Assessing last week’s surprise congressional victory of Florida Republican David Jolly, the Wall Street Journal’s Kim Strassel wrote: “The Republicans who will win this fall will be those who have a serious response to the attacks against them.” – regarding Obamacare, the economy, women and seniors issues.” Good advice.
A few weeks earlier, pollsters John and Jim McLaughlin argued that the Republican Party couldn’t rely solely on Obamacare, unpopular as it was, to win in November. More sound advice.
In particular, there must be a growth platform specifically aimed at the middle class, which continues to suffer in the fifth year of the so-called economic recovery, with real average income falling by 4 percent and widespread unemployment measured at around 12.5 percent. Believe it or not, a fresh Wall Street Journal poll shows that the expansive majority of Americans still believe we are in a recession.
So the challenge for the GOP is to perpetuate Ronald Reagan’s aged thesis that Republicans can enhance take-home pay or after-tax income. This does not mean forgetting about the Obamacare disaster, which, as many predicted, is fading in importance. The individual mandate is already dead. But this means the GOP must emphasize economic growth.
Fortunately, many of the party’s leading thinkers are already working on the topic of growth.
During the Joint Economic Committee hearings last week, Republican Party Chairman Kevin Brady talked about the “growth gap,” which describes the difference between Obama’s economic recovery and other average economic recoveries over the past 50 years. America has a shortfall of 5.6 million private sector jobs, according to Brady, and $1.3 trillion in real GDP coming from the economy.
Delivering his weekly GOP radio address last week, Senator Rob Portman of Ohio reminded us that 11 million Americans have become so discouraged that they have stopped looking for work altogether, and that while poverty rates have risen, the average family now lives on bringing home $4,000 less than just five years ago.
Last week, in an interview with Senator Marco Rubio, I heard some robust ideas for growth. For example, building a national infrastructure network of interstate pipelines – like Keystone – to accelerate the shale oil and gas boom. This building may include fast-track permitting for liquefied natural gas projects. As Republican Paul Ryan noted in another interview, an energy play involving the production and export of LNG would free Vladimir Putin from his energy death grip on Ukraine and the rest of Europe.
On corporate tax reform, Rubio wants all business investments to be immediately expended, as well as an end to double taxation of U.S. corporate profits made abroad. It also proposes greater tax relief for families with children and a refundable relief to cover payroll tax liabilities.
Paul Ryan, of course, is a longtime tax reformer. He also notes that even Rep. Dave Camp’s flawed tax reform plan was assessed by the Joint Committee on Taxation as adding $1,300 in annual take-home pay for individual families, growing the economy 20 percent more, and creating 1.8 million fresh jobs.
Ryan also criticizes the 50-year war on poverty, during which perverse incentives have “in many ways isolated the poor from the rest of America.” According to Ryan, we currently have “intergenerational poverty and people are trapped in poverty.”
Ryan says government programs have created huge barriers to work. For those trying to escape poverty, high marginal tax rates can enhance by 80 to 100 percent. This is the case with Obamacare, where CBO estimated the equivalent job loss to be 2.5 million. The same is true of other social programs, where those who try to climb the ladder of success quickly lose government benefits and may be pushed into a higher tax bracket.
This all needs to change.
Even more strangely, Ryan’s bold analysis and proposals to solve inner-city poverty were deemed “racist” by many left-wing bloggers and writers. This is crazy. The left continues to spend money on poverty, which is getting worse. But if the GOP tries to solve the problem with a fresh incentive structure, the left pulls the race card.
This stupidity aside, Republicans in Congress like Ryan, Rubio, Portman, Mike Lee, Ron Johnson, Eric Cantor and many others are working on growth plans to stop the economic stagnation, pessimism and defeatism of the Obama administration.
Let’s reward success, not punish it. As Ryan put it: “Here’s a vigorous program to create jobs, increase take-home pay and resume upward mobility.” As Rubio put it, pro-growth economic reforms will usher us into a “new American century.”
If Republicans stay on this reform path, they will win massive in November.
