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Special Report
If They Would Just Think Anew
Conservatives can win on entitlement reform.
(Page 2 of 2)
States could also be freed to use part of those block grant funds for high risk pools, where the uninsured who had become too sick to buy market health insurance for the first time, could be assured of guaranteed coverage, without destroying the health insurance markets for everyone else (as Obamacare threatens to do). Those covered by the pool would be charged what they could manage, with the pool subsidized by public funds to the extent necessary. Similar risk pools already exist in over 30 states, and for the most part they work well at relatively little cost to the taxpayers because only about 1% to 2% actually become truly uninsurable in the private market.
Federal law even before Obamacare provided for guaranteed renewability, which ensures that those with health insurance cannot be canceled or charged discriminatory rate increases as long as they continue to pay the premiums.
Therefore, these reforms altogether would provide a complete health care safety net, assuring health care for all (unlike Obamacare, which CBO estimates would still leave 30 million uninsured after 10 years). Those who have insurance would be assured of keeping it, those too poor to buy it would be given the necessary help to get it, and those who nevertheless remain uninsured and then become too sick to buy it could obtain coverage in the High Risk pools. Yet, these reforms could reduce federal spending over the next 10 years by close to $2 trillion or more, by replacing Obamacare with these Patient Power reforms.
Personal Account Prosperity
All of the retirement benefits financed today through the payroll
tax could be financed instead through personal savings, investment,
and insurance accounts. That includes Social Security and
Medicare.
Because long-term, market investment returns are so much higher than what can be paid through these current, non-invested, tax and redistribution programs, future retirees would actually enjoy much higher benefits through such reforms. At the same time, they would be contributing mighty rivers of savings and investment to the economy that would promote booming economic growth.
But the long-run result would be the greatest reduction in government spending in world history, as the benefits would ultimately be moved entirely from the public sector to market financing.
If workers were freed to choose to save and invest what they and their employers would otherwise pay in such payroll taxes into personal savings, investment, and insurance accounts instead, studies show that at standard, long-term, market investment returns, for an average income, two-earner couple, over a career the accounts would accumulate to close to a million dollars or more. Even lower income workers could regularly accumulate half a million over their careers. Retirees would each be free to choose to leave any portion of these funds to their children at death.
With these accumulated funds, retirees could not only finance much better benefits than Social Security even promises, let alone what it could pay. With further premium support payments financed by the general revenue portion of Medicare, similar to Ryan’s proposed Medicare reforms, retirees could purchase better private health insurance than what they are left with after Obamacare’s deformation of Medicare.
Moreover, with such personal accounts, retirees would each be free to individually choose their own retirement age, rather than the government dictating their retirement age to them. The accounts would inherently include market incentives for retirees to each choose on their own to delay their retirement ages, because the longer they wait the more they would accumulate in their accounts, and the higher benefits those accounts could pay.
Millions of workers with less physically taxing jobs would consequently choose on their own to delay their retirement well into their 70s, a result that could never be imposed politically. But other workers whose jobs required heavy physical labor or who for other physical reasons could not work past their early 60s could retire then. Isn’t this so much better for conservatives than demanding the same delays in the retirement age for all from Washington?
These reforms have again been proven to work in the real world, not only in the South American nation of Chile, in Great Britain, and in dozens of other countries. They have been proven to work right here in America as well, in the private alternative to Social Security used for local government workers in Galveston, Texas, and in the highly successful private retirement investment systems used for the federal employee Thrift Savings Plan.
Power to the People
Such reforms are
further discussed in a series of entitlement reform studies I am
authoring for the Heartland Institute. They were discussed in
detail as well in my 2011 book, America’s Ticking Bankruptcy
Bomb. The political leaders who already show recognition of
the potential for such reforms include House Budget Committee
Chairman Paul Ryan, newly elected Senator Ted Cruz, Florida Senator
Marco Rubio, and Louisiana Governor Bobby Jindal. In 2012,
Presidential candidates Newt Gingrich and Herman Cain readily
embraced such reforms.
Given that these reforms have already been proven to work in the real world, why have we not adopted such reforms already? Because politicians want power and control centralized in big government, where counterproductive dependency on the taxpayers works to their political benefit, rather than power and control in the hands of working people and their families all across America, which works to promote independence and prosperity, so that the middle class and yesterday’s poor no longer need the political class.
