with their bodies. Freedom is freedom, warts ‘n’ all.

2. Civil Unions – Want to shake everybody up? Try this: The state should get out of the marriage business. Period. End the debate. Marriage is a matter for churches, mosques and temples. Civil unions ensure that people who unite contractually are treated equally before the law, as the Constitution requires. If a church is willing to marry two gay people, fine. It’s none of the government’s business. Government will, however, offer equal tax treatment. Civil unions cover this just fine and states may craft their own civil union variations. Ultimately, though, marriage is ritual and, therefore, a private matter.

3. Means-test Everything – If it is to exist, every federal social program should be designed to help the very poor. The middle class only a little. The rich none. Government welfare programs for the rich, such as Medicare, are insane. Let's say so. (That includes a louder call for bringing Medicare back from the precipice.) Shame rich, old people: “You cannot continue to rob the next generation and get away with it. You have more resources and your healthcare costs more. Pay for it. You owe it to ‘the children.’” Thus: No welfare for the rich. No corporate welfare.

4. Taxpayer Bill of Rights & Balanced Budget – After this monstrous growth of the federal government by the Obama Administration, people are very likely going have an appetite for some kind of limits on government bloat. A Taxpayer Bill of Rights – which would lock government revenues in at population plus inflation as measured by acceptable cost of living indices. Couple this with limits on national debt that would force cuts. Plus, say we’re not going to charge up the national credit card and the bill to Generation Y. This is grossly unfair. We need to have a limit on deficits and balanced budgets within a certain timeframe, or consequences will follow.

5. Global Warming: “More Technology, No More Taxes” - We’re willing to fund sequestration technology. We’re willing to fund geo-engineering technology. We’re willing to use X-prize-type contests to do it. But we’re not willing to tax the American people as they rebound from a severe recession—for all for a hypothetical “crisis” that has never quite materialized.

It’s time to be the party of ideas again. And ideas are risky. (Nos. 5 through 10 now up).

Tax Holiday, or Payroll Tax Cuts would, over the current and next month, current and next quarter, and even over the whole year, be a better policy than the gov't spending stimulus.

One key measure of any anti-depression policy should be the % of the total policy $ that is spent in the immediate time period (month, quarter, year).  Via Fabius Maximus, one anti-tax cut article analyzes the 2008 tax rebate: “The Economic Outlook and Stimulus Options”, Mark Zandi ( Chief Economist of Moody’s Economy.com), Senate Budget Committee, 19 November 2008 (see  Table #1 on page 10.)

The point is that the Dems want to argue that Tax Cuts aren't good enough for stimulating the economy, relative to some other alternatives like more for Food Stamps and extending Unemployment Benefits (which Reps should support in these times).

My point is that, using the same measure of effectiveness, Payroll Tax Holiday is far, far better than what Obama has.  And the difference should be estimated and publicized.

The MAIN problem is that Republicans want workers to decide how to spend any stimulus, and Dems want elite, tax-cheaters to decide. 

This is also clear in the comments to Matthew Yglesias reasonable discussion of The Paradox of Thrift.  However, the main idea seems to be to oppose Tax cuts ... because they support too much savings.

Personal consumption will help the economy now -- personal savings will help allow the future economy to grow, as would reduced debt.

Paying later for gov't directed half-mal-investment will certainly reduce growth later.

Hello all,

I've enjoyed reading many of the articles here, especially from some of the posters, such as Daniel Ruwe and Mytheos Holt. However, I find there are some unexplained inconsistencies. These questions are up in the air for anyone who cares to answer them.

When and where should we limit freedom? Do you think that the US court system is set up as a fair way to try any person, or only American citizens? Why is it necessary to limit freedom in some cases (FISA, anti gay marriage/civil rights legislature) and not others (gun licenses, financial regulations)?

What programs should be cut first in order to reduce spending?

What is an acceptable size for our national defense funding? Where is the point where we would consider it too large?

What should be the military's primary focus in the years to come? Should they change over to a pseudo-police-keeping force, holding and clearing and winning hearts and minds, as is necessary in places like Iraq? Or should they maintain the classic idea of a war-fighting military (ie, bomb and get out of there)?

