Today the Republicans will take control of the House and at least de-facto control of the Senate, dealing with the economic and fiscal crises they campaigned against in the 2010 midterm elections.
The Obama economy remains lethargic, badly weakened by a lackluster 2.6 percent growth rate that the Fed calls “disappointingly slow.” The crisis-level jobless rate has climbed in the last month to nearly 10 percent, creating barely 39,000 jobs in November. The deficit continues to spiral higher, heading toward $1.3 trillion at the end of this fiscal year, after $1.4 trillion last year, with the federal debt pushing relentlessly to $14 trillion.
Anxious Americans are looking for answers and actions from the incoming Congress that will fuel stronger economic growth, flatten the unemployment rate, and slow the meteoric rise in government spending.
But as the lame-duck Democratic Congress mercifully comes to an end, House and Senate Republican leaders are preparing their legislative agenda for the coming year, though disclosing few if any details about what their reform plans will contain.
“In short, the Pledge is the plan,” House Republican spokesman Brendan Buck told Human Events. “This fall we laid out our Pledge to America, an agenda that reflects the people’s priorities: creating jobs, cutting spending, and repealing the job-killing ObamaCare law. Without tipping our hand too early on tactics, those will be our priorities in the new year.”
But senior Republican officials say their No. 1 policy priority in the New Year will be the No. 1 issue that toppled Democrats from power in the House and added six new Republicans to the Senate: Getting the economy growing at a much faster pace and creating jobs.
The across-the-board, two year tax rate cut extension Congress passed this month — extending President George W. Bush’s tax rate cuts on incomes, capital gains and business write-offs will help to some extent. So will the one year, two percentage point payroll tax cut for all workers.
But these still remain temporary, extending the same uncertainty that has kept businesses from making long-term investments in the previous two years.
It will be up to Republican leaders to build upon this stop-gap tax bill with broader, permanent, more far reaching tax cut incentives to create new start-up businesses, jobs and faster growth. Among some of the ideas being put forward:
Deficit -Neutral Tax Cuts: Reform the entire U.S. tax code by eliminating dozens of special interest tax breaks and loopholes that broadens the tax base and allows Congress to lower the income tax rates, including a top rate of 28 percent for people and businesses.
- Extend the two percentage point worker payroll tax cut to every employer to make it financially feasible to hire more employees.
- Enact a 20 percent cut in small business income taxes, and a lower minimum wage youth differential to boost employment among lower income, unskilled workers.
Spending Cuts: Eliminate the deficit in five years by 20 percent a year through a combination of increased tax revenues from higher economic growth, nondefense spending cuts, program eliminations, privatizing commercial government enterprises like Fannie Mae and Freddie Mac, banning earmarks, and freezing pay raises and federal hiring.
Controlling entitlements must also be a chief focus of Congress’s efforts to reduce spending and shrink the government’s debt. But fixing Social Security and Medicare will take much more time because of enormous political obstacles to overhauling what have become the Holy Grails of government.
Nevertheless, Congress must now begin exploring the many options to reforming these programs — including a shift to private retirement and medical care accounts — before their costs engulf our economy and plunge our country into irretrievable and unaffordable debt.
Trade Expansion: Enact job-creating trade agreements with South Korea, Columbia and Panama, restart fast track negotiating authority, and work out new trade agreements that will open up new markets for U.S. goods and services in the global economy.
End OffShore Drilling Moratorium: The administration’s moratorium on offshore drilling have cost U.S. jobs throughout the oil industry, driven up the cost of oil and led to higher gasoline prices at the pump. Ending the drilling ban will create jobs, reduce gas prices and help boost economic growth.
Regulatory Reduction: Republicans on the House Financial Services Committee are already combing through the Dodd-Frank Wall Street Reform and Consumer Protection Act in preparation for repealing regulatory takeover provisions that would put taxpayers on the hook for bailing out bankrupt financial firms.
“We’re looking at it provision ny provision,” Rep. Spencer Bachus (R-Ala.), the incoming committee chairman, told the Washington Post. Under the “resolution authority” granted under the Dodd-Frank law, that allows the FDIC to take over failing financial firms, “you’re talking about billions of dollars” in taxpayer bailouts, Bachus said.
Plans are now underway to reexamine all of the administration’s regulatory initiatives that Republicans say have imposed new job-killing costs on businesses from manufacturing to healthcare.
Since the enactment of ObamaCare at the end of 2009, healthcare costs have risen through the roof along with insurance premiums, as businesses have reduced health care benefits and cut payrolls.
Repeal and reform of ObamaCare is also at the top of the GOP’s 2010 agenda, including an end to the federal mandate for uninsured individuals to purchase health care plans of their own.
The common denominator in the GOP’s economic agenda is to boost economic growth to between 4 and 5 percent which will bring down unemployment rates, raise incomes, boost stock and home values, and significantly increase government revenues that will help shrink the deficits and eventually balance the budget.