If conservatives more broadly would only learn to talk about entitlement reform in these terms, the issue would be transformed into a powerful political winner. Entitlement reform would then be an exciting real world opportunity for a true revolution in the size and scope of government, ultimately winning the war on poverty, achieving health care for all, and securing financial independence and retirement prosperity for seniors.
About the Author
Peter Ferrara is Director of Entitlement and Budget Policy at the Heartland Institute, General Counsel of the American Civil Rights Union, Senior Fellow at the National Center for Policy Analysis, and Senior Policy Advisor on Entitlements and Budget Policy at the National Tax Limitation Foundation. He served in the White House Office of Policy Development under President Reagan, and as Associate Deputy Attorney General of the United States under President George H.W. Bush.
Letter to the Editor View all comments (42) | Leave a comment
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Aristocat| 1.9.13 @ 6:12AM
Sorry, but none of these things can work while the Democrats control the Senate and White House.
Concentrate on what can be done by the House...such as submitting a Republican budget, standing fast against media attacks, force the Senate to pass a budget for the first time in four years, and go after federal employees and other waste, not seniors...
Gary B| 1.9.13 @ 6:54AM
Republicans' best tool is the pulpit. Too bad they have no idea what to do with it. My kingdom for a Republican with the guts to call a spade a spade.
Gary B| 1.9.13 @ 7:07AM
"If They Would Just Think Anew"
If... if... if...
If "if" and "buts" were candy and nuts, it'd be Christmas every day.
Joellen| 1.9.13 @ 8:13AM
Aristocat - if I may just add "none of these things can work while the Democrats control the Senate, White House, Media, Entertainment, Education and "MORALE" agenda".
Thank you and have a good day.
Aristocat| 1.9.13 @ 9:19AM
Joellen: Yes, your are quite correct...
TLP| 1.9.13 @ 10:06AM
You spelled Moral wrong.
C. Vernon Crisler | 1.9.13 @ 9:45AM
It'll only work if we put vertabrates into office and avoid hollow candidates.
GobBluthe| 1.9.13 @ 6:19AM
Conservatives can't even win on the fiscal cliff and you think they can win on entitlements?????
TLP| 1.9.13 @ 9:29AM
Some guys just can't stop Beatin a Dead Horse. They're to Political Commentary, what a One Trick Pony is, to a Three Ring Circus.
You have to Snap out of it, Peter. You have to WAKE UP and smell the people who just Reelected President Economic Holocaust. They don't give a Rat's Ass about any of this stuff. And, the rest of us know that there is No Way any of these Jokes in the GOP Leadership is gonna stick his neck out, so that The State Controlled Talking Points Readers on TV can Cut it off.
And, frankly, I don't blame them.
Instead of talking about things? How about we DO something? We don't need him. and, we don't need the Senate. We have the Purse Strings, now we just need the Will.
We can DEFUND anything we want to. We might not be able to Spend more money, but we can sure as Hell STOP Spending, if we can muster the Courage.
It's time for these people to stop thinking about themselves, for once, and start thinking about their Kids, and their Grandkids. $16 Trillion, headed to $20 Trillion, and no end in sight.
Is that the Country you wanna leave your children?
We gave you the Power.
USE IT!
While there's still time.
SUBVET| 1.9.13 @ 5:42PM
There's TLP our resident "Paul Harvey"
Tim after reading all the posts today on all the articals I would say to you brother........fing right on.........."now good day".
Doctor Right| 1.9.13 @ 7:33AM
More wishful thinking from TASOnline.
I don't know if Conservative-oriented journals suffer from group psychosis or if there writers are simply clueless. The bottom-line is that most of them have no idea who they are dealing with, on both sides of the aisle, even after 4 years of Obama and 2 years of John Boehner.
Obama's second term will make his first term look like a garden party. No longer moored even by pretense to fealty to a Constitution he despises, and free from concerns of re-election, Obama will use his newfound "flexibility" to impose ever more socialism and redistribution upon the US. He's doing exactly what he said he wanted to do - transforming America.
On the other side, the clueless, feckless, gutless GOP still plays this game as if their opponent has any regard for the rules.
To that end, don't expect ANY "wins;" Boehner, McConnel, etc, don't know who they're dealing with, and have no stomach for a fight.