What should be done about illegal immigration? Should we take a hard anti-illegal immigration stance and promote laws that punish business for hiring undocumented workers, and try to round up illegal immigrants? Or should we try to provide a path to citizenship instead? In the same vein, should we allow more or less legal immigration than we do now?

Finally, should the Right reject elitism, embrace it, or perform some balancing act?

I appreciate any and all answers, and think it'd be great to get people talking about some specifics.

Jon is right. The addition of some $300 billion in temporary tax cuts to the massive $775 billion Obama stimulus is a risk politically and Bushonomics (e.g. tax-cut-and-spend) on steroids policywise.

What's the main reason Republicans are dispirited right now? Because the Republican Party no longer represented less spending and limited government. What do we propose to do to fix it? Why... double down on this strategy by throwing in with the biggest spending bill in U.S. history if does enough tax cutting! As Jon infers, if the GOP accepts massive stimulus spending of any kind, it will sever the GOP from its base for years, and keep Republicans from rallying around a unifying limited government message in 2010. Instead of a peaceful 1994-style revolution, this will likely trigger a bloody Goldwater-style takeover of the GOP from the outside which may take 2 or 3 presidential cycles to fully play out. Ugly, but it may turn out, necessary.

There is broad consensus in the country right now that we need to "do something" about the economy. The economy will probably recover on its own by early 2010, but we must nonetheless "do something." Republicans should accept this fact and move on.

But there are different ways to "do something." A stimulus primarily composed of permanent tax cuts is a perfectly legitimate and defensive version of "doing something" both from a policy and public opinion perspective -- one that we can go to the country with and not appear like Hooverites or know-nothings. For one thing, past (successful) stimuli have been composed primarily of tax relief. Obama's own economist says the economic multiplier effect from tax relief is greater than than the general consensus of the multiplier from spending (allowing the GOP to paint larding up the bill with spending as primarily ideologically -- not economically -- driven). The American people are not economists, and likely have no inherent preference between tax cuts and spending increases so long as the plan is of a certain magnitude. So, let's educate them.

Right now, I yearn for the legislative acumen -- and in this case, the spine -- of Bob Dole, who rallied even John Chafee -- Lincoln's father -- to oppose the 1993 Clinton stimulus. With the GOP officially reaching rock bottom today, the Republican leadership in Congress has to recognize that number one political priority is not to give voters warm and fuzzies by angling into photo ops with Obama. Yes, he's popular, but his popularity can only redound to the benefit of one party, and that's not Republicans. For a cautionary tale on what happens when a party tries this strategy, see the 2002 midterm elections.

The GOP's number one priority politically is to set into motion a series of events that will make Obama look more ineffective, partisan, and unpopular than he is today. Playing hard-to-get on the stimulus is one way to do it. And we need to set the stage for a unified and effective Republican opposition that will actually fight from top to bottom. Even if Democrats did some truly stupid things these last two years, it was always impossible to rally grassroots Republicans in opposition because the party had zero credibility. Closing that credibility gap -- not beating Obama in popularity contest right now -- must be job one in order to rebuild the GOP. Newt Gingrich and Bob Dole (!) did it, and Boehner and McConnell must do the same. Not neutering our principles in search of short-term headlines would be a good start. 

From this morning's Washington Times:

In what would amount to a slap in the face to a sitting Republican president and the party's Senate and House leaders, national GOP officials, including the vice chairman of the Republican National Committee, are sponsoring a resolution opposing the resort to "socialist" means to save capitalism.

"We can't be a party of small government, free markets and low taxes while supporting bailouts and nationalizing industries, which lead to big government, socialism and high taxes at the expense of individual liberty and freedoms," said Solomon Yue, a cosponsor of a resolution that would put the RNC -- the party's national governing body -- on the record as opposing the U.S. government bailouts of the financial and auto industries ...

The RNC has never played a leading policy role or any policy role except once every four years in framing the national party platform, which is quickly forgotten and almost never referred to for another four years.

Part of the Rebuild the Party plan calls for significant changes in the way we run the party.

