Posts Tagged ‘House does not control government’

Public choice insights for the GOP

January 18, 2013

The Founding Fathers crafted well to establish a nation blessed with a limited federal government. By enumerating powers and by separation of powers they determined to the best of their abilities that the United States federal government would remain strong but limited, leaving maximum liberties to the people.

They had good reason to be confident in this endeavor. The people whom they represented in Philadelphia had demonstrated that they were, for the most part, self-reliant, courageous and lovers of liberty. Only influential minorities could disturb that spirit, and the Constitution was designed specifically to limit the influence of such aggressive minorities.

Unfortunately, as the population has expanded and as its composition has significantly changed, a slim majority of Americans are no longer self-reliant, courageous and lovers of liberty. That slim majority – that expresses its voice through the progressive movement – seeks to live off the produce of others, rather than itself, is risk-averse to an extreme degree,desiring government protection from the cradle to the grave, and worships at the altar of order rather than individual liberty. In a short sentence, the nation has gone to the dogs.

No constitution, other one of dictatorship, can protect a country in such circumstances. The 2012 elections has confirmed that a majority of Americans prefer big government to small government, prefer to receive transfers rather than to earn their own bread, and welcome the controlling influence of coercive government. That will be the inevitable path over the coming four years.

The key public choice insight that the GOP should recognize, if it is to bend rather than to break, under the onslaught of progressive politics between now and 2016, is that it cannot govern the country from the single leg of the House of Representatives. That leg is surely sturdy, but it is dwarfed by the huge leg of the imperial presidency, especially when supported by the third leg of the Senate. Newt Gingrich bloodied his own nose and weakened the House during the Clinton administration when he shut down the government. Rightly or wrongly, American-majorities support the president in such encounters, especially when the president can focus fiscal damage onto the most vulnerable sectors of the population.

So, if the GOP refuses to increase the debt ceiling in a month or so’s time, allowing President Obama to shut down social security checks, medicare payments, and military pay, while the stock market crashes, the GOP will lose the House in 2014, will lose its filibuster-minority in the Senate, and fiscal mayhem will ensue. No fiscal conservative should endorse such an outcome.

A second public choice insight is that the House of Representatives can limit damage by blunting but not blocking progressive policies. The approach should be one of aiming for small losses while retaining public support to the extent possible.

For example, the House should offer Obama a limited debt increase, lasting say one year, in return for the Senate writing out its first budget in several years. The offer would be difficult to reject by a president who seeks to build a reputation, and yet would force Democrats to disclose their own policy preferences. That is is smart policy.

A smart response to the upcoming fiscal cliff resolution, would be for the House to reformulate the spending cuts, to ameliorate the severe impact on the defense budget, by offering small phased-in increases in the age of eligibility for medicare and social security, while endorsing changes in inflation-linking. Since tax revenues must eventually rise as a percentage of gross domestic product in order to achieve sustainable budget balance, sweeten the pill by recommending cuts in corporate tax expenditures while lowering the rate of corporation tax. The tax recommendations would not be tax neutral but would be designed to increase total revenues. Again, a reputation-conscious president would reject such an offer at a significant political cost to his party.

Think smart and recognize temporary weakness. That is the recipe for political recovery with respect to the budget. On other matters, especially where over-reaching progressives are pushing the popularity envelope, use the veto power provided to the House. Keep an eye always on 2016. By then Obamacare will have shown its enormous structural weaknesses, and the machinery of government will be up for grabs by a well-organized conservative party.



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