There’s a view circulating Wall Street that even if the GOP recaptures the Senate no significant policy changes can occur without 60 votes — the number that would cut off a filibuster or overturn a budget rule (even though there is no budget). This view is wrong.
Remember, when Bush passed his across-the-board tax cut in the spring of 2001, the Senate was locked in a 50-50 tie. They didn’t need Vice President Cheney’s tie-breaking vote because twelve Red State Democrats bolted their leadership and voted for tax cuts. The final tally, I believe, was 62-38 in favor of reduced marginal tax rates.
More, under reconciliation rules (an expedited budget process developed in Ronald Reagan’s first year in office), where spending and revenue targets instruct the major money committees before being rolled into one big bill, an up vote in both Houses is all that is needed to pass such a bill. Simply, a GOP Senate, even by a small margin, is wonderful news for potential tax cuts.
If they wanted to, Republicans could pass a major flat-tax and dividend-reform bill with 51 votes in the Senate. They could also use the same reconciliation procedure for a complete Medicare overhaul bill, including President Bush’s proposal to voucherize senior citizen choice to opt in or out of the government system. In fact, total tax and Medicare reform could be legislated in one bill.
Some of those Red State Democrats could lose today (Johnson in South Dakota, Widow Carnahan in Missouri, and Max Cleland in Georgia). But the Zell Miller Democrats will stay with Bush on a bunch of key issues, including tax cuts, conservative judges, ending lawsuit abuse, prescription drugs, and the usuals such as homeland security and terrorist insurance.
So don’t believe for one nanosecond the liberal media drivel that the Senate outcome doesn’t really matter. It will matter a lot. Just look at the drug company stocks. Pharmaceuticals are rallying on hopes of a GOP Senate and the removal of the so-called generic-drug threat.
A GOP Senate also counts on the war front. Replacing Joe Biden in the foreign relations chair and Carl Levin in the armed services chair will make a big difference for Bush and Donald Rumsfeld, particularly if it comes to waging war without a U.N. resolution. Sooner or later the president will cut loose from Colin Powell’s attempt to buy off France and Russia, and this stretched-out, Carter/Clinton-like negotiating process will come to an end.
With John Warner or John McCain as head of armed services, Rumsfeld’s policy reforms — including much greater use of special forces to crush Iraq — will be a lot easier to come by. And on judges, lawsuits, anti-trust over-regulation, and faith-based initiatives, you can bet that Orrin Hatch will perform a whole lot better than Patrick Leahy, who has proven time and again that he is completely in the hip pocket of the trial lawyers.
For Wall Street and the business community, Sen. Richard Shelby is significantly more pro-free-enterprise than current chair Paul Sarbanes, whose Sarbanes-Oxley Act for corporate accounting reform is beginning to looking more and more like overkill. A tough guy like Shelby will fix the Harvey Pitt/William Webster problem (the SEC chair allegedly concealed information in the selection of Webster to head a new accounting oversight board), he’ll put the SEC back in charge of global securities and accounting regulation, and he’ll rein in state attorneys general who are out-of-control in the wake of the corporate scandals.
On this last point, since when in America do we allow the government to force companies to spend huge amounts of money against their will and against any business logic whatsoever? France, Germany, and Japan might do it, which is why they’ve become third-rate economies. But America doesn’t micro-manage its businesses. Yet this is the plan of New York Attorney General Eliot Spitzer. His latest Soviet-style dictum would force Wall Street firms to spend hundreds of millions of dollars on a silly independent research company whose mediocre research will be consumed by no one.
Shelby and his GOP colleagues will give us some post-Enron sanity.
Tax reform, dividend reform, tort reform, legal reform, and other policy agenda items will all be vastly more possible if the Senate changes hands today. So will regime change in Iraq, and so will a stronger America at home and abroad. Don’t let the liberal media convince you otherwise.