The power of traditional connections is being replaced by the power of mass connectedness. Politics is taking place on a grander stage than ever before, with millions, and not just tens of thousands -- participating directly in the process. Millions of people can not only vote, but they can organize with each other across geographic boundaries to build political power in real time. Their sheer scale allows them to rapidly outflank traditional power brokers in a way that simply wasn't possible before.

The Republican Party can no longer survive in a modern era if we resist this new reality. With our power in Washington waning, our grassroots are the source of our greatest strength -- not a problem to be managed. To revitalize ourselves, we must invite the crowd back in and tap their energy and creativity.

One can legitimately opine that this resolution authored by RNC Vice Chairman James Bopp comes from a realization from some RNC members about the importance of our grassroots infrastructure. But this resolution only offers more questions than answers that I could provide. Please share your thoughts on the following:

• If you were on the RNC, would you vote for the resolution? (I probably would.)
• In both the short term and long term, is it a good idea for the RNC to play an active philosophical-policy leadership role beyond the platform? Or should the party stick to reorganizing the infrastructure, tools and strategies for future election cycles?
• Should part of the "revitalization" of the GOP and "tapping the grassroots' energy and creativity" be public policy oriented?
• If the RNC were to take on more of a public policy role, how would that role differ if we were in the Congressional majority vs. minority? How would that role differ if we have the White House vs. not having the White House?

Comments and thoughts please.

As we move forward in developing policy proposals to assist a Conservative/Republican revival, we need to be clear about the types of differences we have with the opposition.  It may seem a little abstract; but I believe a better understanding of these concepts will help us craft better policies and better messages.

1.      Differing parties generally share common goals for the nation and agree on general principles and policies to achieve those goals but each believes the other is incapable of implementing policies effectively (ie. The opposition is incompetent but not misguided or evil).

Right now, this is where we are the weakest.  We have some strong governors but Bush, Brownie, Delay, Foley, Hastert, and on and on and on …. have left even most Conservative Republicans wondering if our party is capable of simple competence.  I have lost count of the number of voters I spoke with in the Fall who agreed with us 100 percent on national goals, principles and policies but voted straight ticket Democrat because they just felt we couldn’t get the job done and they could.

2.      Differing parties share common goals for the nation but differ regarding what principles and policies are best suited to achieve those goals. (ie. The opposition is misguided but not evil and will accept our ideas once we show they will work.)

This was/is Obama’s core message – That almost all Democrats and Republicans, liberals and conservatives, red states and blue states have the same basic goals for the nation and that we will all unite once we realize his policies will deliver these goals.  We need to give this one some serious thought.  I believe he may be right about most people in our nation sharing common goals and wrong about the policies to achieve those goals.  The critical issue for us arises if his policies actually work.  I doubt the problem will arise. However, I want to see a strong prosperous nation with a government firmly committed to securing the fundamental rights outlined in the Declaration of Independence and am agnostic about the methods of achieving that goal.  But many in our movement seem to believe the methods are as sacrosanct as the rights.  So, if we wake up in two years in a strong prosperous nation with a government firmly committed to securing the fundamental rights outlined in the Declaration of Independence  do we continue to oppose the Democrats or shift our thinking to reflect a new reality? 

3.      Differing parties have divergent goals for the nation but respect the good intentions of the opposing party. (ie. The opposition is misguided and will probably never accept our ideas but not evil)

This is where we get respectful differences between Social Conservatives and Social Libertarians (Obama vs Rick Warren).  I believe the electorate will tolerate, even welcome, some level of debate over fundamental societal goals as long as all parties are willing to accept the verdict of the majority and either embrace the final public policy or at least tolerate it with a certain level of good grace.

4.      Differing parties have divergent goals for the nation and each believes the other is motivated by self interest rather than altruism. (ie. The opposition is evil)

The extremists on either end of the spectrum can push this message as hard as they want.  It will only drive voters to the other side.

As we move forward in developing policy proposals to assist a Conservative/Republican revival, we need to be clear about the types of differences we have with the opposition.  It may seem a little abstract; but I believe a better understanding of these concepts will help us craft better policies and better messages.

1.      Differing parties generally share common goals for the nation and agree on general principles and policies to achieve those goals but each believes the other is incapable of implementing policies effectively (ie. The opposition is incompetent but not misguided or evil).

