November 3 Contract with America

November 3 Contract with America
By Larry Elder
11/4/2010

On Nov. 2, 2010, the Republican Party recaptured the majority in the House. In the Senate, Republicans now possess numbers sufficient to sustain a filibuster and stop objectionable legislation from getting to the floor.

Obamalism has now been arrested. Voters rose to say no to the two-year gusher of spending and the staggering increases in the annual deficit and the national debt. Under Obama and the Democratic congressional majority, the national debt, as a percentage of GDP, jumped from 69 percent to a projected 94 percent. Voters said, "Enough!"

Now what?

"Governing isn't as easy as you think," said retiring Rep. Brian Baird, D-Wash. "Many of you have taken pledges that are contradictory. ... You must be honest about the numbers, since our annual deficit now exceeds all discretionary spending combined. If you set as your goal to roll back the size of government, you have an obligation to answer the tough questions and show real courage, not just appeal to ideology. Treat the voters like adults."

Politicians take contradictory pledges because voters send contradictory signals. Voters oppose tax hikes, even on the so-called rich. They agree that government is too large and understand that the three major drivers of domestic spending -- Social Security, Medicare and Medicaid -- grow on automatic pilot and saddle future generations with trillions of dollars in unfunded liability.

But voters, especially older ones, still want to spare this or that program or entitlement from the scalpel. Voters dislike ObamaCare. But a majority finds it perfectly acceptable to mandate that insurance companies take on those with pre-existing illnesses. This, of course, stands the concept of "insurance" on its head by forcing companies to assume (SET ITAL) known (END ITAL) risks rather than just unknown ones.

We need a November 3 Contract with America.

This Contract acknowledges that the Founding Fathers designed the Constitution as a contract that limits the size and scope of the federal government, not as a "living, breathing document" that supports whatever desires voters want and politicians grant. It challenges voters to face up to the train wreck of entitlement programs, annual deficit, national debt and interest payments on the debt. The Contract reduces government's size and scope so that we never again jeopardize our prosperity -- which threatens our national security by robbing Americans of the resources necessary to defend ourselves against our enemies.

The November 3 Contract with America addresses these issues without raising taxes or cutting benefits for those currently receiving them or who will soon be eligible for them.

I. Sell or lease land. The federal government owns about 700 million acres, more than one-fourth of all land in the U.S. For fiscal year 2007, the government valued its land holdings only at about $1 trillion -- but that includes a zero-dollar valuation for much of the acreage because it was never "purchased." The national debt is approximately $14 trillion. The proceeds from sales/mortgages/leases will fund our current and near-term liabilities and, with other changes, will completely eliminate our debt.

II. Social Security. Workers below the age of 55 shall have the option of placing their retirement contributions in private savings accounts.

III. Medicare. Health care needs of those below the age of 55 shall be addressed with individual, tax-free health savings accounts. From these accounts, people can purchase policies with high deductibles, as we do with auto insurance. Non-emergency matters will be paid for out-of-pocket from the accounts.

IV. Medicaid. Those currently on Medicaid must be grandfathered in, but by a date certain, all federal welfare payments will stop. The needs of the needy will be handled by the states and/or by the unparalleled generosity of the American people.

V. Eliminate, privatize, outsource or sell/lease many federal activities. These include, but are not limited to, Amtrak; the Tennessee Valley Authority; government-operated dams and nuclear power plants; the federal student aid grants and loans; public housing; the Food and Drug Administration; the Occupational Safety and Health Administration; the departments of Energy, Education, and Housing and Urban Development; the Environmental Protection Agency; Freddie Mac; Fannie Mae; the National Institutes of Health; and the Federal Housing Administration.

VI. Repeal laws that violate the principle of federalism, such as wage and hour laws; federal minimum wage; the Clean Air Act; the Americans with Disabilities Act; equal pay laws; the Davis-Bacon Act (mandating prevailing union wages for those working under federal contracts); and all federal anti-discrimination laws that apply to the private sector.

VII. Taxes. Eliminate income, corporate, capital gains, dividend and estate taxes. Given the reduced size of government, the limited duties of the federal government as described in Article I, Section 8 of the Constitution will be funded, as the Founding Fathers envisioned, with duties and tariffs.

Conclusion:

The Contract extricates the taxpayers from this unsustainable burden of spending and mortgaging our future. To do so without drastically reducing the size of government is like burning the living room furniture to keep warm. There is no "solution," only trade-offs.
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