Thursday, March 29, 2012

Romney's in a Sweet Spot if . . .

If the Supreme Court overthrows the individual mandate, doesn’t Mitt Romney say “I told you so” and emerge as the big political winner?

All along he’s been arguing that only states have mandate power, and that the federal government under the commerce clause, or any other law, is guilty of massive regulatory overreach with Obamacare.

While fending off criticism from Rick Santorum and others about the Massachusetts mandate, Romney has always said it was a state issue, not a federal one. And if the Supreme Court agrees, it would have to give the former governor a leg up in credibility with Republicans and the general public.

President Obama, meanwhile, would emerge as a big political loser. Obamacare was the central signature domestic economic plan for his administration. What else does he have to show for nearly three and a half years in office? An $800 billion stimulus plan that didn’t work? A tax on rich people? An assault on oil and gas companies?

Besides Obamacare, what can the president really point to as an accomplishment?

The other big winners in the event the mandate is overturned are business and the economy. Talk to almost any CEO and they’ll tell you that the tax-, regulatory-, and insurance-cost threats from Obamacare have stopped them from hiring. Or, if they have made new hires recently, they’ve gone a lot slower than would have been the case without Obamacare. Remember how many companies asked for Obamacare waivers this past year. That shows their distaste for the legislation.

Of course, there’s still the huge tax cliff coming early next year, when virtually the entire tax code is upended. But Obamacare, with all its tentacles, has been a huge growth impediment. The Supreme Court could remove that jobs barrier, not to speak of the potential fiscal bankruptcy suffered from the gigantic costs of new Obamacare entitlements.

Mitt Romney’s job in a post-Obamacare world is to show voters what his alternative would be. In a recent op-ed in USA Today, he begins to set this out: tax benefits for individuals purchasing insurance outside their workplace; more competition and consumer choice for insurance plans; medical-malpractice reform; interstate insurance options; and state-determined insurance protection for those with preexisting illnesses. All this is a good start. Rather than a government-run health-care reform, Romney is pushing a market-run reform, which has long been a Republican idea.

So we’ll see in a couple of months how the Supremes decide the Obamacare case. But Romney, the likely GOP nominee, is well positioned to take advantage of a scenario where the Obamacare federal takeover is rejected.

Tuesday, March 20, 2012

Ryan's Supply-Side 2012 Budget

There are a lot of really good things in Paul Ryan’s new budget, which is a stark contrast to the Obama budget. Ryan cuts spending by over $5 trillion, lowers the deficit by over $3 trillion, and brings the debt-to-GDP ratio down to 62 percent. All of these are ten-year totals.

Ryan also cuts back on small entitlements, block-granting them to the states. Then, of course, there’s the new and improved Medicare-reform plan.

But what I really like about this year’s Ryan budget is his singular emphasis on pro-growth, supply-side tax reform.

Working with Dave Camp, Ryan has laid out a great blueprint for Mitt Romney and the whole Republican party. In particular, while listening to the budget meister at a small luncheon for conservative journalists and think-tankers in Washington on Monday, what I heard again and again was an emphasis on economic growth.

This is not to say Ryan is not worried about spending, deficits, and debt, which of course he is. But his reform message to limit government really spends a lot of time on tax simplification, ending cronyist carve-outs and loopholes, and of course dropping the personal and corporate rates.

Growth solves a lot of problems. All those GDP ratios for spending, deficits, and debt look a lot better when the GDP denominator is rising rapidly. Not through inflation, but through new incentives to promote real growth.

Unfortunately, the first cut of the Ryan budget is based on CBO static estimates of growth and revenues. That is a budget-committee obligation. But I’m told that on Thursday we will get a different set of numbers based on dynamic scoring of lower tax-rate incentives. I’m guessing the growth difference is 3 percent static and 4 percent dynamic. Dropping tax rates as much as Ryan does, which reminds me of Reagan-era tax reform, could probably produce even more growth. Therefore, the budget could be balanced in a much shorter period of time with much lower debt ratios.

Let’s see what the second set of numbers brings.

Tuesday, March 06, 2012

One-on-One with Mitt Romney (Part I)

In my interview with Mitt Romney yesterday he stayed on message for growth, jobs, less debt, and smaller government. He reaffirmed that “he won’t set his hair on fire”, meaning no splashy off message statements to distract from his fundamental economic push. He acknowledged that the primaries have made him a much tougher, better candidate and more prepared to carry the fight to Obama.

He emphasized his 20 percent supply-side reduction in income tax rates. And interestingly, in response to my question, he said he would take a look at indexing the capital gains tax for inflation. That’s a pro-growth idea supply-siders have pushed for many years. I hope he finally adopts it.

Thursday, March 01, 2012

A Good Man

Sincere condolences to the Breitbart family on the terrible passing of Andrew. He was a smart, innovative, path-breaking media leader. And a good man. His appearances on our show always sizzled. He broke so many important stories. At 43, he passed way too soon. A tragedy. May he rest in peace. God bless.