What Should Republicans Do?

Republicans have taken both houses of Congress and are eager to make changes. But they haven’t collectively decided what those changes should be. Here are some suggestions.

1. Learn from history.

At least since the Clinton administration, and to some degree for a couple of decades before that, this country has suffered from a consistent pattern. First, one party takes the White House and Congress. Thrilled with the taste of power, they overreach, provoking a backlash. As a result, the other party soon takes control of at least one house of Congress, leading to gridlock for the next several years.

Republicans should seek to avoid this scenario this time around. Instead of immediately trying to pass legislation that will please certain of their constituents, Republicans should think about how they can stay in power for more than a few years. That means an incremental approach to change, but each increment should be designed to make the next increment more, not less, politically feasible.

Political leaders sometimes argue that change really only happens in the first 100 days of a new Congress or administration. But perhaps that is true only because the things they do generate such backlashes that they can’t do any more. Republicans should find ways to achieve their goals without generating those backlashes.

For example, when governors John Kasich of Ohio and Scott Walker of Wisconsin first took office in 2011, both faced fiscal problems due to overly generous contracts with public employees unions. Kasich dealt with it by negotiating with the unions; Walker dealt with it by taking away from the unions the power to negotiate. While both had the same outcome of improving their states’ fiscal situation, Walker’s tactic provoked a huge backlash. He managed to survive that backlash, but the opposition his action generated proved a major distraction for much of his administration. As the Antiplanner wrote at the time, “In focusing on collective bargaining rather than the actual terms of employment, Walker allowed the unions to take control of the debate, making it an issue of “rights” instead of finances.”

2. Focus on fiscal issues.

Part of the historic pattern is that Democrats win on social issues while Republicans win on fiscal issues. Whichever party is in power effectively shoots itself in the foot by giving the other party ammunition. For example, Democrats’ obsession with government-run health insurance turned a social issue–poor people’s access to health care–into a fiscal issue. Republicans’ obsessions with abortion and gay rights give Democrats tools to bring them down.

The tenuous coalition that makes up the Republican Party includes social conservatives, paleoconservatives, neoconservatives, and libertarians. The one thing they all agree on is the need to make the government more fiscally responsible (except with respect to defense, where the neocons are not so fiscally responsible). Since tax and fiscal issues are the issues that Republicans win on, they should stick to those issues.

This means no introduction of bills to limit third-trimester abortions, no introduction of constitutional amendments to declare that marriage is between a man and a woman, and no efforts to mandate oil drilling in the Arctic National Wildlife Refuge. All of these things will give Democrats the openings they need to retake at least one house of Congress in 2018 (if not 2016), thus continuing gridlock.

This may disappoint a few Republican constituencies. But social conservatives have to face it: they have lost the abortion and gay rights debates. Both have been taken out of legislative hands by the courts. Moreover, in the case of gay marriage at least, the court of public opinion is not only not on their side, but is increasingly against them as younger people are far less likely than their elders to gay marriage. Social issues need to be addressed at the individual level–abortion is between a woman and her conscience; a marriage between a man and a woman is threatened by gay marriage only if the man and woman choose to feel threatened–not at the political level.

3. Fix incentives, not outcomes.

Nearly all of the problems with the federal government are due to poor incentives. Many elected officials imagine that those sitting at the top can simply order government agencies to be more efficient or adopt more effective missions. But it is incentives that really determine what an agency does and whether that agency will be efficient doing it. In the long run, if the incentives are right, everything else will take care of itself (including a reduction in the size of government).

Unfortunately, Congress almost never thinks about incentives when it passes legislation–or when it does, it thinks about them the wrong way, as in “how can I give an agency the incentive to produce the outcome I want?” Instead of worrying about outcomes, Congress should create a level playing field, with a minimal amount of regulation and subsidies.

For example, instead of debating about whether federal transportation dollars should go for roads or transit, just fund each mode of transportation out of the user fees it generates. This will give those who administer each mode an incentive to bring their costs in line with their revenues and to provide the services that transportation users want and need the most.

The existing surface transportation law expires next May, and Congress will have a fight over deficit spending, infrastructure, and other issues. By focusing on incentives rather than outcomes, Republicans can disarm most of the Democrats’ arguments for more deficit spending and favors to unions and other Democratic constituencies. Ideally, if new incentives are successful, Democrats won’t want to change them even if they do retake Congress or the White House at some point in the, we hope, far distant future.

