Rep. Paul Ryan (R-Wi) taking over the House Speakership from Rep. John Boehner (R-OH)
Wikimedia Commons/Office of Speaker Paul D. Ryan

On a lot of issues Donald Trump has been very sketchy on how he wants to run the federal government. He has said he wants to cut taxes and how he wants to do that. However, other than saying he wants to rebuild the military, that he wants to build a wall to separate us from Mexico, and that he wants to make foreign trade fair for the United States (whatever that means), he has been very vague on just about everything else. Yet while Trump was busy winning the Republican nomination, Speaker of the House Paul Ryan and other Republican members of Congress have been constructing a very detailed plan on what should be done. The congressional Republicans call it a “A Better Way“ to contrast it with the standard Progressive programs that usually end up throwing dollars at problems.     

For a number of reasons I would expect a President Trump to back most if not all of the Better Way program.  First, Trump apparently knows the limitations of his own knowledge, and has said he will surround himself with the most knowledgeable experts to advise him. And Ryan is most definitely one of the foremost congressional experts on the economic problems this nation faces. Second, Trump absolutely needs the cooperation of Congress; he will not be able to achieve anything without their being on his side. Third, when Trump and Ryan met, the meeting was reportedly respectful and collegial with Trump listening carefully and respectfully. One can hope that Ryan will be able to moderate some of Trump’s worst instincts.

The A Better Way Program

What then is this GOP master plan for attacking our common problems? The first thing to note about it is this program is not just something Speaker Ryan and senior GOP leaders in the Congress dreamed up. It did begin with them, including efforts of some of the most senior House Republicans, such as: Budget chairman Tom Price (R-GA), Education and the Workforce chairman John Kline (R-MN), House Ways and Means chairman Kevin Brady (R-TX), Agriculture chairman Mike Conway (R-TX), and Representatives Jackie Walorski (R-IN), Andy Barr (R-KY), and Bradley Byrne (R-AL). They conceived this plan as a way of applying conservative principles to each of the major policy problem areas facing the nation. These problem areas include:

• Reviving our moribund economy to generate well-paying jobs.
• Reforming taxes to encourage growth and to make U.S. companies competitive again with foreign companies.
• Strengthen national security.
• Improve health care by repealing and replacing Obamacare.
• Eradicate poverty.
• Return the operations of government to a more constitutional manner of functioning.

The goals and motivation for the program are summarized in a video produced by Speaker Ryan’s office shown below. In fact Ryan’s office has helpfully produced a number of these videos summarizing each part of the program, and I will embed them at the appropriate places to allow the congressmen to describe the pieces of their program in their own words.

Having conceived a framework for the program, the congressmen then went across the country to consult with community leaders, the individuals who know their local problems best, on the best ways to implement it. As an example of such a community leader, Ryan’s office produced another video featuring Paul Ryan’s personal friend, Bishop Shirley Holloway. Bishop Holloway is CEO of House of Help City of Hope, which is a faith-based rehabilitation home in Washington, D.C. In the video Bishop Holloway announces the Better Way program to her followers.

You can download PDFs detailing the conception of the program as it stands today with these links for the economy, tax reform,  national security, health care, attacking poverty, and improving government. In what follows below, I will take a very cursory look at each of the plan’s parts.

Improving the Economy and Creating More Jobs

What occupies the electorate’s attention the most is the economy and the possibilities for better growth creating more and better jobs. Therefore, I will take a look at this part of the plan first.

Although tax reform is one of the economy’s most immediate needs for greater growth, this subject is treated as a separate part of the program, probably because of its complexity. In this section of the plan, the concentration is on regulatory reform, and how to wrest control of regulation creation away from the executive branch’s bureaucrats back into the hands of Congress. As the situation exists today, Congress has delegated to the executive branch over many decades the power to create law by issuing regulations. The resulting administrative law is beyond any congressional control unless Congress repeals the authorizing statute giving the power to executive departments and agencies.

To address this problem the plan would legislate a set of requirements to be satisfied before any executive branch regulation could be put into effect. Any proposed regulation would still have to be authorized by a statute, but before it could become administrative law, a report on its estimated impacts and costs would have to be given to Congress and Congress would have to vote on it.

In addition, the destructiveness of the Dodd-Frank Act on businesses, especially small community banks, is noted and Dodd-Frank is slated for either complete repeal or at the very least severe pruning.

