Newsletter 91 - Fall 2018
A different ballgame
Deficits & debt
American flag (Robin Williams)
A different ballgame – With no presidential candidates on the ballot, the focus in mid-term elections typically shifts to issues and concerns at the state level – which often vary significantly from state to state. And voter turnout tends to be low, which means the outcome will probably depend on which party is most successful in getting its base supporters to vote versus reaching out to undecided voters.
The president has been hitting the campaign trail frequently this year to support GOP candidates who are in synch with his agenda, however, and his predecessor has been making political speeches as well. What’s up with all this activity?
As has been reported ad nauseam, the president is being enthusiastically supported by his base while drawing heavy fire from detractors who oppose his policies and/or his leadership style. If Democrats win a majority in the House of Representatives, the House might well begin impeachment proceedings against the president, thereby intensifying the rancor that already exists in DC. Key issues for mid-term elections, 8/6/18.
What about pressing national problems, such as trillion dollar deficits and a healthcare system that many Americans are unhappy with? Complex issues such as these typically get short shrift on the campaign trail – especially in mid-term elections – because political candidates find it more convenient to (1) blame the other side, or (2) offer fuzzy proposals designed to placate their base without energizing the opposition.
Some observers (notably former House Speaker Newt Gingrich) have suggested that Republicans need to nationalize the campaign this year by presenting a unified front on major policy issues and challenging Democrats to show they have some ideas to offer other than “resistance” and personal attacks. Republicans win by restoring faith of Americans, Adam Brandon, the hill.com, 8/9/18.
SAFE would be all in favor of such a debate, and to this end has posted a series of blog entries re points that deserve to be considered. Highlights from these essays are recapped in this issue, together with links to the blog entries for more detailed discussion.
Deficits & debt (SAFE blog, 9/24/18) – The national debt was about $5 trillion when SAFE was founded in 1996, or some $19 thousand for every man, woman and child in the United States. The current numbers are $21.5 trillion and $64 thousand per person, and they’re growing rapidly.
Each party blames the other, but we see them as equally at fault. Republican tax cuts will cause some revenue loss, as Democrats have pointed out, but it will be mitigated by the resulting economic boost. As for spending discipline, neither side has much to brag about.
Jointly announced by Sens. Mitch McConnell & Chuck Schumer in February 2018, the Bipartisan Budget Act (BPBA) authorized across-the-board increases for discretionary spending and restored dozens of special interest tax breaks that had been left out of the December 2017 tax bill. For fiscal conservatives, this represented a big step in the wrong direction.
OK, the BPBA authorized a Joint Select Committee on Budget and Appropriations Process Reform to review the applicable congressional procedures and recommend improvements. But our sense is that the JSC is more concerned about averting government shutdowns, etc. than reining in big deficits. SAFE letter to JSC members, 6/25/18.
Going forward, we would suggest a three-prong approach: (1) Aggressively slash wasteful government spending, of which there is plenty in DC. See, e.g., the Prime Cuts inventory maintained by Citizens Against Government Waste. (2) As entitlement programs like Social Security, Medicare, etc. aren’t subject to the normal budget review, appoint one or more special commissions to review these programs and propose changes to make them affordable over the longer term. (3) Enlist presidential leadership, which was a big help in balancing the budget during the 2nd term of the Clinton administration.
Taxes (SAFE blog, 9/3/18) – Aside from the Tax Cut and Jobs Act (TCJA) that was enacted using the reconciliation process in December 2017, the current majority party has very little in the way of legislative accomplishments to talk about. And hopes that the TCJA would give them a big boost in November have faded for several reasons, including the lapse of time and Democratic messaging (e.g., claims that millionaires and big corporations will reap most of the benefit).
Republicans are now working on a second tax bill, which would be fresh in voter minds when they go to the polls in November. The main thrust of “Tax Reform 2.0” (Tax Cut 2.0?) would be to make the individual tax cuts provided in the TCJA permanent instead of letting them expire at the end of 2025. Such a change would increase forecast budget deficits over the 10-year projection period, which are already being blamed on Republican tax cuts versus bipartisan spending increases. Deficits & debt, infra.
The House passed Tax Reform 2.0 before the pre-election break, on Sept. 28 to be exact, but this legislation will surely be blocked in the Senate. Accordingly it seems unlikely that Republicans will succeed in getting more credit for cutting taxes than they have already gotten.
Healthcare (SAFE blog, 8/27/18, LINK) – Republicans have been vowing to “repeal and replace” GovCare for years, and since 2017 they have had the votes to do so (by using the reconciliation process to avert a Senate filibuster). But despite repeated efforts, they failed to deliver, with the notable exception of amending the Affordable Care Act (authorizing legislation enacted in 2010) to repeal the individual mandate.
Critics accuse the GOP of playing a spoiler role. Failed to pass a replacement for GovCare – undermined ban on denial of healthcare insurance (HCI) coverage due to preexisting conditions - blocked proposals to stabilize and sustain the current system. And the attacks seem to be working; a recent poll indicated that 55% of Americans disapprove of the manner in which the president and his party have been handling healthcare.
The window of opportunity for ACA amendments has closed for now, so what will congressional candidates be saying about the subject on the campaign trail? Many Republican candidates will say as little as possible, thereby allowing their opponents to seize the initiative.