The goal is not to look for "victories" that advance Conservatism; that's not going to happen. The goal is to use every trick, every effort to stop Obama's agenda. That's it.
Let's stop fantasizing, and face reality.
CJW| 1.9.13 @ 8:26AM
I agree. Obama is out to increase the power of the federal government in all areas. He is not interested in reducing entitlements or spending because that would weaken the power of the government.
Writers and most Reps still view Obama as a traditional politician, like Clinton, with whom they can negotiate and settle.
Obama's end game is to increase the fed government's power, and destroy and weaken all institutions, such as religion and families, between that govenrment and individual.
He is an Alinsky commie. The only chance to slow him is to obstruct every bill proposed by Obama and refuse to fund his projects. The Dems did this in 1974 when they refused to fund the war in Vietnam, but they has a super majority in Congress and were able to override Ford's veto.
We have only the House and the conservative media.
Al Adab| 1.9.13 @ 8:39AM
This has been a long time coming, the battle of generations. Sad to see the emasculation of Americans as their dependence upon government pottage has increased. They, a once proud, brave people (home of the brave) have become a fearful hopeless group.
Doctor Right| 1.9.13 @ 9:30AM
Yikes.
Unfortunately, you're right.
In a related vein, I remember waaaaaaaaay back in 1998, sitting in a movie theater with my wife and watching the horrific opening scene of "Saving Private Ryan."
After the movie, I remarked to my wife that in my opinion, our nation no longer had the courage to withstand such a crisis. And that was in 1998!
11 years after 9/11, I fear we've reached that point.
Arnie| 1.9.13 @ 1:56PM
Yes, Saving Private Ryan, that American movie that failed to show all the other allied nations that had been fighting the war for years before D-Day, and only focused on Americans. How American centric. What a piece of shit film.
Doctor Right| 1.9.13 @ 3:26PM
I'm sorry, but how assinine are you?
"Saving Private Ryan" is a story about American soldiers on D-Day; WHY would it discuss anything else, or anyone else but that???
If you want to make a movie about the Brits getting chased out of France, or the Canadians getting skunked at Dieppe, go ahead! Write the script, raise the money, and direct the film, genius.
As far as the "other allied nations" are concerned, sure, they'd been fighting for a few years before the US got involved, and they'd been getting their asses kicked, too.
Without Uncle Sam, you'd all be speaking German today and you know it - and that's what makes you mad.
But don't worry; next time you idiots get invaded, you're on your own. Have fun with Sharia Law, Arnie...
Arnie| 1.9.13 @ 4:27PM
Hey Doctor Dumbass, how many landings were covered by Americans on D-Day? 2 out of 5.
The other 3 were covered by the Brits, Canadians, and Free French.
And you might want to consider the Russians that had been fighting and kicking German ass for several years also. Anyway, my point is that there were a lot of other players on D-Day, and Saving Private Ryan didn't even allude to them.
GobBluthe| 1.9.13 @ 5:21PM
The Russians had been fighting the Germans for 6 months prior to US entry in to WW2. They also survived 1941-42 on aid from the USA. Prior to that the USSR was a Nazi ally and attacked Finland.
A film maker you are not. Saving Private Ryan isn't about US military on D-Day or even the invadion itself. It is about a mission to retrieve and bring back the sole surviving son of an Iowa family. Bringing the UK or Canada into the film would have been pointless to the story.
JmsA| 1.10.13 @ 1:52AM
Let's do some math, shall we, Arnie? The Western Allies dispatched about 300, 000 Axis forces in North Africa in the spring of 1943, after defeating the Afrika Korps and the Italian Army; just short of 1/2 million German troops and most of their heavy equipment was lost in France after D-Day (7th/15th German Armies, etc.; at least a million Germans comprised the air defense system which defended Germany and German installations in Rumania (Ploesti), France (Brest, etc.); about 1 million Germans were stationed in Northern Italy by the end of War in 1945, not including their losses at the hands of Americans, Brits, Free Poles, etc.; at least 3-4 German divisions were stationed in Yugoslavia fighting partisans; there we troops also stationed in Denmark, Greece, Norway, and Holland.
JmsA| 1.10.13 @ 2:04AM
Cont'd.:
Can you imagine if the Germans had not had to concern themselves with the impending threat from Britain and the U.S., and unleashed their full resources against Russia, not to mention their war industries being bombed 24/7 by the Brits and Americans, as the latter built England into a huge arsenal and monster to be unleashed upon them?
