My Critique: Gop's New Contract With America

Okay, I've had a chance to read and understand the new GOP Contract with America, and this is my analysis of it. Basically, it has some good points in it, but it is also weak and vague in many areas... such as spending cuts. And as always, there is the lingering spectre as to whether they really mean it. Can we trust these guys?

I've been expressing doubt that the GOP has truly learned its lesson and will honestly try to reduce spending and the size and scope of government. This document shows me that I was right to doubt.

I wasn't impressed with this Contract with America, V2. They left out too many details and stopped short of committing to real change. My assessment is that even if they accomplish the majority of the planks in this contract, the impact on the underlying form of our government will be slight. No major downsizing in government size or spending, no major increase of individual liberty. The economy may well turn around, but getting us back to where we were in the early Bush years is hardly a fundamental change. This document ignores the strident call for a smaller and fiscally responsible government, providing instead modest goals that LOOK like they're accomplishing something when they really aren't.

The proposal, found here, offers plans in four areas. I will deal with each area separately, focusing on as many of the bullet points that I think are necessary. The first area is:

Create Jobs, End Economic Uncertainty, and Make America More Competitive
This is their economic plan, and it seems to be mostly on the right track. It's a bit thin on permanent incentives for growth, though.

Make all of the Bush tax cuts permanent
Good plan. Tax increases right now would have the effect of further stifling economic growth. Making the current tax rates permanent would at least maintain the status quo... it wouldn't make things worse.

Give small businesses a tax deduction equal to 20% of their business income
Tax incentives like this are intended to promote new economic activity. One thing missing from this pledge, though, is some kind of duration. Would this be a one-year incentive, will it span multiple years, or is it permanent? Temporary, short-term incentives usually do not spur businesses to hire new employees or expand operations, because those are permanent commitments. Businesses are reluctant to make long-term commitments based upon short-term incentives.

Reign in the Red Tape
This bullet may actually be misleading. They want to require Congressional approval for any regulatory changes that have an impact of $100 million or more. The problems here are two-fold. First, we all know that the economic impact of a regulation can be jerry-rigged to appear less than it is. Second, all the government would have to do is segment the changes into lots, each of which has an impact of less than $100 million. And if you don't think they'll do this, where HAVE you been lately?

Repeal job-killing business mandates
This header is VERY misleading, as all they intend to repeal is the 1099 reporting requirement that was included in ObamaCare. That's a good step, but it certainly doesn't live up to the mantle of "repealing job-killing business mandates." What about the many others out there, guys?

That's it for an economic plan. To me, it looks a bit thin, though it is definitely a step in the right direction. And now, on to their second area of focus.


Stop Out-of-Control Spending and Reduce the Size of Government
This is their attempt to reduce spending and make government smaller. Though it has some good ideas, they fail to make the hard choices that are necessary, so this won't accomplish very much.

Repeal the stimulus
Not all of the money allocated by the stimulus program has been spent. Cancelling all future stimulus spending is a good step that will reduce spending by hundreds of billions of dollars.

Cut spending to pre-stimulus, pre-bailout levels
On the surface, this sounds great. However, they included a phrase that makes this an exercise in futility. That phrase is "with common-sense exceptions for seniors, veterans, and our troops." In other words, they won't cut spending for the military, social security, medicare, medicaid, and veterans' services. The problem is that those agencies combined make up 60% of the 2010 budget. Exempting them from spending cuts simply means that in order to cut the federal budget by 20%, they'd have to cut all the remaining budget by HALF! Obviously, that's not going to happen. This failure to realize that entitlement spending is a part of our problem that MUST be gotten under control means that their spending reductions will have a minor impact at best.

Establish a Hard Cap on New Discretionary Spending
Beyond feel-good platitudes that they will "put common-sense limits on the growth of government" and "set strict budget caps to limit federal spending on an annual basis," they provide no details of their plans. Heck, Congress already has PAYGO in place, and they routinely classify things as emergency spending to get around the limitations. How will the GOP proposal change that? They don't say.

Cut Congress' Budget
Another bullet point that sounds good but has no details. They claim they will "significantly reduce" Congress' budget, but what will they cut to get that decrease? Also, notice there is no target for the reduction... for example, 10%. So they can claim success even if they manage a 0.01% decrease. This bullet point sounds good, but doesn't mean much.

Hold weekly votes on spending cuts
They are not talking about weekly votes in Congress, here. No, they're referring to their "YouCut" program, where they put up a list of cuts and let us vote online as to which one we like the most. To my knowledge, none of the spending cuts they've voted on so far have been passed... though I admit I could be wrong. But this is a ridiculous program and pledge. If you have a series of proposed spending cuts, PUT THEM IN A BILL and let CONGRESS vote on them. Cutting spending isn't an either-or proposition. Start cutting spending, guys, without the PR games.

