The New Face of Conservative Reform

The YG Network unveils its case for economic growth via "conservative reforms."

Republicans looking for a governing agenda if they take control of Congress in November's election—or presidential candidates looking ahead to 2016—will want to take a careful look at Room to Grow, a new electronic book issued by a group called the YG Network.

For the rest of us, the document is a useful marker of where the domestic policy debates stand for a certain network of center-right policy intellectuals—Yuval Levin, Peter Wehner, Ramesh Ponnuru, James Capretta, James Pethokoukis. They are affiliated with think tanks like the American Enterprise Institute, the Manhattan Institute, and the Ethics and Public Policy Center and with publications like National Review, National Affairs, and Commentary. They have close ties to Republican politicians like House Majority Leader Eric Cantor, House Budget Committee Chairman Paul Ryan (two of the "young guns" that give the YG Network its name), and to Senators Marco Rubio and Mike Lee.

There is much to like about Room to Grow.

The best part is the introduction by Levin, who describes an approach to domestic policy based on the insight of Friedrich Hayek that knowledge is dispersed.

Levin writes of what he calls a "bottom-up, incremental, continuous learning process, rather than imposing wholesale solutions from above."

He writes of three steps: "experimentation (allowing service providers to try different ways of solving a problem), evaluation (enabling recipients or consumers of those services to decide which approaches work for them and which do not), and evaluation (keeping those that work and dumping those that fail)."

Also valuable are the portions of the book devoted to building on the Clinton-Gingrich welfare reform of 1996. The book recommends changing federal anti-poverty programs such as Medicaid, food stamps, and the Earned Income Tax Credit so that they no longer penalize recipients when they get married. It speaks of giving state and local governments the option of adding time limits and work requirements in the style of the 1996 welfare reform to other benefit programs, such as food stamps, Medicaid, and subsidized housing, or of possibly consolidating these and other federal anti-poverty programs.

The energy chapter of the book includes a paragraph urging policymakers to keep in mind the concerns about the use of eminent domain by private companies building oil and gas pipelines. Those property rights concerns are often neglected by conservatives in their pursuit of the jobs and national security benefits of the pipelines.

Other sections of the book, and even some overall themes, seem potentially problematic. The document portrays an obsession with the "middle class." The subtitle of Room to Grow is "Conservative Reforms for a Limited Government and a Thriving Middle Class." The words "middle class" appear more than 100 times in the document, and if one includes euphemisms like "middle America" or "middle-income," the number climbs above 200. On page 80 of the book alone, the phrase "middle class" appears six times. On the same page, there are five sentences in a row, four of which contain the words "middle class." This emphasis is not accidental. It is deliberate. An introductory essay by Peter Wehner contends "The middle class is America's center of gravity." It's nonsense worthy of Senator Chuck Schumer (D-N.Y.). It divides America into economic factions rather than uniting us, and it fails to provide any useful response to left-wing demagogues who blame all of America's problems on the rich (and who think raising taxes on the rich is the solution to those problems).

Tax-wise, the report eschews advocating for further reductions in marginal tax rates, proposing instead an expanded child tax credit, possibly paid for by increasing to 35 percent the rate on income currently taxed at 25 percent.  "Some supply-siders will reflexively cringe at this idea," the report concedes. Though the book carries cover blurbs from supply-side giants Lawrence Kudlow and Grover Norquist, count this columnist as one supply-sider who is, as predicted, cringing at the idea of slapping an income tax increase on childless individuals for the express purpose of redistributing the funds in tax breaks for those with larger families.

Another cringe-worthy idea the report backs is a congressionally funded "social marketing campaign" to encourage young adults to follow a "success sequence," namely, "finish school, get a job, marry, and have children—in that order."

A short list of those who got a job before they finished school—Steve Jobs, Michael Dell, Bill Gates, Mark Zuckerberg—renders this advice questionable, at best. And the expanded child tax credit the book proposes in the tax chapter is likely to undermine this "success sequence," which sounds suspiciously like one of those "wholesale solutions from above" that Levin so perceptively warned about in his introductory essay.

It's a reminder that in the public policy game, "wholesale solutions from above" are a bipartisan temptation, notwithstanding even the best intentions to the contrary.