Real Thought

The Democratic party took control of the House and Senate today. There was jubilation expressed by Nancy Pelosi and Harry Reid. Both promised to work in a “spirit of bipartisanship” to “move America forward.” Personally, I have my doubts. What incentive is there to work on anything in a bipartisan fashion? The only check on legislation passed is now a very unpopular, lame duck president and a dispirited Republican party which has been frozen out of all leadership in the House and the Senate. As for “moving America forward”, the Democratic agenda has and continues to be to move America backward to at least 1996 or earlier when Bill Clinton was in the White House.

It remains to be seen if this Congress can really achieve any substantial legislative goals or if the Congress and White House will simply become mired in gridlock and chaos. Given the strident and occasionally radical tone of the Democratic Party in the last election cycle, I will hold my breath.

Let’s look at the Democrat’s “100 hour” proposals:

1: The Democrats wish to strengthen House and Senate rules to curb the influence of “Lobbyists and special interest groups”. That is all well and good, but how does that measure against the right of petition guaranteed in the 1st Amendment? How will stricter rules against lobbying really benefit the average American who has precious little, if any, access to his Representative or Senator in the first place? Will the new rules apply to all special interest groups or will some be exempted? The NEA comes to mind here. In the interest of full disclosure I will admit that I am a honest to goodness, card carrying member of the NEA.

2: The second proposal is to make all new Federal spending “pay as you go.” Now, I am all for this. I believe that the government should not borrow to meet its budget. Yet, pay as you go funding is problematical. There are certain emergencies which arise which have to be handled by the government and are not considered when making a budget. The devastation of the Gulf Coast and terrorist attacks are prime examples of this. There are also fixed increases in the Federal budget. If everything is pay as you go, how will these emergencies be met? What programs will be cut to provide a contingency fund? How will annual cost of living and other adjustments be funded? The Democrats seem to be very vague on the details of this plan.

3: Implement all of the recommendations of the 9/11 commission. OK, let me say this, I am adamantly opposed to this. Implementing the recommendations of the 9/11 commission WILL NOT provide any real increase in America’s security and instead, I believe, only weaken it by giving Americans a false sense of security and wasting billions of tax dollars which could be more effectively spent on measures which will actually increase our security and safety. In order to increase security in our country we need to enact strict border control, increase the scrutiny upon those wishing to enter this country, deport all those who are here illegally or have overstayed their visas and insist that ANYONE entering the United States from a foreign country either be a US citizen or have a visa. We also need to enact and enforce severe penalties for anyone who hires, transports, educates or aids illegal immigrants. That includes Representative Pelosi. Once we have basic border control and security in place, then and only then can we begin to address the other areas like better communications and container inspection.

4: Raise taxes on oil companies to achieve “energy independence”. WHAT???????? How does raising taxes on oil companies, who will only pass the increased cost to the consumer, increase energy independence? Oh, I suppose some of the increased revenue will go to some federal pork research project aimed at producing “alternative fuels”. I suppose that the increased cost of fuel at the pump will cause some Americans to drive less and perhaps buy more fuel efficient vehicles, but in reality, this is simply a confiscation of wealth by the government. If the Federal government really wants to make the United States energy independent it needs to promote the production of electricity by nuclear power as well as hydroelectric power and other non- carbon based fuel methods. There is no reason why the United States should not have at least 80% of its electricity generated by nuclear power. None, except for public fear of nuclear power. I hate to use France as an example but, the vast majority of France’s electric power is safely and cleanly generated by nuclear power. It should be the same here. That would free up vasts amounts of natural gas, coal and oil to be used in other ways.

5: Half the interest on student loans. One of the main reasons college tuitions have spiraled out of control is because of student loans. The government should simply end student loans and all Federal funding that is not researched based to colleges and universities, the military academies excluded. That would either force the states to cover the costs of higher education or it would force the cost of higher education down. As long as the federal government provides low cost loans to students the cost of higher education will continue to rise. That, my friends is simple economics. I won’t even go into how unfair it is to force a family in say Mississippi to subsidize the education of an undergraduate at let’s say Harvard, Yale or Stanford through federal student loans. How about this? Why doesn’t Congress make all higher education costs tax deductible? That would certainly lessen the burden of higher education on the average American family and do it without a massive transfer of wealth.

6: Oppose the privatization of Social Security. Why would the Democrats wish to do this? Social Security is nothing more than a Ponzi scheme. Giving each American government insured retirement accounts seems a much better option. Yet, the Democratic party is vehemently opposed to this idea. Why? Because there is no “Social Security Trust Fund”. It is a fiction and if Social Security were privatized the fiction would be revealed. The government should trust the people to best save for their retirement. Setting up a government insured retirement fund would do just that. Allow people to pay into the retirement fund as they work and allow them to make investment choices on the money they save. What is the problem with that? Millions of Americans already have 401(k) and 403(b) plans which do just that as well as IRAs. No one seems to be complaining yet.

7: Raise the minimum wage to $7.25 an hour. I have explained why raising the minimum wage makes terrible sense economically before but let me explain it again: Raising the minimum wage is inflationary. Any time the government raises the cost of labor the net effect is to devalue the currency. How? By raising the cost of labor, the cost of the goods and services produced by that labor must also rise. In order to pay for the more expensive goods and services, consumers must and will demand higher pay. As everyone receives higher pay, the real value of the currency decreases and then we have inflation. If Congress raises the minimum wage, expect higher prices or expect companies who hire minimum wage workers to hire fewer of them. That means higher unemployment at the lowest wage earning level as there are fewer jobs available. When was the last time you say a soda jerk at your local drug store or a pump jockey at your local gas station? Yes, I know there are states like New Jersey and Oregon which require an attendant to pump gas but in most states the self-service gas station is the norm. If you don’t believe that raising the minimum wage is inflationary, imagine what would happen if Congress quit pussy footing around and simply raised the minimum wage to $100 per hour.

Finally, negotiate drug prices for Medicare part D. Again, I hold that part of the reason drug prices are so high in this country is because of government interference, not for lack of it. Furthermore, the government has no real negotiating power vis a vis the pharmaceutical companies. If a company doesn’t like the price it gets from the United States government, it will just sell its wares elsewhere. It is not as if the United States is the only consumer of drugs.

As you can see, the Democrats vaunted “First 100 hours” plan is really nothing more than a repackaging of previous failed legislative initiatives. If this is the best that Pelosi, Reid et al. can come up with, I am afraid that the next two years will be fraught with malaise and half-hearted attempts at “reform” and that there will be no real attempts to correct some of the fundamental flaws in our government.

For further reading, I think you should examine the Heritage Foundation’s special report entitled, “The 100 Hour Agenda: The New Congressional Majority’s Uneven Proposals.”