Following the defeat of the German 6th Army in Stalingrad, Charles De Gaulle was given the grand tour of that former battlefield by his Soviet hosts, who asked him what he thought of the Soviet's victory, and De Gaulle reportedly replied, and I paraphrase: It's simply amazing. Asked to expound by his hosts, who believed he was referring to their triumph of arms, De Gaulle simply remarked, it's amazing they, the Germans, actually reached so far. Had it not been for the Western Allies, and in particular the Americans, the Germans would have swallowed up the Russians.
JmsA| 1.10.13 @ 2:12AM
I, for one, believe it likely that had Hitler not been distracted by the overthrow of the pro-Nazi government in Yugoslavia, and commenced the invasion of Russia, as planned, on April 15, 1941, and been thus spared having to contend with the increasingly deteriorating Russian weather by the fall of 1941, as well as allowed his high command conduct the war, he would have captured Moscow, and won the war in the East. No one here, that I can recall has denigrated the contribution of the Russian people during the war, though some continue to do so insofar as America's efforts are concerned.
Ultimately, as well as thankfully, not withstanding the death, destruction, and desolation he wrought, Hitler's meddling prevented them from winning in the East.
"Saving Private Ryan" was simply an example of American selflessness and can do spirit; it had nothing to do with the rest of the Allies, whose efforts and contributions had been otherwise amply and duly acknowledged.
JmsA| 1.10.13 @ 2:39AM
And, if that above weren't enough, the greatest Soviet victories, including Stalingrad which commenced on the heels of the British led second Battle of El Alamein, from 10/23 t0 11/11/1942, was followed by Operation Torch by the Americans, beginning on 11/08/1942. The Soviet counter attack at Kursk in early 07/1943, roughly coincided with the combined Angl0-American invasion of Sicily in early 07/1943, and operation Bragation in Belorussia, commenced on 06/22/1944, roughly two weeks following the Normandy landings.
Pecos Pete| 1.9.13 @ 9:30AM
While I agree with Dr. Right, CJW and Al Adab above, Mr. Ferrara has outlined a solution ... if fiscal conservatives ever gain control of the presidency, and Congress.
File his comments and hope for sanity to return to the nation's voters; or, for after the collapse and chaos that awaits the disaster now underway.
CJW| 1.9.13 @ 9:48AM
Senor Pete
We cannot give up, we have to change the culture, and elect more conservative Reps, and in some areas more moderate and conservative Dems. At the local level we do have Reps governors and mayors, and even more moderate Dems, at least not the Alinsky Obama crowd.
I do not agree with some here who posted we should just elect Obama and the hell with it.
Doctor Right| 1.9.13 @ 9:59AM
That's NEVER going to happen if Conservatives continue to work within the confines of the GOP.
The GOP is a dead Party, led by men and women who lack the intelligence to understand what they're up against, and the willingness to take the fight to the enemy. And yes, I mean "enemy."
The Left looks at politics as just another form of warfare, and they play to win. Meanwhile, the GOP sticks to the "Gentleman's" handbook of political discourse and is constantly stunned when the Left lies to them and deceives them.
It is time for like-minded Conservatives to either form a new Party or become independents. By doing this, they can force the GOP apparatus to show their true colors by either working with us in a Conservative-oriented coalition, or by abandoning us in favor of the left.
Either way, the GOP is dead.
The choice is now.
For my part, I will never again vote for a GOP-establishment candidate. EVER.
CJW| 1.9.13 @ 11:39AM
You do not need a new party. Just take over the Rep party by running conservatives/libertarians in local, state, and national elections. The last "new party" was the Republican party formed as the anti slavery , abolitionist party from the remnants of the Whigs to oppose the Democrats.
Al Adab| 1.9.13 @ 11:47AM
W, Dr. Pete:
There is the question for us as it has been for Conservatives since the beginning. Do we continue to use the GOP as our chosen vehicle or do we strike out on our own and attempt to rebuild a separate identity?
Buckley, Goldwater and the other founders built on the old republican conservative tradition. We need to examine anew whether or not that method is still viable. Would a Conservative party split the vote three ways thereby guaranteeing the ongoing election of Democrats far into the future or would it eliminate the GOP (Christian democrat party) take its place and build a new consensus?
