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July 14, 2006

The Demos’ New and Improved Lack of Direction

Conservative pundits have speculated for some time now that a Democrat takeover of Congress in November wouldn’t be the end of the world. Rather, they suggest, it would be a much-needed wakeup call for the current free-spending Republican majority. However, as election history shows, bad ideas from the party in power are rarely a sufficient means for returning a minority party to power. To the contrary, Democrats will need something they haven’t had a lot of in the past 50 years – new ideas.

Enter the Democrats’ “New Direction for America” platform – a platform energetically trotted out by the party leadership last month and apathetically received by the electorate. Unfortunately for Democrats, there’s really nothing new in this New Direction. Instead, it comes across as little more than a grab bag of decades-old liberal policies ranging from social concerns to economic entitlements, with a me-too attempt at addressing national-security issues.

House Minority Leader Nancy Pelosi’s portrayal of the New Direction leaves little doubt that it’s merely a reaction to the Republican majority: “Are you ready to take America in a new direction? … Have you had enough of a war that is failing to make America more secure? Have you had enough of burdening our children and grandchildren with billions in debt to pay for tax cuts for the wealthy? Have you had enough of paying higher prices for gasoline and prescription drugs in order to increase the profits of pharmaceutical and oil companies?”

If for some reason you haven’t yet heard enough about this prospective New Direction, here’s the breakdown:

On health care, Democrats want to increase general access – a substantial step toward socialized medicine – and negotiate lower prescription-drug costs for Medicare, as if the Republicans’ prescription-drug debacle wasn’t bad enough. On social issues, Democrats would renew federal funding for stem cell research and ensure access to “family planning” and abortion. In education, Democrats want to cut student-loan interest rates by half, increase spending for scientific research, ensure the teaching of evolution in public schools, and increase funding for community colleges and daycare.

Concerning national security, Democrats plan to rubber-stamp the recommendations of the 9/11 Commission, despite four years of serious debate as to which recommendations merited implementation and which didn’t. As the crowning glory of their plan of action, some Democrats finally agree that border security is a good thing. It’s such a good thing, in fact, that securing our borders, rather than continuing to take the fight to our Jihadi adversaries abroad, should be the focus of our national-security strategy.

Finally, the New Direction seeks to derail our robust economy by forcing employers to increase the minimum wage by 41 percent and otherwise increase benefits for employees. Subsidies for oil and gas companies would be repealed, and programs would be implemented to develop renewable fuels as a part of larger project of “environmental restoration.” How to pay for all this? By repealing the Bush tax cuts, of course. Calling it a “pay as you go” approach, the platform counts on reintroducing the old taxes and tax rates to balance the budget and reduce the national debt. Yet with their hodgepodge of new and improved programs and entitlements, one wonders how “pay as you go” will work.

Needless to say, Pelosi & Co.‘s New Direction has no basis in constitutionally constrained government. Nor does it, to borrow from Jerry Maguire, show us the money.

Pelosi swears these increases in taxes “on the wealthy” won’t be piddled away on special earmarks and social programs. According to her, the New Direction is a step toward fiscal conservatism: “A New Direction from where we are now, but it is a direction we were going in during the '90s producing record surpluses. If we had stayed the course we would be debt free as a nation by 2008. Instead, this Bush administration and Republican Congress are taking us deeply in debt and they can’t even account for the money.”

While we won’t attempt to defend the free-spending malfeasance of the Bush administration and the Republican Congress, Pelosi’s Democrats, contrary to her assertions, have a long and painfully documented record of raiding the Treasury.

This year alone, Democrats on the House Appropriations Committee, led by Wisconsin’s David Obey, have (unsuccessfully) sought to roll back some $26 billion in tax cuts. This is your money, of course, and they’ve pledged half of it to domestic spending projects, and the other half to deficit reduction. “Not every single dollar” would go to the Treasury, Pelosi admits.

Indeed. Democrats’ plans to balance the budget and decrease the deficit, given their insatiable hunger for entitlement spending and a plethora of other federally backed programs, won’t happen apart from raising your taxes to previous levels and beyond.

A tax increase, however, is the last thing the budget, the deficit or the economy needs – this according to the Office of Management and Budget’s Mid-Session Review, which couldn’t be worse news for New Direction Democrats. According to the report, President Bush’s goal of halving the deficit by FY2009 is a year ahead of schedule, thanks to increased tax revenues produced by pro-growth policies. This year’s deficit has fallen to $296 billion, or 2.3 percent of GDP – 30 percent lower than February’s forecast, and nearly 50 percent lower than 2004. FY2008’s deficit is projected to fall to $188 billion, a more palatable 1.3 percent of GDP.

Speaking of good economic news, the OMB says real GDP grew at an annual rate of 5.6 percent in the first quarter, making this the 18th consecutive quarter of economic growth. Coupled with this growth, the American economy has produced more than 5.4 million new jobs since August, 2003. The U.S. unemployment rate, lower than the averages of the past four decades at 4.6 percent, has become the envy of the world.

Finally, spurred by the Bush tax cuts, tax revenues have increased by 11 percent, or $246 billion from 2005 to 2006. That’s almost 19 times as much as Rep. Obey and House Democrats hoped to put toward deficit reduction by raising your taxes. Since the Bush tax cuts were fully implemented in 2003, tax receipts have grown no less than 34.6 percent. All of this has happened in spite of the devastating effects of September 11 and the economic burden of the War on Terrorism.

So why, you may ask, would we raise your taxes in order to balance the budget and reduce the deficit? That’s a question Minority Leader Pelosi and the New Direction Party must answer for the American electorate.

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