There is a movement gaining steam within the GOP — one that wants to put conservative principles to work addressing the concerns of the lower and middle classes; one that sees that shifting demographics and new topics in the national conversation require new approaches to solving problems; one that is looking for ways to move beyond simple marginal tax rate orthodoxy and bring the principles of conservatism into the 21st century.
I have looked at how Paul Ryan wants to put conservative principles to work to update the war on poverty. Now, Senator Marco Rubio has released a campaign manifesto laying out his ideas for strengthening the middle class, offering a hand up for the poor, and reforming our health care system so that more people are given a fair shot at the American dream.
Sen. Rubio’s book is part of a growing trend. Think tanks like the American Enterprise Institute and YG Network, the magazine National Affairs and a whole host of thinkers like Yuval Levin, Ross Douthat, James Pethokoukis and Rommesh Ponnuru are churning out ideas on what Republicans should be doing to refresh their message. In the words of the New York Times’ Sam Tanenhaus:
“Reformicons… believe the health of the G.O.P. hinges on jettisoning its age-old doctrine …and using an altogether different vocabulary, backed by specific proposals, that will reconnect the party to middle-class and low-income voters.”
But these thinkers face an uphill battle as a result of the political situation at the grassroots of the party; the war for the soul of the G.O.P. is by no means won. Tea Party anger over the vapid leadership of the Obama administration still rages, leaving lawmakers with no mandate other than to oppose the administration’s agenda. However, if Republicans hope to take back the White House in 2016, they must offer a platform that consists of more than just the word “no.” This is why Sen. Rubio’s book is so important: it is where the reformicon idea machine is meeting up with the campaign politics of 2016.
American Dreams begins by arguing that the problems facing the country in the 21st century require a new set of solutions. No longer will we be able to solve the problems of today by simply cutting the budgets of government programs. There needs to be a fundamental reevaluation of the problems we face:
“…no matter how much we spend on the ideas of the last century, or how much we streamline some of them, they are never going to help us reclaim the American Dream for all.”
Sen. Rubio, like many Republicans believes that creating jobs starts with fostering a pro-business atmosphere. Our oppressive tax code causes companies that would be providing jobs and tax revenue here in the U.S. to form inversions or (when that totally rational way of dealing with a bloated tax rate is condemned by the Obama administration) by simply selling out to foreign companies. A lower corporate tax, coupled with a lower personal income tax (since many small and new businesses file their taxes through individual returns) would foster a better atmosphere for job creation. Rubio also proposes allowing businesses to deduct 100% of earningsthey invest back into a company, giving them more incentive to expand operations. This would allow for the closing many of the corporate tax loopholes, thus greatly simplifying it and leveling the playing field for businesses that can’t afford a lobbyist. This idea alone would “stimulate investment four times as much as lowering the tax rate.”
So that’s great. But what about those who are deterred from reentering the job market due to painfully sluggish wage growth? Here, the traditional argument is for liberals to advocate a minimum wage increase and for conservatives to advocate deregulation and a more pro-business tax code. While the latter course is certainly more helpful (raising the minimum wage may not help those who need the most help and may kill jobs), there is something to be said for creating federal wage subsidies for the working poor to ensure that working is a better choice than dependency. Sen. Rubio’s wage subsidy, called a “Wage Enhancement Credit” would provide a 30% monthly subsidy directly to workers making less than $20,000 a year, rather than yearly as it is now with the earned income tax credit (EITC). Low-income workers could thus count on the extra income every month rather than a once-yearly refund.
For those who run into hard luck and need assistance, there is little doubt that federal anti-poverty programs aren’t working. 50 years after the beginning of Lyndon Johnson’s “War on Poverty,” the percentage of people living below the poverty line is nearly unchanged. It is obviously time for a new approach: enter the “flex fund.”
The flex fund is simple in concept: it is basically a block grant given to states that would allow them to spend their anti-poverty funds as they saw fit. However, rather than reducing funding for states that reduce the number of people living in poverty, the states would be allowed to keep the reaminder and spend it as they see fit: paying down debts, infrastructure, etc. Sen. Rubio cites Utah’s innovative unemployment training program as an example of how states can come up with innovative ideas that help people find work faster. Under this program, those who have been on unemployment for more than 6 months are enrolled in online job training courses. The program has reduced the amount of time spent on unemployment by 7 percent.
The other element of Rubio’s plan focuses on the family. Reformicons like Senator Lee like to point out that families with children are simultaneously paying for the cost of raising their kids while also being on the hook for their own payroll taxes. But they deserve more credit, because their children will soon be joining the workforce and doing their part to keep social spending programs strong. Put more simply, today’s children are going to be tomorrow’s taxpayer. So doesn’t it make sense that families today should be getting a tax break to help them during those expensive years spent raising a family? The Lee-Rubio plan pumps up the child tax credit to $2,500 per child in addition to the current $1,000 per child and eliminates the phase out for higher incomes. It also makes the credit partially refundable.
While the Rubio-Lee plan outlined in the book is a great start, it definitely has a major flaw: it would add trillions to the debt. There are lots of ways to combat this: tweak the rates for top earners, lower capital gains taxes only for long-term investors, or… there is no shortage of possibilities here. The plan is a great start, and only shows why entitlement reform is still such a priority.
Of course, no conservative campaign tome would be complete without railing against Obamacare. The law, with all its flaws, failures, and unintended consequences will probably not be repealed by Congress. However, there is hope that the King v. Burwell case may deem the subsidies that are the backbone of the law unconstitutional, leaving Republicans with an opportunity to provide an alternative. What would Sen. Rubio’s alternative look like?
The dearth of details in this regard was quite disappointing. He proposes turning the tax deductions for businesses that offer plans into a refundable tax credit. This would be in the form of a monthly refund which would encourage people to find the cheapest possible plan on the entire market rather than on an exchange. The worker would be able to keep the plan when she changes jobs and be able to purchase insurance across state lines, and… that’s about it. It is dangerous, politically speaking, to be too specific in proposals made during a campaign (think coalition building), but it is obvious that Sen. Rubio (indeed the entire party) doesn’t really have a ready-made solution for replacing Obamacare should the Supreme Court strike down the subsidies (by the way, here are some ideas on that).
So what do all these ideas add up to? They entail making conservatism a message of hope again. We need to bring back “Morning in America.” Conservatism must be the easy-going smile of Reagan, not the angry finger-jabbing of a conservative protestor. The message has too often been one of simple opposition without alternative, a message of cutting and repealing when it should be one of improving and replacing. Let’s face it: experience has now decisively shown us that it is politically impossible to achieve conservative goals through shutdowns and crisis-to-crisis governing. Consensus and common ground are the truest paths forward.
Further, as I frequently argue, the GOP is fighting a losing demographic battle. Reaching out more effectively to working class and poor voters (many of whom belong to minorities) is the only long-term winning strategy. A constructive message like the one put forth in Marco Rubio’s book is a good foot to start the 2016 campaign off on.