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House Republicans need to change course after NY special election loss. In 2012, they should run on balanced budgets and trade
Howard Richman, 5/26/2011

In a special election in the NY 26th House District, the Democratic candidate just won what was formerly a "safe" Republican seat. The Republicans were split, with some of the Republican vote going to a self-proclaimed "Tea Party" candidate. Nevertheless, the election showed that the Republican Party has fallen drastically since November 2010, just 7 months ago, when they won the House in an overwhelming landslide.

Back then, they campaigned as the party that would balance the budget and oppose Obamacare's Medicare cuts. Once they won the election they morphed into the party that wanted tax cuts for the rich and cuts in Medicare.

They started to go awry during the lame duck session when they negotiated a continuation of the Bush tax cuts as well as new Social Security Tax cuts with the Obama administration, making an already bad budget situation even worse.

Then, this session, Rep. Paul Ryan, the Republican chair of the House Budget Committee, put together a budget plan, approved in principle by the House Republicans, that didn't balance the budget. Instead it cut taxes for the rich from 35% to 25% and cut Medicare 10 years down the road, not helping at all with the 2012 budget.

There was no need for the House Republicans to grab the third rail of American politics (Medicare and Social Security). They could have simply endorsed the findings of a bipartisan commission, such as Obama's commission headed by President Clinton's former chief of staff Democrat Erskine Bowles and former Republican Senator Alan Simpson which just proposed raising the Social Security age to 69.

Before the election, they rode the popular sentiment in favor of balanced budgets to preserve our children's future. After the election they switched to tax cuts for the rich, the Republican's least popular issue. Whoever made that decision was politically tone deaf.

Not only that, but tax cuts and government spending increases don't revive the economy, unless trade is balanced at the same time. They would just be pumping up the economic tire without first patching the trade deficit leak. Haven't the House Republicans learned anything from President Bush and President Obama's failures?

There is still time -- 17 months until the next election. But the House Republicans need to change course quickly. They should do the following:

  1. Strip the tax cut and Medicare proposals from Senator Ryan's budget.
  2. Add in real budget cuts in current discretionary spending by drawing heavily from Senator Rand Paul's excellent budget plan.
  3. Mandate that the Federal government only purchase new Compressed Natural Gas (CNG) vehicles as a way to reduce the federal fuel bill while causing the building of CNG filling stations so that households can also switch to lower price fuel. (CNG is about half the price of gasoline.)
  4. Add in the Scaled Tariff to collect $200 billion in government revenue while balancing trade and thereby causing new factories to be built in the United States.

With these proposals, they should be able to put together a completely balanced 2012 budget proposal, leaving the Democrats to explain why they oppose balanced budgets, balanced trade, and cheaper vehicle fuel.

But if the House Republicans don't change course now, the prediction from the New York special election is clear. The Republican sweep of 2010 will be followed by a Democratic sweep in 2012.

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Comment by M, 5/28/2011:

You say the Republican leadership is "tone deaf" I say their leadership is venal.  The "Tea Party" and "Libertarian Party" siphon votes from Republican Candidates, because 3% to 9% of the voters are fed up with the mendacity. 

Ditto for the "Green Party" and Democratic Candidates. 

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  • [An] extensive argument for balanced trade, and a program to achieve balanced trade is presented in Trading Away Our Future, by Raymond Richman, Howard Richman and Jesse Richman. “A minimum standard for ensuring that trade does benefit all is that trade should be relatively in balance.” [Balanced Trade entry]

    Journal of Economic Literature:

  • [Trading Away Our Future] Examines the costs and benefits of U.S. trade and tax policies. Discusses why trade deficits matter; root of the trade deficit; the “ostrich” and “eagles” attitudes; how to balance trade; taxation of capital gains; the real estate tax; the corporate income tax; solving the low savings problem; how to protect one’s assets; and a program for a strong America....

    Atlantic Economic Journal:

  • In Trading Away Our Future   Richman ... advocates the immediate adoption of a set of public policy proposal designed to reduce the trade deficit and increase domestic savings.... the set of public policy proposals is a wake-up call... [February 17, 2009 review by T.H. Cate]