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June
18, 2003 7:00 a.m.
The
Next Big Things for Bush
Here
are my top-five economic-policy priorities.
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ven in the afterglow of President Bush’s tax-cut victory, now is not the
time for Republicans to gloat (as tempting as that may be) or rest on
their laurels. In politics, as in contact sports, you're either playing
offense or defense. There are no time outs in political combat.
So
what is the next big thing for conservatives? What policies should Bush
advocate to help steer the economy out of its funk? The Bush tax cut is
already helping — as reflected in the nice bounce in the stock market
and the rise in consumer confidence — but more growth steroids are
needed. So here’s my list of the top-five economic-policy priorities for
the Bush administration in the months ahead.
1. Repeal the
death tax for good. In 2001 Congress passed a law that ends the death
tax in 2010, but then brings it back to life in 2011. This bizarre time
table makes estate-tax planning a near impossibility unless death is certain
in 2010. Let’s stick a stake through the heart of the death tax permanently.
2. Start allowing
workers to voluntarily place some portion of their payroll-tax dollars
into private accounts. Why not allow every worker to direct the first
$1,000 of payroll taxes into a private IRA account (with safe investments)
starting in 2004, in exchange for a reduction in future benefits paid
to these workers. This would allow tens of millions of workers to increase
their retirement earnings while reducing hundreds of billions of dollars
of future government liabilities.
3. Enact common-sense,
pro-consumer tort reform to lower costs and increase business activity.
The trial lawyers are an immense tax on American consumers and businesses.
No one knows the total price tag of excessive and frivolous litigation,
but the U.S. Chamber of Commerce has estimated that the price tag to American
consumers is more than $100 billion a year. To discourage rapacious lawsuits,
Congress should enact legal reforms that include: losers pay provisions
on court and legal fees; a $250,000 cap on medical malpractice pain-and-suffering
awards; and enforcement of reasonable fee requirements so that lawyers
are not receiving tens of thousands of dollars an hour (as was the case
in tobacco-settlement cases).
4. Enact a new
budget act to control the stampede of deficit spending. Federal spending
is growing at a faster pace now than at any time since LBJ was in the
White House launching the Great Society welfare state. In just the past
three years the budget has grown by $500 billion. The 1974 budget act
creates rules that are tilted toward rewarding more spending, not less.
A new budget act should include: a balanced budget requirement, annual
tax and expenditure limitations, a line item veto for the president, a
supermajority vote requirement in Congress to raise taxes, and sunsets
on obsolete federal spending programs. Most states impose all of these
fiscal restraints and they're better than Congress at keeping deficits
under wraps.
5. Restore confidence
in the dollar. President Bush was right: The dollar has “fallen more
than is economically advisable.” The declining dollar could negate the
positive impact of the tax cut. It is a myth that a weak currency is good
for exports, because the dollars that American exporters receive are worth
less in the world market. Bush should adopt the Reagan policy that a strong
dollar is a sign of a strong America. No country ever got rich by depreciating
its currency.
With his improbable
tax-cut victory, President Bush has proven once again that when he is
determined to win on his policy objectives — both with respect to
foreign and domestic affairs — he ultimately perseveres and proves
his critics wrong. This is a president with enormous popularity and a
deep well of political capital to continue the winning streak. The lesson
of his father is that he must use that political capital, or he will lose
it.
—
Stephen Moore is a senior fellow at the Cato Institute and president of
the Club for Growth.
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