While I know my heart and know the question, I fear I do not know the answer.
Doctor Right| 1.9.13 @ 12:03PM
I don't buy the idea that a Conservative 3rd Party would by default hand more elections to the Democrats for the simple reason that the GOP is already losing those elections.
I cannot give my allegiance to a Party that does not support my principles, and the GOP has abandoned Conservatism.
CJW| 1.9.13 @ 12:44PM
New York state has a Conservative , Liberal, Republican, and Democratic Party.
Pecos Pete| 1.9.13 @ 1:51PM
Al: Excellent question.
I believe a national 3rd party that is truly a small government party, call it what you will, is the only near-term solution to our current quandry. There are literally too many entrenched RINOs (really democrats, but there are not enough jobs to share out, so they claim to be republican) that will backbite, sabotage and prevent a conservative revolution within the Republican party at the national level.
On the other hand, true Conservative Republicans can and currently are, having real impacts at the state and local level where national party RINOs do not have any control. I support these efforts.
One could argue that ultimately the state Republican Party organizations will have enough power to control the national republican party. This will take time, many years.
We need conservative national leaders now. There are some (e.g., Sen. Ted Cruz, Rep. Tom Cotton and a few others). There simply aren't enough of them to affect the whirlpool of insanity now gripping the national capital.
Just my thoughts.
Al Adab| 1.9.13 @ 2:33PM
...and those thoughts my friend are well worth consideration. Don't forget Linda Martinez.
CJW| 1.9.13 @ 3:12PM
Look at the Dems as an example. The lefties have taken over the Dem party, and there are no more tax cutters like JFK, or pro lifers like Governor Bob Casey, or strong defense types like Sen Scoop Jackson. It is the McGovern party of acid, abortion, and amnesty, or the purpie party.
The lefties took their time, did not care about principles, and took over the Dem party.
SUBVET| 1.9.13 @ 5:45PM
Term limits !!!!! I say Term Limits !!!!
cicero| 1.9.13 @ 11:02AM
While the intention is right, the analysis is wrong. The problem is that we keep looking to improve the programs. Any government program was made to be abused. Any of our doctor friends out there can tell us how badly Medicaide is abused. There are medicaide "clinics" out there that are are little more than pill dispensaries. The druggies tell the doc that they are in pain, and scripts for Xanax and other "pain" pills pop out. Medicaire is a little better. However, with the ever lowering reimbursement rates, to make the money our medicoes want, they have to see the old folks about once a week. (Exagerating for a point.) Unfortunately, the system is not working for either the medical profession, or the public. But it is wastefule, to the extent that about 1/3 of the money is dispensed fraudulently.
ADFC can only be reformed by limiting payments for one childd only, unless the father is deceased, and on the condition that the father is identified. To continue on the present course will only result in a proliferation of the Detroits, Newarks, etc.
Social Security can be saved simply by bring the benefits in line with the actuarial tables of today.
CJW| 1.9.13 @ 11:42AM
Cicero
Have you ever tried to resolve a subrogation claim with Medicare? I can resolve a subrogation claim with a private insurance company in less than five days. They tell me the amount, I make an offer, we negotiate and settle. The insurer gets it money pronto. With Medicare, you write a letter, and wait.....wait.... wait.....
Von Mises Jr| 1.9.13 @ 11:12AM
Wake up and smell the coffee. The Republican Establishment in DC sucks. It is just that the Democrat Party in DC sucks even more. Watch Pat Caddell's 35 minute explanation of the GOP Presidential campaign and the "fiscal cliff" deal and he makes clear that the GOP is the other wing of the Democrat Socialist Party.
They refused to present the truth in the election and then gave Obama even more than necessary in the tax deal. They funded the crony capitalist without blinking an eye. There is no other possible conclusion except they are in on the scam. http://www.breitbart.com/Breit.....-Explosion
With all due respect to Mr. Ferrara who I met at a TEA Party meeting, the answer is not the GOP in DC. It is all about to explode as Caddell predicts, or implode as I think a better metaphor. Perhaps the best thing that could happen is we get on with it. We can pick up the pieces and start over with the Grace of God.