4. Resist the temptation to be the chamber of commerce party.
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Democrats have successfully painted the Republican Party as the party of Big Business while Democrats supposedly are the party of the working class. We know the latter isn’t true, but Republicans too often make themselves vulnerable to the former accusation by promoting huge subsidies to companies that supported them. Instead of merely redirecting the subsidies the Democrats were giving out to a different set of recipients, Republicans should find ways to simply end those subsidies.

5. Tread lightly on the environment.

We live in a fossil fuel economy, and the United States is one of the world’s greatest storehouses for fossil fuels. We probably should permit construction of the Keystone pipeline (without any subsidies, of course), as well as development of new sources of fossil fuels so long as they can avoid environmental damage.

That doesn’t mean we don’t want more fuel-efficient cars, energy-efficient homes and other buildings, and LED lights that save on electricity bills. But we can have these things without strict government mandates and regulation.

One way is to focus on protecting the environment through better incentives. Without exception, environmental issues consist of a resource that is not properly marketed (such as water or endangered wildlife) threatened by a resource that is (such as minerals or oil & gas drilling). Too many people think the market resource is the evil, but the real evil is that some resources are not in the market. Creating markets for those resources will go far towards protecting them.

In many cases, environmental protection can come about through voluntary efforts. Not everyone believes climate change is enough of a threat to demand a complete restructuring of society, as the Progressives want, but those who are concerned about the issue should have opportunities to buy climate offsets.

Treading lightly, however, means not trying to force oil drilling in ANWR, opening up public lands to more subsidized cattle grazing, or declassifying wilderness areas to allow more fracking. Instead, let those energy companies and other land users demonstrate that they can do a responsible job on lands that are less controversial first, then allow them to bid on doing the same (without subsidies) on public lands, while letting environmental groups submit bids to keep areas that they regard as critical closed to development.

6. End the war on drugs.

The war on drugs has been fought for more than a century with little success and much harm as the U.S. has incarcerated a larger share of its population than any other country in the world. It was a Republican president, Ronald Reagan, who made the war on drugs particularly virulent, but even a Democrat like Obama has done nothing to reduce it. Just as only Nixon could go to China, perhaps only a Republican Congress and president can end the war on drugs.

Ending the war doesn’t mean letting school children take heroin any more than ending prohibition let school children drink hard liquor. Nor does it mean imposing such high taxes on drugs such as marijuana that it is cheaper for people to buy them on the black market. Since prohibition ended more than 80 years ago, we have the experience of 51 sets of state (and DC) laws regarding alcohol, and we can pick the best of these and encourage states to apply them to drugs as well.

7. Give up on the war on illegal immigration.

After losing on abortion and gay marriage, immigration is the next social issue for Republicans to lose and Democrats to make hay. Considering that Latinos are one of the nation’s fastest-growing demographics, and that they regard a war on illegal immigration to be a war on their families, Republicans should reverse course and take the opposite approach than the one they have been taking.

Most of the libertarian contingent in the Republican coalition understands that this country has always been strengthened by its immigrants. Yet, for well over a century, demagogues have turned immigrants into a political issue. The economic truth is that immigrants will add more to our economy than they will take away, and by achieving the American dream for themselves, they will create demand for more work for people who already live here.

Recognizing this may mean giving amnesty to people who are already here and letting more people in provided they can contribute to our economy at any level, not just PhDs and medical doctors. Worries that immigrants will abuse our welfare system are just symptoms that the welfare system should be reformed, for if it is giving immigrants bad incentives, it must also be giving American citizens similarly bad incentives. Reversing course on immigration is not just the economically correct thing to do, it is politically strategic as it will allow Republicans to regain the support of Latinos, many of whom are naturally conservative and should feel right at home in a Republican Party that doesn’t treat them as enemies of the state.

Conclusions

I didn’t make recommendations on international issues because they don’t seem to be a major source of division between the parties, both of which seem willing to make undeclared war on whatever small country is in the news today, and because they seem to be beyond the powers of Congress at the moment. I personally don’t like these wars nor the giant national security apparatus that goes along with them, so I hope the next president will take a different stance than the one taken by the last five presidents.

The suggestions I did make presume that the people who will take charge of Congress next January are sincerely interested in the economic health and future vitality of this country, and not just in their own short-term political and economic prospects. That’s a strong assumption based on past behavior, but one I’m willing to make at least with respect to many of the newcomers who came in with fiscally conservative goals during the last four years. If they will follow these guidelines, the United States will return to a period of strong economic growth, which in turn should support a healthier environment.