The presidential campaign has come down to two rival ideological visions for the United States. John Kerry wishes to create a middle-class entitlement society, where the government offers free health care, child care and college tuition to tens of millions of working-class Americans. He offers America, in a sense, the mythical and alluring free lunch.
How will Republicans combat this demagogic, socialistic vision of government as the central force in our lives?
The answer is to offer a countervision with bedrock American principles of freedom, opportunity, and prosperity as a higher and nobler goal. America is not Europe — nor should it be.
President Bush lately has spoken eloquently of his desire to create what he calls “an ownership society.” He wants to pursue policies that expand home ownership, stock ownership, and new business creation. In a sense, Mr. Bush wants to create in America a nation of capitalists.
It is hoped that as Americans become shareholders and owners of wealth, they will become less dependent on government. That is precisely why the left is agitated and desperate to win.
The White House has unveiled this attractive, pro-growth vision of 21st century America, but has refused so far to describe in all but broad-brush strokes the actual policies that would advance the ownership society.
Mr. Bush needs to do so for two reasons:
- Laying out a conservative economic agenda is the best way for the president to solidify and energize his conservative base of voters. Karl Rove has spoken many times of the fact some 4 million to 6 million conservatives did not vote in 2000, which caused a perilously close election. Conservatives might wonder if a Bush victory is a conservative victory at all if there is no mandate for an economic agenda that promotes freedom and prosperity and smaller government. Mr. Bush is seeking an electoral mandate to do … what exactly? Presidents’ second terms are normally far less successful than their first, and the Reagan and Clinton presidencies are stark recent examples.
- Mr. Bush needs a mandate to succeed legislatively in a second term. Without an agenda, there is no mandate.
So here are five ideas for the Bush campaign that would excite conservatives and advance the an ownership society:
- Bury the Internal Revenue Code and advance a flat-rate consumption tax. There is no more self-defeating obstacle to prosperity than our antiquated and unnerving tax code. All around the globe, from Russia to Estonia to Hong Kong, flat taxes are taking hold. Mr. Bush is taking baby steps toward getting us to a flat tax — by cutting dividend and capital gains taxes, lowering income tax rates, and phasing out the death tax. But why not end our tax system’s tyranny in one fell swoop? A Steve Forbes postcard style flat tax would be rocket fuel for our economy. Why not end the failed income-tax experiment entirely and have a national consumption tax, paid half by businesses and half by consumers? The consumption tax would do away with tax forms, would benefit our manufacturers and domestic producers, would maintain worker financial privacy, would make April 15 just another day of the year and would end the modern day Spanish Inquisition in America: the Internal Revenue Service.
- Offer young workers private investment accounts for Social Security. Every worker in America should be permitted to put aside as much as half of his payroll tax payments into an individual retirement account (IRA) privately owned by the worker himself. These private accounts, according to economist Peter Ferrara of the Institute for Policy Innovation, would earn workers about 2 to 3 times higher returns on their money than what Social Security promises — and Uncle Sam almost certainly won’t even be able to keep those promises.
Voluntary private accounts for Social Security would leave tens of millions of young workers with a golden entry ticket into the ownership society. Perhaps 80 percent to 90 percent of Americans would instantly enter the shareholder society. This plan would essentially privatize the largest federal program.
- Muzzle the trial lawyers. Baseless lawsuits are to America’s economy what termites are to wooden homes. They deter economic growth, slow innovation and raise prices of almost every product we buy from health care to jungle gyms. The Manhattan Institute in its brilliant report “Trial Lawyers Inc.” estimates the net annual cost to Americans of frivolous lawsuits now approaches $500 billion. Americans now pay the equivalent of a 5 percent trial lawyer tax on every good and service they purchase today. Health care costs are inflated by about twice that amount thanks to medical malpractice suits that benefit a few patients who win the lottery and the trial bar that earns hundreds of millions of dollars on other people’s misfortunes and then funnel a share in the form of campaign contributions to left leaning Democratic candidates.
Tort reform would put caps on judgments, the end of joint and several liability where a firm that is only 5 percent responsible for an injury must pay as much 100 percent of the damages, reasonable caps on legal fees in cases where the government is the plaintiff, and “lawyer free” products where consumers can buy products at cut rate prices, by waiving the right to sue.
- Restore budget discipline. We need a new budget act in America. President Bush has been an abject failure at controlling federal expenditures, partly because our budget process rewards spending and discourages economy. A new budget act that includes line-item veto power, a tax and expenditure limitation measure, supermajority vote requirements to raise taxes, and sunset provisions on government programs would help restore a modicum of fiscal restraint in Washington. Congress needs to be put in a fiscal straitjacket that will help lower deficit spending, keep interest rates low, and free more resources for private sector spending.
- Offer school vouchers to create an education that truly “leaves no child behind.” The evidence continues mounting that school vouchers, charter schools, opportunity scholarships and other measures that offer parents and students an exit strategy from the monopoly public school system can raise academic achievement in profound ways. America simply cannot compete and win over the next 20 years against the Chinese, the Indians, the Russians and the Europeans if we are condemning kids to a second-rate learning experience. The issue of school choice is not just one of educational excellence but of promoting civil rights to black, Latino and poor white children sentenced to failing inner city schools.
President Bush proposed vouchers in his 2000 run for the presidency, but dropped the idea when Ted Kennedy howled in protest. This is not a time to retreat, but to create millions of exit scholarships that will allow admittance to high-performing schools for those who wish to leave the government warehouses for children.
The left’s strategy to win the election of 2004 is to seduce voters with free government services and confiscatory taxes on the rich that will very soon reach deep down into the pockets of the middle class. They see America as an extension of the socialist nations of Europe. As Democratic strategist Stan Greenberg has argued many times, Democrats can win by extending the ruinous welfare state programs of the 1960s to the vast middle class.
Mr. Bush can counterattack against the dependency culture with his quest for an ownership society with a program including federal budget control, opportunities for better schools, better retirement options, better health care and a less oppressive tax system. He must lay this plan out during his acceptance speech for the Republican nomination.
The nation, but especially conservatives, will be listening, Mr. President.