Right now, this is where we are the weakest.  We have some strong governors but Bush, Brownie, Delay, Foley, Hastert, and on and on and on …. have left even most Conservative Republicans wondering if our party is capable of simple competence.  I have lost count of the number of voters I spoke with in the Fall who agreed with us 100 percent on national goals, principles and policies but voted straight ticket Democrat because they just felt we couldn’t get the job done and they could.

2.      Differing parties share common goals for the nation but differ regarding what principles and policies are best suited to achieve those goals. (ie. The opposition is misguided but not evil and will accept our ideas once we show they will work.)

This was/is Obama’s core message – That almost all Democrats and Republicans, liberals and conservatives, red states and blue states have the same basic goals for the nation and that we will all unite once we realize his policies will deliver these goals.  We need to give this one some serious thought.  I believe he may be right about most people in our nation sharing common goals and wrong about the policies to achieve those goals.  The critical issue for us arises if his policies actually work.  I doubt the problem will arise. However, I want to see a strong prosperous nation with a government firmly committed to securing the fundamental rights outlined in the Declaration of Independence and am agnostic about the methods of achieving that goal.  But many in our movement seem to believe the methods are as sacrosanct as the rights.  So, if we wake up in two years in a strong prosperous nation with a government firmly committed to securing the fundamental rights outlined in the Declaration of Independence  do we continue to oppose the Democrats or shift our thinking to reflect a new reality? 

3.      Differing parties have divergent goals for the nation but respect the good intentions of the opposing party. (ie. The opposition is misguided and will probably never accept our ideas but not evil)

This is where we get respectful differences between Social Conservatives and Social Libertarians (Obama vs Rick Warren).  I believe the electorate will tolerate, even welcome, some level of debate over fundamental societal goals as long as all parties are willing to accept the verdict of the majority and either embrace the final public policy or at least tolerate it with a certain level of good grace.

4.      Differing parties have divergent goals for the nation and each believes the other is motivated by self interest rather than altruism. (ie. The opposition is evil)

The extremists on either end of the spectrum can push this message as hard as they want.  It will only drive voters to the other side.

Two days ago, Jon Henke posed the question, "What policy should Republicans be advocating and pursuing to limit government and regain popular support?"

With Barack Obama and the Democratic Congress proposing new bailouts and a significant amount of additional government spending to create jobs and restore the economy, Republicans have a phenomenal chance to reinforce our earnest belief in limited government.  I propose a simple policy that will allow us to both "limit government and regain popular support": Republicans must fight Democratic efforts to build a nanny state to solve the economic woes. Instead, our policy should be offering solutions to revive the economy that are rooted in free market principles.

Indeed, Thomas Sowell points out that government intervention may actually be harmful to the economy:

Even in the case of the Great Depression of the 1930s, increasing numbers of economists and historians who have looked back at that era have concluded that, on net balance, government intervention prolonged the Great Depression.

I recently had a unique chance to discuss the economy with renowned economist and monetary policy expert Dr. Allan Meltzer (which you can read at length here).  Meltzer and other leading economists have observed that the big problem plaguing the economy is the housing crisis, and that the government's efforts to breathe life into the economy have neglected this issue.  Meltzer proposes a free market solution to the housing crisis that could be immensely effective as a step toward getting the economy back on track:

To address the housing problem, Congress and the administration should take actions that increase the current demand for housing. For a limited time, say up to the end of 2009, allow buyers to use the value of their down-payment (or some part of it) as a tax deduction. Or, reduce the tax rate for qualified buyers who purchase a house between now and January 2010. Or do both. Give the benefit to all home buyers, including those buying a second or third house.

The bottom line is that the battle of free markets versus government control is one Republicans can – and should – win.  Dr. Meltzer noted that he often says, "Capitalism without failure is like religion without sin."  Yes, the free market will inevitably fail on occasion – and Republicans, as champions of capitalism, must pursue a policy that ensures that the free market is given the chance to fix itself as it has many times before.  If Republicans can identify innovative free market solutions to the economic woes like the proposals outlined by Dr. Meltzer, we can help ensure limited government while making real progress toward economic recovery.