Democratic candidates can be expected to take one of two approaches. Some will blame Republicans for undermining GovCare, albeit not explaining how they would propose to improve the healthcare system. Others will say GovCare was a good first step, but it’s now time to enact Medicare for All (universal healthcare on the taxpayer’s dime).
What a bore! We would much prefer a serious debate on this subject, which at a minimum might cover (1) recent administrative actions designed to make the healthcare system work better such as approving new HCI options (short-term insurance & association plans) for individuals who don’t wish to pay for one of the GovCare-compliant HCI plans that are available, and (2) legislative proposals that could be taken up in 2019.
For Democratic candidates who want to pitch “Medicare for All,” please be prepared to quantify the cost involved and explain how the government could be expected to bear said cost when it’s already drowning in deficits.
Renewable energy (SAFE blog, 9/10/18) – Many politicians are supporting policies that would result in higher-cost, less reliable electric power, and even the skeptics seem reluctant to challenge the logic for promoting the use of “renewable energy” (e.g., wind and solar power).
Point one: According to the manmade global warming theory (MMGWT), the use of fossil fuels is causing a buildup of atmospheric carbon dioxide (CO2) that could lead to catastrophic global warming over the next 50-100 years.
The MMGWT is purportedly supported by an overwhelming scientific consensus. It is taught in schools and parroted by the mainstream media. But how compelling is the supporting evidence?
CO2 is a natural component of the atmosphere, essential for life on Earth. The current level is about .04% versus some .03% in 1800. Global temperatures have risen modestly since 1800, but this may be due to other factors, e.g., fluctuations in solar activity, rather than the increase in CO2.
Further research may confirm or refute the MMGWT, but for now it does not seem to represent a valid basis for a hugely expensive makeover of the national (and global) energy infrastructure.
Point two: Wind and solar power is already cost competitive with fossil fuel power and in due course will be cheaper. Also, the renewable energy sector will boost the economy by creating numerous “green jobs.”
It may seem logical that wind and solar power would be inexpensive as no fuel is required, but the capital costs involved are substantial. According to government estimates, the most economical renewable energy alternatives (onshore wind and photovoltaic solar) are roughly comparable in cost to the best fossil fuel option (combined cycle natural gas) for new power generation facilities.
Wind and solar power are unavailable when the wind isn’t blowing or the sun isn’t shining, however, so they must be backed up by reliable energy sources (natural gas, coal or nuclear) to ensure electric power will be available 24/7.
If reliance on wind and solar power keeps growing, the reliability of the electric grid will be progressively undermined – to the detriment of electric power consumers. So how can one understand proposals to phase out fossil fuel energy and use 100% renewable energy, e.g., by 2045 according to a recently enacted law in California?
True, the grid could operate solely on wind and solar power if the intermittent power was stored (e.g., by batteries) for use when needed, but this would raise the cost of electric power dramatically. So much for the claim that wind and solar power are cost competitive, it’s simply not true.
As for employment levels, higher electric power costs would predictably result in overall job losses, e.g., offshoring of US manufacturing operations.
Our conclusion: It’s time to stop artificially encouraging the use of wind and solar power. Government mandates and subsidies for renewable energy should therefore be scrapped.
Immigration (SAFE blog, 9/17/18)- According to Gallup, immigration will be one of the top policy issues for voters this fall. Three fundamental concerns are involved.
Border security – Our immigration laws won’t work if new arrivals can ignore the legal requirements and break in line ahead of other applicants.
The president proposes a southern border wall to curtail unauthorized entry from Mexico, which is understood to include other types of barriers or interdiction in some areas. It would also be necessary to consider alternative means of entry, e.g., initially lawful entrants overstaying their visa expiration dates.
Expedited procedures are needed to deport unauthorized persons versus employing an army of immigration judges. And let’s eliminate the jobs magnet by perfecting the E-Verify system and requiring employers to use it.
This is not to suggest deportation of the 10 million (or more) illegal immigrants currently living in the US, but the flow of unauthorized arrivals must be stopped.
Admission policies – An uncontrolled inflow of immigrants may interfere with effective assimilation of the new arrivals.
Immigrant families currently account for 20% of the US population, close to a historical record, and this percentage is projected to hit 36% by 2065. Should the immigration rate be slowed?
What about the president's call for a merit-based system, which would give preference to candidates with solid educational credentials or job experience?
Voting rights – The right to vote in federal elections is limited to US citizens, and this requirement should be observed.
Illegal immigrants are reportedly voting in some areas, notably “sanctuary cities.” Instead of debating whether voter fraud is of real concern, should our political leaders be working to prevent it by requiring photo ID at voting places, etc.?
American flag – Enjoy this 1982 skit by the late Robin Williams, video (5:06).
About SAFE - SAFE is a non-partisan, all-volunteer organization that was founded in 1996. We advocate smaller, more focused, lower cost government, to be achieved by cutting spending, restructuring “entitlements,” simplifying taxes, and rationalizing regulations.
SAFE BOARD OF DIRECTORS
Andrew Betley, (302) 239-9679
Dan Kerrick, treasurer, (302) 521-4272
Steve McClain, (302) 998-3910
Jerry Martin, (302) 478-5064
John Nichols, (302) 378-0683
rycK Stout, (302) 478-9495
Bill Whipple, president, (302) 464-2688
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