Thursday, October 16, 2014

What Republicans Should Do If They Win the Senate

Republicans are clearly favorites to retake the Senate. Based on current polling, they would pick up nine seats. It's time to start thinking about what an Republican-controlled Congress should do.

Those that have given it thought, and it's not many, seemed to either be focused on legislation that will make Obama look bad when he uses the veto (say, a strict border bill) or legislation that he actually might sign (e.g. piecemeal Obamacare fixes).

They are missing the bigger opportunity. There's a decent chance we will get a Republican president in two years. Why not pass a flurry of long-sought-after big ideas? Yes, Obama will veto all of them, but they will be "shovel ready" for a Republican president. All he (or she) has to do is pull them off the shelf and sign them. Imagine what a productive first 100 days it could be!

This sort of opportunity does not come around too often. I checked, and in the last 100 years, these circumstances have presented themselves only twice, for Warren Harding in 1921 and George Bush in 2000.

No one is talking about this. This could even become central to the Republican primary process - i.e., which bills would you sign? I only hope Boehner and McConnell don't completely spit the bit.
  So, what should Republicans pass? Here's my list:

(Starting with a big one)

1. An optional, alternative flat tax for all individuals and corporations of 20%, plus eliminate the estate tax. Optional so that all people who whine about losing, say, their mortgage deduction can still opt for the old, hideously complex system. However, when they see their neighbors filling out a post card and spending 5 minutes on their return and not paying an accountant thousands, they will quickly rearrange their lives to take advantage of the new system. The economic benefits would be breathtaking.

Here's the kicker: sunset the IRS in the same bill. Give it 5 years, by which point everyone will be expected to convert to the new system.

The Dems will howl about fairness, but everyone, of all political stripes, hates the IRS, and now we know it's corrupt, as well. There are no small fixes anymore. The only way to abolish it is to have a system that's so simple that you don't need a huge agency to oversee it. Roll responsibility for collections into some small Treasury division and call it something else. Five years also gives the 120,000 people who work at the IRS ample chance to find other work. Taxpayers will save the $11 billion it takes to run it (think of the irony of spending $11 billion in the name of collecting taxes).

This also solves the problem of crony capitalism, since the source of most of that is in the form of tax code exemptions. This angle will help sell the idea across the political spectrum. Also, wouldn't it be great to say, "Senator X voted to keep the IRS?"

2. Connie Mack's "Penny Plan." This requires the government to cut 1 penny out of every dollar until the budget is balanced. This might take 6 or 7 years. If Congress can't agree on where cuts should fall, then automatic, across the board cuts are mandated. Wonderfully simple and marketable. What household hasn't been forced to cut a penny in recent years? If we have to, the government should have to.
3. The regulatory state is out of control and has led to an unconstitutional shift in power to the executive branch. This must be stopped. Require all federal agencies to conduct a third party cost-benefit analysis on any proposed regulations. Any regulation exceeding a $100 million net cost to the economy would require explicit legislative approval.

4. Repeal and replace Obamacare. I won't write much about this one since it's well covered by others, but the "replace" part should include selling insurance across state lines and tort reform. As an aside, I get wild with anger when I hear Republicans like Susan Collins say things like, "we've moved passed" the idea of repealing Obamacare. Holy crap! If our Republican senators can't repeal a law that remains wildly unpopular, what in the hell can they do?

5. Approve Keystone. A no brainer - good for jobs, good for the economy, and a bonus: unions will like it.

6. Abolish Freddie and Fannie and all other government meddling in the housing market.
7. Dramatically increase the punishments/penalties for Medicare and disability fraud.
8. Make it legal for companies to hire interns under age 25 for specific, limited periods for no salary. (Not a huge one, but close to my heart.)

9. Get the Senate to pass the border bill that's already passed in the House.

10. Create an annual "Congressional Entrepreneurship Award." Who's creating the only jobs right now? Who's coming up with the new technologies that may be the only way we achieve enough growth to offset the $100 trillion in funded and unfunded liabilities we have? Entrepreneurs. And while politicians are constantly getting things named after them (for giving away other people's money), Hollywood types get a different awards show every week, journalists are feted with Pulitzers, academics with Nobels and a 100 other things, what kind of official recognition do entrepreneurs get? Nothing, and they take much bigger risks than anyone else as well. Guys like Elon Musk and Jeff Bezos might be the most important people in the world right now in terms of their lasting impact. Or how about Elizabeth Holmes, who has created a way to dramatically reduce the cost of a blood test? The prevailing wisdom is that these accomplishments are somehow sullied by the attendant remuneration. That's an attitude that must be changed, and governmental recognition would help.

Bonus round: one thing NOT to do, which is screw in any way with the internet.

1 comment:

  1. Scott ... This is a good starting Top 10 except I would much prefer The Fair Tax instead of a Flat Tax. A flat tax is still an income tax while the Fair Tax is a consumption tax where everyone has "skin in the game".