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Could Have, Would Have, Should Have

How Republicans could have avoided the trouble they're in.

11:00 PM, Nov 6, 2006 • By FRED BARNES
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REPUBLICANS FACE THE PROSPECT of losing a substantial number of Senate and House seats today, but it didn't have to be that way. For sure, the war in Iraq was always going to be a drag on Republicans. And an election in the sixth year of a presidency is often perilous for the president's party, a pattern that's held true in year six of the Bush era.

But Republicans have made matters worse by abandoning the reform agenda that animated their capture of Congress in 1994 and helped George W. Bush win the White House in 2000 and keep it in 2004. With scarcely a fight, Republicans gave up on Social Security reform in 2005, immigration reform in 2006, and never really got started on tax reform. Bush also cast aside the overarching theme for his domestic policy--the Ownership Society--without an explanation.

The consequences have been dire. Republicans have little to boast about in Bush's second term except the strong economy--and it's largely the result of tax cuts enacted three years ago. When Democrats bring up Iraq or corruption, Republicans have no countervailing issues. The president has made a strong case against Democrats on national security and taxes. But voters have been unresponsive and it's easy to understand why. It's Bush himself who causes them to feel safe from lax security and tax hikes. Whatever happens in tomorrow's election, he'll be in the White House for two more years to protect them from Democratic excesses. But what if Republicans had followed the president's lead last year and tried to overhaul Social Security and enact personal investment accounts? If they'd succeeded, voters would now be perusing the stock tables to decide how to invest their payroll taxes. Had Democrats blocked reform, Republicans would be pointing out the gains voters were missing in the bull market. Either way, Republicans would be ahead. So would the country.

Instead, they balked at Bush's modest reform proposal. House Speaker Dennis Hastert thought it too risky, though the president had trumpeted his idea, with impunity, in two national campaigns. Another Republican leader told Bush that House Republicans would line up behind him--but only after he'd drummed up a strong national majority in favor of entitlement reform. In truth, it already existed. Private accounts financed out of payroll taxes, while controversial, have long been popular. Left alone in the drive to fix Social Security, the president, disappointed and exhausted, finally gave up the fight.

For Republicans, 2006 was going to be the year they bravely took on America's immigration problem. Despite a division among Republicans on a solution, an ultimate agreement seemed quite possible. House Republicans would get beefed up security along the border with Mexico well beyond what Bush wished. In return, Bush and Senate Republicans would get what they wanted: additional security plus a program to bring foreign workers here temporarily and a plan for illegal immigrants in the U.S. to "earn" citizenship.

There were (and still are) many ways to reconcile the two positions. The simplest was to stagger the implementation of the three parts of immigration reform by requiring a secure border first, followed a few years later by the guest workers' program and citizenship scheme. Hispanic Americans and their influential lobbying organizations were willing to go along. And Democrats, faced with mass defections, would have been forced to accept the GOP compromise.

For lack of leadership, the compromise never materialized. Bush balked at taking charge of the issue. Hastert, cautious to a fault, declined to take a firm position. Roy Blunt, the House Republican whip, opposed the compromise. Another Republican leader assured me that House Republicans were in an ideal position. They could boast of having "blocked a bad Senate bill"--a bill backed by the White House--and that would serve them well in the election.

It hasn't. Nor has the last-minute border security measure authorizing 700 miles of fence that Bush signed in October. And opposition to "amnesty" in any form has failed to immunize Republicans. A good example is popular congressman J.D. Hayworth of Arizona, one of the loudest foes of letting illegals become citizens. He faces an unexpectedly strong Democratic challenger--in the state with the biggest influx of illegal aliens in the country.

In the end, Republicans raised the immigration issue, touted it as a national crisis, stirred the nation's interest, then failed to come to grips with it. But imagine if Republicans had agreed on a compromise and enacted a "comprehensive"--Bush's word--immigration bill, dealing with both legal and illegal immigrants. They'd be justifiably basking in their accomplishment. The American public, except for nativist diehards, would be thrilled.

Tax reform could have had a similar effect. It may be hard to achieve, but it's both important and favored by the vast majority of Americans. Here again, however, Republicans were anything but bold. A tax panel commissioned by Bush concentrated on easing the burden imposed by the Alternative Minimum Tax at the expense of fundamental tax reform. Not surprisingly, the panel's timid recommendations produced little enthusiasm. And the tax issue quickly faded away.

The White House didn't have to acquiesce. It could have pressured the tax commission to come up with a sweeping reform plan. Or it could have proposed its own blueprint for reform. There's no secret about what's needed: lower rates, fewer deductions, a broader tax base, simplification of the tax code, elimination of double taxation of dividends, and a lot more. Instead, the White House let the moment pass.

When I interviewed Bush a year ago, I asked him about his concept of an "ownership society." He had been using the phrase as the theme for his domestic program (with the exception of immigration) and it was beginning to catch on. It included healthcare reform and "lifetime" IRAs, a reform of retirement instruments, as well as tax and Social Security reform. The president was so enthusiastic about this that he cited it in his second inaugural address.

He saw ownership as a boon to personal responsibility, accountability and independence, especially from government. "Government sometimes, because you're dependent on it, undermines the sense of personal responsibility," he said. It was a spur to the poor "not to remain poor and to have that dream of owning something," he told me. And it gave an owner "a vital stake in our country."

Bush inexplicably dropped the phrase from his speeches this year. Perhaps it didn't poll well. Perhaps it was too radical. An "ownership society" represents a sharp new direction in domestic policy designed to encourage citizens to be more self-reliant and less dependent on government. It's a kind of demand-side conservatism with citizens gradually asking for less and less federal assistance.

Now, an "ownership society" is all but forgotten, Republicans as reformers a thing of the past. The party unity that would have come from settling differences on immigration is absent. As a result, Republicans have bickered throughout the 2006 campaign. If they have an agenda for the next two years, they haven't told voters. Democrats don't have an agenda either, they're the "out" party. They can get away with it. Republicans can't.

Reform is appealing to voters because they sense, quite correctly, there's much in need of reform. Besides Social Security and immigration and taxes, there's Congress itself. By skimping on congressional reform, too, Republicans made themselves all the more vulnerable to exaggerated charges of corruption. Reform, of course, is the opposite of corruption.

It's unknowable how many Senate and House seats might have been saved had Republicans championed reform. But surely Republicans would have been better off with a program of reform to flaunt. The campaign would have been elevated. And win or lose, Republicans would have something vital to talk about for the final years of the Bush presidency.

Fred Barnes is executive editor of The Weekly Standard. The article originally appeared in the November 6, 2006 Wall Street Journal.