Seldom in American politics are we presented with an opportunity to fundamentally change, for the better, the lives of the American people. Typically, political change is incremental, and too often the creeping incrementalism of the status quo has only served to grow the reach of government at the expense of the family budget and individual freedom. But history shows us that big ideas and bold political entrepreneurship can capture the imaginations of otherwise disenfranchised voters to create a new constituency for change.
Today, we face a rare window to make the big ideas of individual ownership and economic opportunity a political reality. The first question is: Will our leaders take the lead? The second question–equally important–is: Will grassroots activists do their part to help deliver a mandate in November?
Past successes suggest that the answer to both questions can be yes. Both the Reagan tax-reform revolution in 1981 and the Contract with America in 1994 are shining examples of big ideas coupled with aggressive political leadership resulting in fundamental, lasting policy changes.
It is important to remember that the marginal rate cuts prescribed by Kemp/Roth were never embraced by the political class inside the Beltway. For years, those of us arguing for tax cuts were fairly lonely agitators for reform. Even within the Republican party, elders remained fixated on the deficit, leaving liberals free to dominate the debate over how to better the lives of citizens. “Solutions” always resulted in new programs and bigger government. Conservatives were relegated to railing against someone else’s bad ideas.
Ronald Reagan changed everything, by successfully offering the American people a better way to improve their own lives through sweeping tax relief, flatter tax rates, and economic growth. Income-tax rates were slashed by 30 percent, triggering an unprecedented recovery and sustained income growth. Despite growing complexity and subsequent tax increases, particularly the Clinton tax hike in 1993, the imprint of Reagan’s rate cuts have by and large remained intact. The economy–boosted further by the Bush tax cuts in 2001 and 2003–still benefits from the innovation and entrepreneurial spirit unleashed over 20 years ago.
Likewise, when Dick Armey proposed “nationalizing” American politics with a bold list of big policy changes under the Contract with America, insiders derided the idea. “All politics is local,” the refrain went. Conventional wisdom predicted that voters were more interested in highway pork than in bold reforms of government. Of course, the Republican takeover of Congress in 1994 changed political convention. Newt Gingrich estimates that the Contract’s big ideas mobilized nine million new voters to the polls in that year’s elections, citizens who had previously not been presented with a compelling reason to participate in the political process.
The new majority proceeded to balance the federal budget for the first time in 29 years through aggressive spending restraint. A more lasting legacy of the ‘94 revolution was sweeping welfare reform that finally rescued an entire generation of Americans from a vicious cycle of poverty and dependency on government. As of last year, the overall Temporary Assistance for Needy Families caseload dropped by more than seven million individuals as these reforms continue to move people from welfare to the workforce.
Of course, significant pieces of the Contract have gone unrealized, most notably tort reform. To this day the benefactors of the lawsuit lottery, along with their growing representation in Congress, continue to stifle needed reforms. Agriculture reform under Freedom to Farm has been gutted in ways that would embarrass even Vladimir Putin. Likewise, the commitment to spending discipline has waned dramatically, particularly since 9/11.
The next revolution in public policy is past due. A new generation of political entrepreneurs exists–we like to call them the “Reagan Babies”–inspired by President Reagan’s example and ready to drive big ideas that can capture the support of grassroots America. In Congress already, representatives like Jim DeMint of South Carolina and Paul Ryan of Wisconsin, and senators like John Sununu of New Hampshire, are politicians with both big ideas and formidable leadership skills. Based on the results of our own candidate survey, a new generation of entrepreneurs (197 candidates for federal office and counting) is actively running on bold ideas like Personal Retirement Accounts, supply-side tax relief and fundamental tax reform, and tort reform.
Of course the most obvious candidate to lead the next conservative revolution is President George W. Bush. He too is a Reagan Baby, inspired to political service by the big ideas of individual liberty and economic freedom. He demonstrated an ability to run on innovative policies like Social Security reform in the 2000 campaign. The Bush campaign’s theme of creating an “Ownership Society” is an ideal platform from which to build a political mandate for personal retirement accounts, medical savings accounts for health care, and tax reform. The president gave a strong voice to these important domestic issues in New York City at the beginning of September, and grassroots America is eager and energized to respond to his call.
In truth, we need the president’s leadership if we hope to fix Social Security, the tax code, or the legal system.
No bigger opportunity confronts us than transforming the current Social Security system into a voluntary system of personal accounts that are owned and controlled by individual taxpayers, not the government. Big accounts of at least half of the current payroll tax can protect the benefits of current retirees and solve the current system’s looming financial meltdown. Just as important, we can create genuine financial security with substantial retirement nest eggs that will give every working taxpayer a stake in the future growth of the American economy. This issue is a proven winner for every serious candidate that has embraced it. Like the Contract in 1994, in 2004, Social Security reform could engage new voters in the political process, including younger voters, African Americans, and Hispanics, all of whom get a raw deal from the current system.
Despite the obvious and positive impact the Bush tax cuts have had on revived economic growth, we expect the political establishment–Republicans and Democrats alike–to continue to blame tax cuts for every problem under the sun, from the vanishing Social Security “trust fund” to rising deficits. Echoing criticisms of the Reagan tax cuts, these arguments will not stick because they are not true. Lack of vision is best answered with big ideas. Beyond making the current tax cuts permanent, President Bush’s proposals to stop the tax code’s punitive treatment of savings are a big step toward fundamental reform. The real opportunity, both politically and economically, is to finish the job Reagan started in 1981, scrapping the current tax code for a system that is flat, simple, fair, and honest.
The wholesale takeover of the Democratic party by trial lawyers continues to stifle needed reforms to our legal system, and has left countless judicial nominations unconfirmed. The end result is a corrupted system of justice, clogged with frivolous lawsuits that line the pockets of those willing to abuse the system while a long queue of real victims are unable to get speedy redress in our courts. We can do better. The rise of Senator John Edwards, a wealthy personal-injury lawyer whose political career has been financed by the über-wealthy of the lawyering class, suggests an opportunity to capture the attention of American voters on the need for changing the tort system.
To make all of these big ideas a reality, we created FreedomWorks, a merger of our two organizations, Citizens for a Sound Economy and Empower America. Our mission is twofold: Inside the Beltway, we will continue to cultivate new ideas and the political and legislative skills required to make innovative policy the law of the land. Outside the Beltway, we will continue to recruit and mobilize a growing army of political activists committed to these big ideas, which we call the Freedom Agenda.
Between now and the election, we will go toe to toe with the radical Left in the battleground states that will determine the face of government for the next four years. We seek a freedom-loving, conservative governing majority based on ideas, not party affiliation. Where Republicans hide from important reforms like personal retirement accounts, the volunteer activists of FreedomWorks will call them out. When Democrats like Senator John Kerry camouflage their proposals for higher taxes behind the rhetoric of reform and “simplification,” our grassroots army will define, door to door, the meaning of real tax reform.
Ultimately we know that freedom and free enterprise work. Freedom is good policy and good politics. To all candidates, of every political persuasion, willing to run on the big ideas of the Freedom Agenda: Go for it. We’ve “got your back.”
–Dick Armey, C. Boyden Gray, and Jack Kemp are co-chairmen of FreedomWorks.