Taxes

The tax reform piece of the A Better Way program would result in tax reductions for both individuals and companies. While not being an actual flat tax, individual income tax brackets would be reduced from seven tax brackets to three, with the top income tax bracket fixed at 33 percent as opposed to the current 39.6 percent. The lowest tax bracket would be either zero or 12 percent, depending on the combination of the standard deduction with personal exemptions. The intermediate tax bracket would be at 25 percent. The corporate tax rate would be reduced to 20 percent from its current level of 35 percent, making U.S. corporate taxes competitive with Europe’s. The House GOP plan would also abolish the alternative minimum tax and the estate tax. Below is the GOP video on the tax plank of the plan.

Most importantly, the tax regime for international corporations would be changed from a world-wide tax approach to a territorial tax regime. Currently, a U.S. multinational corporation has to pay taxes on both domestic and international profits. Almost all other governments in the world have a territorial tax regime that taxes only profits of corporations earned within their borders. Both higher U.S. corporate tax rates and our world-wide tax regime place our companies in a very uncompetitive position relative to foreign companies, even for sales within our own borders. Dropping the corporate tax rate to 20 percent and making the regime territorial would instantly make our companies internationally competitive again.

National Security

“Our enemies no longer fear us, and too many of our allies no longer trust us.” According to Rep. Ryan in the video below, this is the direct result of President Obama’s foreign policy. Withdrawing the U.S. as much as possible from overseas conflicts, Obama has created a security void into which ISIS, Russia, Iran, and even China in the South and East China Seas are moving.

This is probably the only problem area that will require a significant increase in federal expenditures. Not only will U.S. armed forces have to be built up after Obama and company have reduced them, but large expenditures would be required to enforce security at our borders. This would include building Donald Trump’s wall, as well as enforcement of immigration laws within the country.

This is probably the extent to which the Congress can help reverse the waning of American influence overseas and contribute to increasing our national security. To do much more would also require a Republican president.

Republican congressmen in the video below elaborate the national security part of the Better Way plan.

Additional information on Republican attitudes about national security, particularly about cyber security, can be found in the audio recording below of a phone call between Hugh Hewitt and Speaker Ryan.

Health Care

Obamacare has been a costly failure as I discussed in the posts The Debilitating Effects of Obamacare and Obamacare:The Democrats’ Gift to Republicans. Therefore, the very first GOP pledge in the health care plank is to repeal Obamacare. Then, since the health insurance companies would no longer have to offer the same benefits to everyone (maternity benefits are not required for most men!), they could offer policies with varying benefits as they did prior to Obamacare. Then people with pre-existing conditions or other complex needs might be subsidized separately by the federal government. Also, health insurance could be made portable so that it could be taken by individuals from one job to another.

To help “bend the cost-curve down” as Obama once promised to do, health insurance companies could be forced to compete with each other by allowing them to sell policies across state lines. Also, the Better Way plan would allow small businesses to band together to offer small business plans, aka association health plans(AHPs). Because these AHPs would represent a larger market than would be allowed by single small businesses, they would have increased negotiating power with the insurance companies.

Another factor that has driven costs up is medical legal liability. Faced with medical liability, doctors are forced to practice defensive medicine by ordering expensive diagnostic procedures they otherwise would not have. In the Better Way document on medical care, one finds the statement

Attacking Poverty

The big problem with progressive programs for fighting poverty is they have a tendency to replace work as a source of income. Poor people can then find themselves in a government welfare trap, where they actually can lose income by accepting a job. If an individual is raised in a family caught in a welfare trap, that person is more than likely to find himself/herself imprisoned in the same trap. In the introduction of the GOP PDF on the poverty part of the Better Way program, we find

Improving Government

The United States of America seems to have lost its way and somehow has stumbled onto Friedrich Hayek’s Road to Serfdom. At the end of this road is the kind of totalitarian government the world experienced with the Germany and Italy of the 1930s and 1940s, as well as with the Union of Soviet Socialist Republics. We have gone far enough along that road that we see a President of the United States who claims he can change the meaning of laws by executive order. If you have no idea what I am writing about, please read my posts The Economic Nature of Fascism, The Corruption of the Democratic Party, and Democrats Want to Imprison Scientific Skeptics?