End TARP
This is a good step, albeit a minor one. This would save maybe $16 billion... worth doing, but hardly a central plank for major spending reductions.

End government control of Fannie Mae and Freddie Mac
This is good... except they don't really mean it. They want to privatize the two and end federal support that has already cost taxpayers over $100 billion. But they also want to "reform Fannie Mae and Freddie Mac by ending their government takeover, shrinking their portfolios, and establishing minimum capital standards." They want to relinquish ownership and responsibility, but still keep control over them. Pick one, guys.

Propose a net federal hiring freeze
Since the federal workforce has continued to grow even while the private workforce has shrunk, this is a good goal. However, they fail to specify how long the freeze will last... in my mind, that's a pretty important detail. Oh, and notice that they don't promise to PASS this freeze, just to propose it. They promise to cut spending, reduce taxes, but only PROPOSE a hiring freeze? Hmmm...

Root out government waste and duplication
This is the perennial pledge to cut waste in government. It seldom produces concrete results... may this time be different.

And that's it for their second focus area... if you ask me, it's pretty weak. I don't see how this will SIGNIFICANTLY reduce the size and scope of government. Do you?

Repeal and Replace the Government Takeover of Health Care
This is probably the strongest portion of this new contract, and it holds out the most hope. Of course, it all hinges on being able to get a repeal of ObamaCare through Congress and signed by President... Obama. Yeah, probably not going to happen unless the GOP gets the Presidency AND both houses of Congress.

Repeal ObamaCare
Good step, though they don't tell us how they plan to actually DO it. That's the major weak point, here.

Enact medical liability reform
One of the things raising the cost of medical care is how easy it is to sue a doctor and win a multi-million dollar award. This means that they must carry large malpractice insurance policies, and perform tests and procedures solely for CYA purposes. Again, the problem is a lack of details. Calling their intended reform "common-sense measures" doesn't actually make them good and effective.

Allow us to purchase health insurance across state lines
Another good idea, treat health insurance just like auto insurance, boat insurance, and homeowner's insurance. Let US shop around to purchase the policy we want.

Strengthen the Doctor-Patient Relationship
How the HECK does Congress do that? Apparently, they're going to pass "common sense reforms." Again. See what I mean by nice-sounding bullet points with no details?

Ensure Access For Patients With Pre-Existing Conditions
Okay, how? The reason that Democrats imposed the "individual mandate" was because provisions like this one would significantly INCREASE health insurance premiums. By expanding the customer base, they hoped to offset those increased costs. So now the GOP wants to force insurers to ignore pre-existing conditions and remove lifetime liability caps from policies. How will they deal with the premium increases? They want to "reduce the cost of coverage" and "incentivize states to develop innovative programs that lower premiums." Yeah, I know... they have no real plan, here.

Permanently Prohibit Taxpayer Funding of Abortion
This is a sop to all those social conservatives who've been feeling ignored by all this focus on fiscal matters. I don't have any problems with eliminating taxpayer-funding for abortions, just so long as they don't try to push that envelope further. Freedom, guys, remember that concept?

And that's the end of that one. Though it is the strongest area they've focused on, it still has significant weaknesses and vagueness.

Reform Congress and Restore Trust
Write the Oxford dictionary on the head of a pin, climb Mount Everest without any breathing gear, reform Congress and restore trust. These are three tasks of about equal difficulty. Their proposals fail, I think, to do anything that would substantively move us closer to accomplishing these goals.

Read the bill
They pledge to post the bill online for three days before it is voted on by the House. No mention of the Senate... how about "house of origin?" Regardless, we've heard this before, and PresBo has ignored this promise when it suited him.

Adhere to the Constitution
They want to require each bill moving through Congress to cite the section of the Constitution that justifies its passage. Sounds great, and it's a good step, but anybody can CLAIM anything. Where's the review process to affirm it? That's the hard part... because to make this work SOMEBODY is going to have to make a constitutional ruling on each bill. And at that point we're back to somebody's interpretation of the Constitution.

Make it easier to cut spending
They complain that the Democrats have kept Republicans from amending bills... a claim that is undeniably true. They then commit to allowing anybody, of any party, to submit amendments that cut spending. Notice the qualification... ONLY to cut spending.

Advance Legislative Issues One at a Time:
They want to end the practice of "bundling" an unpopular law with a popular one. They pledge to "major legislation one issue at a time." Okay, that's great, but it's voluntary. How about figuring out a way to REQUIRE this? THAT would be a real reform.

So, that's it. That's what I think of the provisions in the GOP's Contract With America V2.

This "contract" has significant weaknesses and a lot of vague promises and pledges. Yes, there are many good things in it, but it will be easy for the GOP to weasel out of it later on because of the many holes in it. If this is the best that the GOP can do, then we're in trouble. They may halt the slide, or at least slow us way the heck down, but they're unlikely to begin our long climb back to a small government of limited powers.

Unfortunately.