How to tell if the GOP is serious about shrinking government.
Assessing the Republican electoral sweep on Washington's Fox Morning News November 10, Texas Sen. Phil Gramm said voters "didn't send us here to raise taxes half as much as Bill Clinton, increase spending half as much as Bill Clinton, or increase regulations half as much as Bill Clinton." Gramm will try to set himself apart from other presidential contenders with an unapologetic, fiscally conservative agenda. But will Gramm's stances position him at the center of his party or on its fringes? Here are several issues the Republicans must confront if they want to be considered serious government cutters:
• Tax fairness. Rep. Dick Armey, the likely House majority leader, wants to replace the current loophole-ridden Internal Revenue Code with a 17-percent flat-rate tax and allow large standard exemptions. Armey's plan would end the use of the tax code as a tool of income redistribution and behavior modification and would restore its appropriate purpose—raising money to operate the federal government.
Armey's tax revolution won't happen overnight. But Republicans could simultaneously fulfill one plank of their Contract With America and launch a preemptive strike for Armey's tax crusade by cutting the tax on capital gains to 17 percent and indexing the gains so that inflation doesn't penalize persons who hang onto their investments.
• Budget reform. Since 1974, Congress has used "baseline budgets." The Congressional Budget Office projects how much federal agencies will spend over the next five fiscal years, building in increases. When spending rises by less than the CBO projects, Washington insiders declare that a spending "cut."
For the past five years, Rep. Chris Cox (R-Calif.) has called for an end to baseline budgeting. Instead, he wants Congress to prepare a one-page budget spelling out how much the government can spend in each of the 19 budget categories. If Congress spends more money in one category than the budget allows, the president can rescind spending until the target is met. And when the budget is up for renewal, if Congress doesn't pass an appropriations bill for an agency, that agency can spend only as much as it did the previous year.
Incoming House Speaker Newt Gingrich promises an end to baseline budgeting. Cox's proposal would further brake spending growth.
• Spending cuts. In 1993, Ohio Rep. John Kasich and Republicans on the Budget Committee proposed a five-year program that would cut $479 billion in spending from the president's budget. The Kasich plan would have abolished the Interstate Commerce Commission, halted federal land purchases for five years, and frozen cost-of-living allowances for military retirees younger than 65.
The Kasich plan offers a starting point for more dramatic spending cuts. Federal welfare programs offer obvious targets. Defunding the Corporation for Public Broadcasting and abolishing the National Endowment for the Arts and the National Endowment for the Humanities should also be no-brainers.
• Entitlements. Republicans will demonstrate their seriousness as budget cutters when they decide to confront or evade Social Security, Medicare, Medicaid, and federal pensions. Those programs, along with interest on the debt, consume half the federal budget now and will increase to nearly 70 percent within 10 years.
The Bipartisan Commission on Entitlement and Tax Reform will issue its recommendations in mid-December. Whatever the commission recommends, Republicans could build a bipartisan bridge by pushing to increase the retirement age gradually and immediately. Rep. J.J. Pickle (D-Tex.) proposes increasing the retirement age by two months a year indefinitely; this would make the retirement age 66 in 2001, 67 in 2007, and so on.
Unfortunately, in a November 11 speech, Gingrich said it would be a mistake to make any changes in Social Security before the turn of the century. The sooner elected officials tackle retirement programs, the less dependent those programs will be on tax dollars when Gingrich's generation retires.
• Regulations. One of the most innovative ideas of the 103rd Congress was the A-to-Z spending-cut program proposed by Reps. Rob Andrews (D-N.J.) and Bill Zeliff (R-N.H.). The plan would have let each member of Congress propose a single spending cut or package of cuts anywhere in the federal budget and then required the House to vote on each cut.
Democratic leaders prevented A-to-Z from getting to the House floor. But the A-to-Z format could be adapted for regulations as well. Why not have a "regulatory A-to-Z" that forces votes on, say, the auto-emissions regulations in the Clean Air Act? The Family and Medical Leave Act? The wetlands provisions of the Clean Water Act? The Endangered Species Act?
Regulations are the big test of whether Republicans are serious about reducing the size and scope of government. But Gary Bauer, Paul Weyrich, and other prominent social conservatives are pushing congressional Republicans to fill the legislative calendar with proposals to zap porn, bash gays, and outlaw abortions—in other words, to increase non-economic regulations. If Republicans want to become the majority party of the 21st century, they must recognize that getting Big Brother out of our wallets while inviting him into our bedrooms is no bargain.