What Should Republicans Do?

Having taken both houses of Congress, Republicans are eager to make changes. Here are some guidelines they should follow:

1. Learn from history.

At least since the Clinton administration, this country has suffered from a consistent pattern: First, one party takes the White House and Congress. Thrilled with the taste of power, they overreach, provoking a backlash. This allows the other party to soon take control of at least one house of Congress, leading to gridlock for the next several years.

Republicans can avoid this scenario. Instead of immediately trying to pass legislation that will please certain of their constituents, Republicans should propose changes that will build strategic alliances with a wide range of groups. That may mean an incremental approach to change, but each increment should be designed to make the next increment more—not less—politically feasible.

2. Focus on fiscal issues.

Part of the historic pattern is that Democrats win on social issues while Republicans win on fiscal issues. Whichever party is in power usually shoots itself in the foot by giving the other party ammunition on its winning issues. For example, Democrats’ obsession with government-run health insurance turned a social issue—poor people’s access to health care—into a fiscal issue. Republicans’ obsessions with abortion and gay rights give Democrats tools to bring them down.

Since tax and fiscal issues are what Republicans win on, they should stick to those issues. That means no introducing bills to limit third-trimester abortions, no proposals for constitutional amendments to declare that marriage is between a man and a woman, and no efforts to open the Arctic National Wildlife Refuge (ANWR) to oil drilling. Any of those efforts would give fiscal liberals the openings they need to retake at least one house of Congress in 2018 (if not 2016), thus restoring gridlock.

3. Fix incentives, not outcomes.

Nearly all of the problems with the federal government are due to poor incentives. It is incentives that determine what agencies do and whether they will be efficient doing it. In the long run, if the incentives are right, everything else will take care of itself (including a reduction in the size of government).

Unfortunately, members of Congress almost never think about incentives when they pass legislation—or when they do, they think about them the wrong way, as in “How can I create an incentive to produce the outcome I want?” Instead of worrying about outcomes, Congress should create a level playing field, with a minimal amount of regulation and subsidies.

4. Tread lightly on the environment.

We can have a cleaner, healthier environment without strict government mandates and regulation. One way is to protect the environment through better incentives. Without exception, environmental issues consist of resources that are not properly marketed (such as water or endangered wildlife) threatened by resources that are (such as minerals or oil & gas drilling). Too many people think the market resource is the evil, but the real evil is that some resources are not in the market. Creating markets for those resources will go far toward protecting them.

Treading lightly means not trying to force oil drilling in ANWR, not opening up public lands to more subsidized cattle grazing, and not declassifying wilderness areas to allow more fracking. Instead, let energy companies and other land users demonstrate that they can do a responsible job on lands that are less controversial first, then allow them to bid on doing the same (without subsidies) on public lands, while letting environmental groups submit bids to keep areas that they regard as critical closed to development.

5. End the war on drugs.

The war on drugs has been fought for more than a century with little success and much harm, as the United States has just about the highest incarceration rate in the world. Ending the war doesn’t mean letting school children take heroin any more than ending Prohibition let school children drink hard liquor. Nor does it mean imposing such high taxes on drugs like marijuana that people would continue to buy them on the black market. Since Prohibition ended more than 80 years ago, we have the experience of 51 sets of state and D.C. laws regarding alcohol, and we can pick the best of those and encourage states to apply them to drugs as well.

6. Give up on the war on illegal immigration.

After losing on abortion and gay marriage, immigration is the next social issue for Republicans to lose and Democrats to make hay. Considering that Latinos are one of the nation’s fastest-growing demographics, and that they regard a war on illegal immigration to be a war on their families, Republicans should reverse course. The economic truth is that immigrants have always added more to our economy than they take away, and by achieving the American dream for themselves, they create demand for more work for people who already live here.

Worries that immigrants will abuse our welfare system are just symptoms that the welfare system should be reformed, for if it gives immigrants bad incentives, it must also give American citizens bad incentives. Reversing course on immigration is not just the economically correct thing to do, it is also politically strategic because it will allow Republicans to regain the support of Latinos, many of whom hold conservative beliefs and should feel right at home in a Republican Party that doesn’t treat them as enemies of the state.

Conclusions

These suggestions presume that the people who will take charge of Congress next January are sincerely interested in the economic health and future vitality of this country, and not just in their own short-term political and economic prospects. That’s a strong assumption based on past behavior, but it's one I’m willing to make, especially with respect to many of the newcomers over the past four years who came in with fiscally conservative goals . If they follow these guidelines, the United States should return to strong economic growth, which in turn should support a healthier environment.