NCPA - National Center for Policy Analysis

What the Election Means

December 28, 2010

As Newsweek declared on its cover in February 2009, "We Are All Socialists Now."  Under President Obama, federal spending has increased 25 percent, the national debt has swelled to almost $15 trillion and health care reform will control 17 percent of the U.S. economy, says Pete du Pont, chairman of the board of the National Center for Policy Analysis.

The American people didn't like what they saw, so voters changed much of America's leadership.  They increased the number of Republican senators by six and House members by 63.  So a new Congress with very different thinking will arrive next week.  We have already seen substantial changes in the lame-duck session of the past few weeks, says du Pont.   

  • First, the Bush tax cuts were extended for all taxpayers.
  • Second, Republicans stopped the budget-busting and earmark-filled omnibus spending bill that the Democrats wanted to pass as their last spending hurrah.
  • The same week, a federal judge in Virginia declared portions of ObamaCare unconstitutional.

There are many goals at the center of the new congressional thinking.  One of them, averting a tax increase, has been achieved.  But the need for reforming the tax code by making the current lower tax rates permanent, simpler and fairer, would be an important next step.  A flat tax is the best goal.

Three more goals are important:

  • Getting government spending under control is the first. Since the end of World War II, average annual government spending was 19.6% of gross domestic product, but it is now 24% to 25%. Rolling it back to the 19 to 20 percent range should be the Republican goal.
  • Second comes reducing the huge increases in government regulation. The Waxman-Markey "cap and trade" bill, which the House but not the Senate passed, would have regulated wages, corporations, states, cities, lights, houses, snowmobiles and on and on.
  • The third goal is amending ObamaCare to get the government out of health-care regulation.

These changes are the public policy goals for the new House of Representatives, but probably not of the Obama administration.  So the battle that begins next week will be the most significant change in public policy discussions in several years.  And we can be sure the new Republican House and Democratic Senate won't agree on much. House Republicans have their work cut out for then in 2011. Their New Year's resolution should be: "Let's get to it."

Source:  Pete du Pont, "What the Election Means," Wall Street Journal, December 27, 2010.

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