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January 7, 2005

Bush43: Midterm Policy Issues

(This is the first of a two-part commentary on politics and policy in 2005. Part Two, to be published next Friday, will be devoted to issues of national security and international policy.)

The political issues on the agenda for 2005 are many and varied, but conservatives may take comfort in the fact that a revitalized executive branch and a Republican-controlled Congress with larger majorities in both houses will be leading the charge. The political establishment – Republican and Democrat alike – will feel increased pressure to move forward with (or beside) a bolder, fast-paced conservative agenda. This week’s column, Publius’ first for 2005, is offered as a summary of the political prospects for the coming year – a year that we cautiously hope will go down as a hallmark in the restoration of constitutional governance.

Last year this column concluded that the two greatest domestic issues confronting the American republic are the ideological character and legislative tendencies of the judiciary and the pressing need for comprehensive tax reform.

Regarding the makeup of the federal courts, those Senate Democrats who would attempt to deny this President his constitutional right to make judicial appointments may want to think twice. Indeed, they would do well to remember that November’s Republican gains were made at the expense of ex-Minority Leader Tom Daschle, ousted almost exclusively upon the basis of his party’s unprecedented obstruction of judicial nominees and other business vital to the national interest. The man who vanquished Daschle, Republican Senator John Thune, agrees: “This going from 51 to 55 is not inconsequential. I think it will hopefully change the psychology of the Senate.” As do we.

Thune’s anticipated awakening in the upper chamber won’t come a moment too soon, as 2005 is setting up to be a bumper year for Senate confirmations. First among them will likely and lamentably be the replacement of Supreme Court Chief Justice William Rehnquist, accompanied by the separate and equally vital confirmation debate over who among the existing Justices will fill the office of the Chief.

Regarding tax reform, Patriot 04-50 ( concluded that the so-called “FairTax” system should command the attention of the Congress. Ideally, it would eliminate not only payroll withholding but the IRS as well. In doing so, it would replace the federal income tax with a national sales tax on all but essential goods and services. The FairTax holds great merit and deserves serious consideration by the Congress. Nevertheless, rumors abound that tax reform may remain on the legislative backburner until 2006, when election-year pressures and growing public support could give the plan the support it needs to overcome fierce opposition from the Left.

Elsewhere, set to take one of several center stages in 2005 is tort reform, an issue the President has advocated since he was Governor of Texas. The sweeping measures that Republicans have in mind could bring extensive changes to the legal system. Proposals include a $250,000 cap on so-called “pain and suffering” awards and pushing more class-action lawsuits into the federal courts. Here, as opposed to state courts, higher standards for bringing lawsuits apply – and more reasonable settlements usually result.

Advocates for tort reform believe the time for change has come and that public opinion is behind them. In Congress, the House is definitely on board, having consistently passed legislation aimed at limiting lawsuits in recent years. In the Senate, however, the majority that backs the President’s proposals is not quite large enough to overcome an anticipated filibuster from the Demos, whose campaign coffers are lined with the ill-gotten gains of trial lawyers.

Opponents of tort reform hope to frame the issue in the same fashion they use to oppose Social Security reform. Per the standard Demo playbook, they’ll accuse the President of giving the false impression of a crisis but, by their actions, will perpetuate one themselves in which lawsuits will continue to spin out of control with a further adverse effect on the economy.

Regarding Social Security, we’ve heard for years from politicians of all stripes that the program is in crisis. Now President Bush and the Republicans are actually in a position to do something about it –namely, allowing younger workers to invest part of their Social Security tax money in private investment accounts. Of course, the Democrats, the AARP, the unions and their big-government comrades will work furiously to convince us that there is no Social Security crisis, and that we can kick this can down the road for another 10 to 15 years.

As we move closer to D-Day, when the Social Security reform legislation hits the floor of Congress for debate, ever more plans and suggestions are popping up to counter the White House initiative. Senator Lindsey Graham of South Carolina proposed raising the ceiling on taxes on Social Security earnings. And yes, he is a Republican. Other “moderate” Republican and Demo Senators, led by Olympia Snowe of Maine and Joe Lieberman of Connecticut, are looking to craft a bipartisan proposal that answers the concerns of both sides. Good luck.

All that is certain at this point is that the only successful outcome will be a plan that allows Americans to plan for their own future without bankrupting either the citizenry or the federal government.

Social Security reform notwithstanding, many have long considered Medicare the true entitlement beast to be slain. The Financial Report of the United States Government for fiscal year 2004 reveals the Social Security deficit to stand at $12.5 trillion, an astounding increase of $810 billion over 2003. Medicare’s unfunded liability, however, is twice as large – $24.6 trillion – an increase of $9.6 trillion from the previous year. (To help put these other-worldly numbers in perspective, we would remind our readers that a trillion is a thousand billions, and that $24.6 trillion represents more than $80,000 for every man, woman and child in America.) According to economist Bruce Bartlett, Medicare “is on the verge of collapse. … [I]n just a single year the unfunded liability of Medicare increased by three-fourths of Social Security’s total deficit. Yet instead of talking about reforming Medicare, which is hemorrhaging money, we are talking only about Social Security, which is in sterling financial shape by comparison.” Worse yet, the Medicare drug benefit, set to take full effect next year, will make today’s hemorrhage seem like a paper cut by comparison.

To be sure, any discussion on domestic politics and policy without reference to their counterparts on the international scene will paint, at best, only half the picture. Indeed, the line between what is domestic policy and what is foreign policy is growing blurrier all the time. The decisions we make today with regard to tax and fiscal reform, the federal judiciary, tort reform and entitlements will have broad and far-reaching implications for national security, defense and foreign policy. If the Founders were idealistic in their belief that partisanship stops at the water’s edge, perhaps our present predicament is telling us to revisit that idealism – not so much in terms of our deviation from it, but rather how the alternative threatens the survival of the Republic.

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