How else will the Obama plan meet its goal of total social and economic transformation?
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Senate Budget Committee Chairman Kent Conrad (D-ND) is a leader of this plot. So is House Majority Leader Steny Hoyer (D-MD) as well as Speaker Nancy Pelosi. So are all the blue dog Democrats, led by Rep. Jim Cooper (D-TN). Unfortunately, so are some strategically inept Republicans and conservative institutions who are thinking now we need to get control of the long-term budget disaster, but are not thinking ahead concerning what such a Commission will mean in the current Washington thoroughly controlled by the liberal/left.
In fact, legislation for just such a Commission has already been introduced in both the House and the Senate, by Reps. Jim Cooper and Frank Wolf (R-VA), and Sens. Kent Conrad, Judd Gregg (R-NH), and George Voinovich (R-OH). The great majority of Commission members will be appointed by President Obama and the current ultraliberal Congressional leadership. It would be modeled on the base closing commission, with only one up or down vote allowed on the Commission’s sweeping recommendations.
One leading conservative institution that favors this bill argues that it expects the Commission to deal with the long-term budget and entitlement crisis entirely by cutting government spending, which is what it favors. But who are they kidding? The liberal/left now in complete control of Washington, not to mention the so-called Mainstream Media, is not going to support cutting the welfare state in half. It is going to use the Commission to figure out how to finance doubling the welfare state, which is what Obama and the Democrat Congress are adopting now. Any such commission is just to provide political cover for massive, runaway tax increases.
Barack Obama won the White House with a campaign pledge to cut taxes for 95% of Americans. But now this plot is under way to increase taxes on 95% of Americans, to record, bone-crunching levels.
The Right Strategy: Congress Do Your Job
America is not Iran, or Russia or China. We are supposed to be governed by the Constitution and democracy, not by a Commission of supposed “experts.” Conservatives should not be involved in this plot to subvert our capitalist economy, our Constitution and our democracy. They should be advocating the legislative reforms and policies that conservatives favor, and demanding that Congress do its job and enact these changes.
This means that Congress must first reject any new health care entitlement. They should focus instead on alternatives that ensure we have a real health care safety net in place so that no one will suffer without essential medical care. That is all that needs to be done, we don’t need a government takeover of health care as the Left wants. Such legislation has already been introduced by Sen. Tom Coburn (R-OK) and Rep. Paul Ryan (R-WI), involving no net increase in spending or taxes. Another bill has just been introduced by Sen. Jim DeMint with even less government involved, which is more strongly supported by conservatives.
Secondly, Congress should repeal the badly confused stimulus, and end all further bailouts. Only a small fraction of the trillion-dollar stimulus has been spent so far, and it has not and will not work to stimulate the economy. You don’t restore economic growth by borrowing a trillion dollars out of the economy for the government to spend a trillion dollars. That adds nothing to the economy on net, and does nothing for the fundamental incentives that truly drive economic recovery and growth.
Thirdly, contrary to what most half -baked commentators say, packages of tax increases and benefit cuts are not the only way to reform entitlements. Rather, we should advance fundamental reforms that restructure and modernize our entitlements from the bottom up. Such reforms can serve the goals of our current entitlements even better than our current old-fashioned programs, while costing far less.
For example, in 1996 we reformed the old Depression era Aid to Families with Dependent Children (AFDC) program by sending it back to the states with the Federal share of funding for the program in finite block grants. The old program provided matching federal funds for each dollar the state spent, so the states kept increasing their welfare rolls in good times and bad, bringing more federal funds to their state as a result. The new system provided that the amount of federal funding was fixed, and if the state spent more that extra money would all come out of its own pocket. But if the state spent less due to reform, it could keep the savings.
With these new incentives and the freedom to remake the program, the states focused on work requirements to reduce the program’s rolls by close to 60% nationwide. Such reform should now be extended to the other 85 federal means-tested welfare programs, including Medicaid. Send them all back to the states under the same rules.
But Obama has done just the opposite, undermining this reform with new rules and welfare benefits adopted in his stimulus bill, which has already caused a reversal sharply increasing the welfare rolls.
Another opportunity is personal savings, insurance and investment accounts for Social Security and even part of Medicare. Workers should each have the freedom to choose to shift first some and then eventually all of their payroll taxes to such accounts, replacing all the benefits currently financed by those payroll taxes through the accounts. This would dramatically reduce federal spending over the long run, and phase out the deficits of Social Security and Medicare. But since over the long run, real market investments provide much better returns than Social Security even promises, let alone what it can pay, retirees would enjoy even higher benefits under such reform.
While our economy has suffered from a severe recession over the last year, such personal account investments are held for the very long term, for the entire adult lifetime of each worker. When we restore free market policies, the economy and investments across the board will boom again. Meanwhile, to ensure the social safety net of current entitlements continues, such reform can and should include a government guarantee that all retirees will get through the accounts at least as much as promised by Social Security. This would be far less than what such accounts would pay at standard, long term, market investment returns. The South American nation of Chile follows this same policy for its thorough personal account system adopted in 1981.
Such reforms are already included in the Ryan Roadmap, already introduced in legislation by Rep. Paul Ryan. That legislation has been officially scored by CBO as completely eliminating all long-term entitlement deficits, without any increase in taxes. Instead, the federal budget is balanced over the long term at 18.5% of GDP, smaller than the current Federal budget. Indeed, the Roadmap includes tax reform as well, with a new system applying a 10% tax rate on families with incomes up to $100,000 per year and singles up to $50,000, and a 25% rate on all incomes above that. Generous personal exemptions provide that a family of four earning up to $48,000 would pay no income tax.
Another round of tea parties is scheduled for July 4. The Washington plot to explode our taxes, and these alternative reforms, would be a good focus for tea party activists.
A man of faith in a godless age is hitting Americans where it hurts.
Mr. and Mrs. American Spectator Reader, let P.J. O’Rourke talk sense to your kids.
In Britain, defending your property can get you life.
The debacle of this president’s administration is both a cause and a symptom of the decline of American values. Unless Congress impeaches him, that decline will go on unchecked. An eminent jurist surveys the damage and assesses the chances for the recovery of our culture.
It won’t take long for conservatives to scratch this presidential wannabe off their 2008 scorecard.
The American Christmas, like the songs that celebrate it, makes room for everybody under the rainbow. Is that why so many people seem to be hostile to it?
Was the President done in by the economy, or by the politics of the economy?
H/T to National Review Online