What Now?

Well, the  election is over. The Republicans gain a majority in the House and narrow the gap in the Senate.

In a rare foray into politics, I am going to make a few quick predictions.

1. Not much will change. Republicans have neither the political will nor the numbers to undo health care or to fix spending or to fix taxes. They can do it in the house, but not the Senate. And it is unlikely they could get 60 votes in the Senate to override a veto, and Obama will not veto his own health care bill. They don’t have enough influence in the Senate to change judicial appointments.
2. Congress will continue to spend without much restraint. We might see some very minimal and largely negligible decreases. We might see more cuts if Obama catches on (something he has not typically been quick to do; see next point). The overall budget will not decrease by the 8-10% that it needs to in order to remain solvent.
3. Obama will be looking like a moderate by 2012. Remember how everyone is saying this is 1994 all over again? I think it is. And remember 1996? Bill Clinton, having lost his house majority, began to work with Republicans with the result that he began to look like a counter to their “radical right” policies (which weren’t all that radical). With Republican insistence, they brought about some welfare reform and ultimately a budget surplus, all of which Clinton took credit for, and none of which would have likely happened were it not for 1994. If Obama catches on, he can move to the center and establish himself in the center as a counter to the Tea Party mentality. Hopefully, Obama continues to show himself deficient in catching on.
4. The Republicans will once again show themselves incapable of serious conservative government. We have seen this movie before and Republicans are arguers (just like Democrats are). And here’s the big difference between leaders and arguers. An arguer just likes to fight, and they are good at it so long as they have someone to fight against. But they can’t lead because they have no ideas. All their ideas are rejections of others people’s ideas. The Democratic leaders tend to be more philosophically driven and tend to play hardball more effectively. That’s how they got health care to pass. Republican leaders are more pragmatic (remember the huge deficit increases under Bush in spite of all the “fiscal conservative” rhetoric they spout). Anyone who voted yes on any of the last 20 budgets has no credibility when it comes to fiscal conservatism. The Republicans high point in the last twenty years was the time from 1994-2000 when they effectively reined in Clinton. They simply did not play the political game very well and Clinton used the bully pulpit to take all the credit for it.

So here’s what I would do if I were John Boehner: I would retire and go live on lobbyists money in the Caribbean where I could play golf every day. Because today is the easiest day of the rest of your life. It is all down hill from here.

But since you worked hard to be the leader, here’s the plan:

1. Immediately reinstate the Bush tax cuts for everyone making less than $500,000 a year. To cut taxes for people making more is unnecessary and politically risky. The $500,000 is higher than Obama’s, and the people from $250,000 to $500,000 are most likely to horde rather than spend, particularly if they are paying more taxes. People who make a million or more a year don’t think all that much about the cost of things. Include in this tax cut the rollbacks on capital gains, since almost every American is affected by that. Remember, the number of American with no capital investment is very small. Why? Because of 401Ks and IRAs. Anyone who has a 401K or an IRA is subject to capital gains. And the money that pays the increased capital gains tax comes out of their retirement ultimately, or out of their children’s education, or vacation, or something else. Capital gains tax is not a rich people tax. It is a working people tax. This should pass very quickly on a voice vote.
2. Address particular points of the health care bill. Here are three quick steps: (1) Remove the requirement for coverage, (2) allow insurance to be sold across state lines (and let people pick and choose how much and what coverage they want), and (3) allow all money used to pay for health insurance premiums to be pre-tax dollars. These are three simple and should be non-controversial items. They get you easy quick wins and paints objectors as “The Party of No.” A no vote or a veto on anyone of them can be painted as disastrous. How can anyone object to pretax dollars being used for health care premiums? It is a one line bill that should pass unanimously on a voice vote in time for 2010 tax filing (and save people a lot of money, myself included).
3. Establish an immediate precedent on spending cuts by addressing earmarks, as in banning them.
4. Begin serious budget talks with all parties involved. Enlist the help of state leaders from states which successfully cut spending in order to benefit from their experience and get outside of Washington. Live by a legitimate form of PAYGO.
5. Establish the precedent of having bills short enough to be read, so that people know what is in them. If you want to pass 1300 pages of legislation, do it in twenty or thirty separate bills.

Above all, be committed to showing that there is a real difference between the parties. Republicans cannot be just Democrat-lite. Remember that people didn’t elect Republicans because they like Republicans. They elected Republicans because they didn’t like the direction of the country. And while it was a significant gain in the house, it is not an overwhelming victory.

Be humble and be bold. Don’t forget why your party got elected. Because two years from now, it could happen again … the other way.