Congress needs a vision for prosperity

Congress needs a vision for prosperity
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As 2018 begins, there’s chatter about what Congress will do after passing the Tax Cuts and Jobs Act. The Trump administration signaled a new bipartisan approach on infrastructure, a sentiment shared by Senate leadership. The House, however, seems poised to reform welfare through budget reconciliation.

Static analyses of the recently passed tax bill fail to capture the dynamic effects of increased economic activity and job creation that tax cuts generate. Regardless, fewer taxes will still go into the federal coffer, leading to larger deficits unless met with spending cuts. The biggest spending obstacles Americans face are the rising cost of healthcare and the rapidly escalating cost of Social Security and Medicare.

Although the tax bill appropriately repealed ObamaCare’s individual mandate, onerous federal health insurance regulations still remain, leaving patients and consumers again with double-digit premium increases, on average, next year.

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Furthermore, the national debt is quickly approaching $21 trillion, or closer to $110 trillion including unfunded liabilities of Medicare and Social Security. In this environment, Congress’ 2018 priority must be to reduce government spending that’s contributing to higher costs of living, subpar healthcare system, and fewer Americans flourishing.

 

Congress will have to address the continuing resolution that funds the federal government in January. It should enact real reform that bends the cost-curve of Medicare and Social Security.

Sadly, some want to use this opportunity to bail out health insurance companies and create new reinsurance programs that pilfer tax dollars while further diminishing the quality of healthcare.

Members should outright reject these bail outs. They must also resist the temptation to bust the budget caps or adopt a standard that for every dollar increase in defense there is a dollar increase in non-defense discretionary spending.

The Texas legislature recently provided a good example as it successfully adopted fiscally conservative budgets. Doing so means Texans pay lower taxes while still funding essential services, allowing the state to have an economic environment conducive to creating 25 percent of all new jobs nationwide since 2007.

The Texas model is a proven recipe that should be emulated in D.C. Congress should take a page out of the Texas playbook by using budget reconciliation to finally make good on the promise to fully repeal ObamaCare and curtail spending to empower people with more choices on how to satisfy their desires.

Welfare reform is also critical for empowering impoverished communities and providing a pathway to prosperity. This can and should be done through strengthening families and promoting the dignity of work. But the groundwork has simply not been laid, as far too often people rely on the government as the head of the household and choose to live on welfare instead of working.

Regardless, the Trump administration and Congress should carefully consider ‘bipartisan’ notions for a new $1 trillion infrastructure bill, which could serve as a remix of President Obama’s failed stimulus approach. Also, it should reconsider a new $1 trillion food and farm welfare bill without significant reforms to both the food stamp program and agriculture subsidies.

What’s needed is an agenda that unifies and empowers Americans by diminishing the power of Washington. Fully repealing ObamaCare, reforming Medicare and Social Security, enacting welfare reform, and cutting discretionary spending can achieve this agenda. It cannot come from increasing government spending and giving D.C. more control over our lives.

The administration and Congress have greatly boosted prosperity in America through regulatory and tax reforms, but they must now lay out the next steps of their vision that puts the American people first and the interests of the Washington cartel last.

Vance Ginn, Ph.D., is director of the Center for Economic Prosperity and senior economist and Drew White is senior federal policy analyst, both at the Texas Public Policy Foundation.