The Democrats have provided Republicans with a historic opportunity to go on offense against Keynesian stimulus, and apply jujitsu against the Democrat 2012 playbook – Mediscare tactics. They shouldn't blow it.
Last night, Democrats got wiped out in two special elections; losing by 22% in Nevada CD-2 and by 8% in a New York district that hasn’t voted Republican since 1922. These victories were buoyed by Obama’s record disapproval ratings across every demographic, most notably, whites and independents.
While there have been copious pages of commentary published in an attempt to analyze the source of the GOP’s success, it is clear which tactic was unsuccessful: Mediscare (are you watching, Mitt Romney?). Both Democrat candidates attacked their opponents incessantly as proverbial killers of Medicare and Social Security. Although this pathetic line of attack is 50 years old, it was slated to serve as the impetus for Democrats’ 2012 campaign strategy. Well, their only plan to win in 2012 failed miserably, providing Republicans with a chance to launch a counterattack.
Last week, Obama announced Stimulus 2.0, an effort to double down on every policy that has failed to engender economic growth, and in most cases, mitigated recovery. The stimulus plan is essentially comprised of three components; $140 billion of traditional Keynesian pork spending, $49 billion for extensions of unemployment benefits, and roughly $250 billion in Keynesian-light temporary tax cuts, most prominently, the payroll tax cut. Obama plans to fund these immediate expenditures with massive tax hikes that will provide revenue over a ten-year budget frame.
It is quite evident that Republicans will oppose the spending components of the stimulus bill (I hope I’m not being too charitable); however, it is the no-growth “tax cuts” and unemployment components that should concern us. Republican leaders have expressed tepid opposition to the stimulus in its entirety, while even offering some flexibility towards a piecemeal passage of the plan.
These Republicans are having a difficult time categorically rejecting the payroll tax cut and extension of unemployment benefits on their merits. Instead, they have complained about the cost of those initiatives, and the fact that Obama plans to pay for them with tax hikes. The current dismal political climate for Democrats, along with last night’s electoral victories, should give Republicans the courage to stand on bold colors – and completely reject all provisions of Obama’s stimulus plan, even if they find spending offsets.
Unemployment benefits are a no-brainer. The evidence is incontrovertibly clear that the record 99 weeks of incentivizing unemployment has prolonged the jobs recovery. If we extend those benefits for another year, they will be enshrined as a permanent entitlement program and will preclude any significant job growth indefinitely. We have spent over $300 billion on unemployment since Obama took office. Unemployment welfare is rapidly becoming the fourth largest entitlement program. We are already suffering from a lack of GOP courage to deal with the big three. Why create a fourth permanent $100 billion+ entitlement, especially when welfare spending has perpetuated, not alleviated, record poverty.
Republicans must also oppose the proposed payroll tax cuts as well. As appealing as such a large tax cut is for many Republicans, support for such a plan would deny them the opportunity for some jujitsu on Mediscare. They need to point out that payroll taxes are different from all other forms of taxation. Payroll taxes supposedly single-handedly fund Social Security, yet Obama plans to cut 36% of its revenue source with this stimulus bill, even though SS already faces a $50 billion shortfall.
Republicans must show how it is the Democrats who are treating Social Security like a Ponzi scheme by indiscriminately marauding it, while paying out the shortfall with deficit spending. They must call out Obama for his duplicity on Social Security, by showing how he refuses to allow us to keep our payroll taxes in secure personal accounts, but has not qualms about completely canceling them year after year. Last night’s elections show that Americans no longer believe that Republicans will take their Social Security. It’s time for Republicans to pin the tail on the donkey.
At present, Obama and the Democrats are on the ropes. They have incurred historic electoral losses; they are suffering from incorrigible disapproval amongst a broad section of the electorate, and to make matters worse, Obama is embroiled in Solargate – a direct consequence of his first stimulus. And for you Republican consultants, who live and die by issue polling, the public opposes the no-jobs bill. Now is not the time to go wobbly on Stimulus 2.0.
Unfortunately, Republicans have a penchant for invigorating Obama when he is on the ropes. After suffering a chastening defeat last November, Republicans gratuitously bailed out Obama with passage of START, repeal of DADT, reauthorization of ethanol and green handouts, and extension of unemployment benefits. Then they agreed to negotiate a 2011 budget deal – one that cut outlays by a laughable $352 million –with a party that hadn't passed a budget for two years. Yesterday, Republicans acceded to Democrat tantrums over cutting wasteful transportation – and agreed to pass yet another short-term extension of surface and air transportation funding (by voice vote), without the much-needed cuts. Later this month, Republicans will offer a Continuing Resolution providing appropriations for FY 2012 that are drastically higher than those of their own budget.
This is a time for Republican leaders to redeem themselves. They have some good plans that include long-term tax cuts, regulation reform, and energy production. They should throw in litigation reform and welfare reform as well. They already have their own plan. Why adopt Obama’s stimulus? This question is especially salient now, as they have an opportunity to kill Mediscare while it’s on the run. Just ask Bob Turner.