As Speaker Ryan has mentioned in a number of the videos, much of the problem comes from the executive branch and some independent agencies effectively changing laws through reinterpretation, or in some cases with President Obama, refusing to enforce laws as passed by Congress. As you might remember, Obama has refused to enforce long-standing immigration laws, nor will he enforce the Defense of Marriage Act.

We have also noted in the section on the economy above how the executive branch makes administrative law by fiat, and short of repealing statutes that authorize the rule-making power in specific instances, there is absolutely nothing Congress can do. Needless to say, if Congress and the Presidency are split between different parties, Congress can accomplish such a repeal only if the President agrees or if the Congress could pass it over the President’s veto.

Rules can be challenged in court by individuals and companies affected by them, but courts often give wide latitude to the discretion of bureaucrats making the rules. In an excellent history of the rise of the administrative state, The Birth of the Administrative State: Where It Came From and What it Means for Limited Government, Dr. Ronald Pestritto cites a 1947 Supreme Court case, in which the Securities and Exchange Commission was trying to enforce an ad hoc rule against C.T. Chenery Corporation. Initially, the Supreme Court had found in favor of Chenery, because there was nothing in the authorizing legislation that banned what the company was doing. However, as Pestritto writes,

But four years later, the SEC found the Court friendlier to its ad hoc decision making. Having kept the Chenery case in litigation during this time, the SEC persuaded the Court to change its mind, and in 1947, the Court concluded that any “rigid” requirement that agencies always act according to pre-established rules “would make the administrative process inflexible and incapable of dealing with many of the specialized problems which arise.” To insist that agencies follow pre-existing rules in making their decision would be, the new Court claimed, “to exalt form over necessity.” The rule of law, in other words, would have to take a back seat to the social expediency provided by expert administration.

As a result of the Chenery case, increasingly more “legislative” power has come into the hands of the President and his executive branch. And as the bureaucrats of the executive branch have increasingly leached more of the legislative power away from Congress, the farther we travel from being a representative democracy.

Although this danger was cited in reference to its effects on the economy, its ramifications go beyond the economy to issues of how we are allowed to live, what we are allowed to say in public, and how we can use our own property. Anything an executive department or an independent agency can regulate is fair game. The courts might be some defense against such an assault on democracy, but how long will that last as the government becomes more authoritarian?

To combat an evolution toward a fascist state, the Republicans in the Better Way program have proposed four lines of attack:

1. Reestablish and enforce limits on the authority of an agency.
2. Reform and limit the rule-making process in departments and agencies.
3. Have Congress exercise the power of the purse over executive branch departments that threaten to go rogue.
4. Conduct more robust oversight of the executive branch.

This is a program that is far more detailed than can be covered in this essay, so I will defer further discussion to a future post. In the meantime, you can get more information on what the GOP wants to do to wrest power back from the executive in their PDF on the subject. Also, take a look at their video on the Constitution embedded below, which is introduced by Rep. Cathy McMorris Rodgers (R-WA), Chairman of the House Republican Conference.

Some Final Thoughts

Speaker Paul Ryan, his colleagues, and many community leaders cooperating with them have pulled together an immense, detailed, and coordinated plan to turn this country around away from a hydra-headed catastrophe. Should he be elected President, Donald Trump would be a fool not to support it. For that matter, so would a President Clinton, should she be elected; however, her view of reality is so different, one could not expect her to accept any part of A Better Way.

The only criticism I have of this program is nevertheless a formidable one. No where in the plan do the Republicans explicitly discuss the urgent need to not only cut federal expenditures, but most especially to cut mandatory entitlement expenditures. I demonstrated in the post The U.S. Federal Government Budget that without such cuts, the U.S. government will spend itself into virtual nonexistence. In roughly a decade’s time (two at the outside), expenditures on the entitlements (Social Security, Medicare, and Medicaid) plus interest on the national debt will absorb every single penny of federal revenues. There will nothing left to spend on other government functions, like defense. We can not tax our way out of the problem because of Hauser’s Law. We can not simply move assets from the discretionary part of the budget, which includes the defense budget, because that piece is much too small. Paul Ryan and his colleagues are aware of the problem, as he mentioned at a Millennial Town Hall at Georgetown University. As a final word on Ryan’s thoughts, consider the video of this town hall below.

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