PolishKnight| 1.9.13 @ 11:19AM
When Obama won the last election, the left revealed their true colors as they whooped and hollared (I even heard my neighbors doing so) and posted to blogs and even editorial pages:
Republicans can't win because they're the party of white males.
Underneath that racist and sexist jab is the ugly liability, and asset, that the left is largely a race and gender entitlement party. The right can try to tweak things here and there or win a few elections on luck, but as long as the left gets away with reverse Jim Crow to the benefit of their own electorate, they'll win elections.
The easiest thing the Republicans can do is make this an issue. Now. Or lose a few more and maybe raise taxes on the wealthy some more. If that's what it takes to wake them up, I'm all for it!
Who Knows?| 1.9.13 @ 11:52AM
“But at a minimum, they can start public education and organization now to promote such reform, and lay the groundwork for winning future elections on this basis.”
That’s funny, Peter!
In the race for the hearts and minds of American citizens, the left is light years ahead of the right. “Public education” has been “laying the groundwork” seemingly FOREVER, while the right has slept, and the “future” elections have already happened.
You, Peter, have many ideas. So what? Why, I even agree with them, and bow down to you in your obvious exceptional expertise in economics.
But, the majority of American voters don’t even know what an idea IS! They’re too busy going for the FEELING gusto, and long ago banished thinking as something only fools bother with.
They KNOW, once and for all time, that a beer (say) is what hits the spot! How you going to keep them down on the farm, once they experience Paree?
Yes---it’s the experiencing that gets them.
And, who, or what, experiences? For most people, for most of the time, it’s not THE MIND! Open the mouth, and let in the gross “food”, or what’s advertised as food. Feast the eyes on the latest electronic emanations from the glowing cathode ray tube---or, these days, flat screen TV.
Oh well. At least you, Peter, get to use YOUR free time to try to THINK through our problems, and offer YOUR solutions. Enjoying it?
Cynical Observer| 1.9.13 @ 11:57AM
It's time for a new party. The GOP has had many chances to reform ... it's not going to. Anyone who ever worked in DC will understand, that the GOP (and everyone of every political persuasion) is lost in dreamtime, where making last-minute deals is all that counts.
Washington is in a collective coma.
Reforming the GOP is like trying to reform the Communist Party of China. Vested interests are so entrenched, no genuine change is possible.
The time to do that is starting right now, rather than waiting for another dismal primary season and throwing up one's hands and saying "Who's the least worst of the lot?"
It takes time and grassroots work to set up new parties, recruit candidates (electable ones, please, we know people are being quoted out of context but we need people who are AWARE of that and don't say dumb stuff), raise funds, get on ballots and so on. That won't happen in any organized, useful way if we wait until the last minute.
Thom| 1.9.13 @ 3:26PM
I said after the 2008 election and well before the 2010 midterms that nothing would change as
long as the Marxist control one branch of government and that people should prepare to be
disappointed the day after the 2010 elections....
I said after the 2010 election and well before the 2012 election that nothing would change as
long as the Marxist control one branch of government and that those that didn't prepare for
disappointment after the 2010 election had better double down on preparing for what was to
follow.
I'll say now after the 2012 election…
We are still operating with the 2009 budget because the Republican controlled House of
Representatives won't pass a budget and follow the proscribed budget reconciliation process
with the Senate who won't even pass their own budget and thus breaks the law for which no one
is held accountable.
I'm real fond of this phrase, "an enduring weakness of democracy is its lack of accountability…". What happens when you live your life free of or among people who are free from accountability for their decisions and actions?
In a "democracy" the losing 49.99 % don't count if you play by "democracy" rules.
Bad things are coming because there is no accountability in government…and much of our
society at large.
cicero| 1.9.13 @ 3:55PM
CJW - My experience, for the most part, has been pretty much the same. The only govt bureau that seems to be on the ball is Social Security. They are only having problems because of the longer life expectancies of the current generation. But, they know their stuff, and get the job done without hassles.
As far as the private carriers, the health ins. guys are pretty good. The liability carriers, even Michigan's No Fault auto policy laws are fot draggers. Especially on 1st party claims (where the injured party's carrier has to pay his health care claims regardless of fault. But that is another story.
Lisa | 1.10.13 @ 8:53PM
I agree with this article. But, the tough part is getting the message out. Republicans have the ongoing problem of being effectively labeled as uncaring.