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The Lost Era of Economic Growth

Republicans have neglected their best issue.

Apr 1, 2013, Vol. 18, No. 28 • By FRED BARNES
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President Obama highlighted the need for strong economic growth in his State of the Union address in February, citing it 11 times. He mentioned it 5 times in a speech in Illinois in mid-March. Last week, when he nominated Tom Perez as his new labor secretary, Obama declared, “As I’ve said before, my top priority as president is doing everything we need to do to make sure we’re growing our economy.”

Ah, the good old days

Ah, the good old days

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White House press secretary Jay Carney is even more relentless on the subject. He brought up economic growth 59 times in six press briefings between March 11 and 19. “The proposals [the president has] put forward keep the number one priority in mind, which is economic growth and job creation, not deficit reduction solely for the purpose of reducing the deficit.”

Obama hasn’t a clue about actually generating economic growth—his policies thwart it—but he’s awfully good at messaging. And growth is as good as it gets as a message for public consumption. It’s positive. It’s believable even for Obama because we’ve had strong economic growth routinely in the past, prior to his presidency. Best of all for Obama and Democrats, it steals an issue Republicans had not only owned but also relied on as their most effective talking point.

Republicans have reverted to the pre-Reagan era. In those days, they were the party of spending cuts, though GOP presidents rarely followed through. Before he reached the White House, one of Ronald Reagan’s favorite talking points was the welfare queen, a woman who gamed the welfare system to drive a Cadillac and live lavishly. Republicans were the negative party.

That changed in the late 1970s. Republicans ran on tax cuts and growth in 1978 and made modest gains in the House and Senate. More important, Reagan, prodded by Jack Kemp, adopted that agenda in his 1980 campaign and, as president, pushed through a 25 percent cut of income tax rates as the centerpiece of his economic policy. The economy boomed and growth became the GOP’s economic watchword.

But confronted with towering deficits and a national debt in fiscally dangerous territory, Republicans have become the negative party again. This is partly understandable. Obama’s reckless spending has forced congressional Republicans to be responsible and champion spending cuts, reform of entitlements, and a balanced budget.

So while Obama wants to give things to voters, Republicans want to take them away. Or they’re alarmed about a looming debt crisis that’s an abstraction and thus not a pressing concern of many voters.

Republicans need to escape this box. The media won’t help. They’re genetically inclined to follow the lead of Democrats and treat Republicans as obsessive about cutting spending and committed to protecting the interests of the wealthy. The only way out is economic growth.

A surprising number of Republicans have figured this out. Rep. Paul Ryan, as the author of the House Republican budget, is required to defend its Medicaid cuts, reform of Medicare, and other reductions. Yet he believes growth should be the top priority for Republicans, just as it was for his mentor, Jack Kemp. And his budget would provide the means to spur growth by creating two income tax rates, 10 percent and 25 percent.

Ted Cruz, the ubiquitous new senator from Texas, is also a believer. Cruz told me that “growth and opportunity” should be tattooed on every Republican official’s hand to remind them what to talk about. He was joking, but his point was clear. Cruz hopes to sponsor pro-growth policies that could attract Democratic supporters.

Outside Congress, Jim Gilmore, the former Virginia governor who heads the Free Congress Foundation, is agitating in speeches and media appearances for growth. “There’s got to be an imperative to grow the economy,” he says. “There hasn’t been any discussion of that in the last two years. Republicans are making a mistake by putting so much emphasis on the spending side.” Gilmore favors three tax rates on income—10, 15, and 25 percent—and a tax credit that would keep a family of four earning up to $43,000 from paying any income tax.

Slow growth under Obama “is devastating the fabric of the nation,” Gilmore says. Democrats are “blind to growth. They’re not organically growing the economy. They’re pumping up the economy” with stimulus dollars and the Federal Reserve’s easy money policy.

Jeb Bush, ex-governor of Florida, is another advocate of making growth a top priority for Republicans. “Every speech I give is totally focused on economic growth,” he told me. (His recent speech to CPAC was an exception.) It gives Republicans “a huge opportunity to lay out alternatives [and] challenge the president’s orthodoxy” on economic policy.

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