Hostile Takeover: Resisting Centralized Government's Stranglehold on America (17 page)

This logic has been the problem all along. It demanded that a BBA needed to be “bipartisan,” that we needed to work across party lines to get anything done. It makes no sense. Wasn’t this reaching across party lines the very form of two-party collusion that caused our government’s massive debt burden in the first place? Hatch himself had collaborated with Senator Edward Kennedy, the Liberal Lion from Massachusetts, in a major expansion of government-funded health care known as “S-CHIP” in 1997, the same year he picked up the cudgel for Paul Simon’s progressive BBA. It all makes your head spin.

When it comes to drafting legislation, isn’t a better approach wholly nonpartisan? Shouldn’t legislation be drafted based on what is needed, not just on what would be acceptable to the very political forces that caused the problem you are attempting to fix?

That’s the approach Lee had taken, the one that his hometown paper considered naive. Prior to the rise of the Tea Party movement, someone like Lee bucking authority would likely have been ignored by Hatch and the Republican establishment or even punished with poor committee assignments and other repercussions.

But the rise of the Tea Party movement changed everything. As Lee noted prior to his impending election: “Can one person make a difference out of 100? No. But I won’t be just one person. I’ll be aligned with a number of other people who share these same principles. They can ignore one person, but they can’t ignore 10.”
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Lee was right. He was not ignored. After several rounds of negotiations, Hatch accepted the major parts of Lee’s Balanced Budget Amendment. The new version of the BBA, agreed to by Lee and Hatch, included Lee’s 18 percent cap on spending as well as a three-fifths majority requirement for any debt ceiling increase. Additionally, Lee strengthened Hatch’s waiver for vague “threats to national security.” Rather than a simple majority, the newly revised Amendment required a three-fifths majority, in the event of “imminent and serious military threat[s] to national security,” and permitted a waiver for “the specific excess of outlays for that fiscal year made necessary by the identified military conflict.”
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This compromise bill was fully endorsed by the forty-seven members of the Senate Republican Conference.
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After just a few weeks in office, Lee had accomplished something that no other Republican had ever accomplished, uniting the entire Senate Republican caucus around the right BBA.

How did Lee succeed? Part of his ultimate success at the negotiating table was due to his legislative entrepreneurship. He was willing to stick his neck out and fight for what he believed in, regardless of political consequences. And by taking such risks, he forced the Republican establishment to listen. Equally important was the strength of the Tea Party movement. Not only did Lee have a number of other senators, including Jim DeMint and Pat Toomey, stand up with him, but he had the majority of American voters standing with him as well.

Of course, there was another dynamic at play. Senate Republicans, starting with Hatch himself, were worried about a possible Tea Party primary challenge against the senior senator from Utah. As
Politico
reported, “Twice [in March 2011], Hatch voted with Lee and a handful of other Republicans against short-term spending bills because their cuts weren’t deep enough. Some of Hatch’s GOP colleagues have watched with amusement as the veteran seemed to mimic the young senator who’s gotten the attention of the base. ‘You can’t get a piece of paper between them,’ a top GOP senator said with a laugh.”
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Discerning the authentic from political artifice is a challenge inherent in politics. But now the facts about legislative history were available online, unfiltered, and easily accessed by mere citizens. There was a rebalancing of power going on, which was undermining the privileged access to the right information by insiders.

BY THE NUMBERS

O
F COURSE, THE WHOLE DEBATE OVER A BALANCED BUDGET AMENDMENT
to the Constitution begs the question: How would
you
balance the budget? This is a legitimate question, and many of us were rightly skeptical about advocates of a BBA who never seemed to find specific spending programs to cut or eliminate. The question had also taken on a “gotcha” quality, used by reporters when interviewing grassroots protesters, as if they were required to know the entire federal budget chapter and verse before they could make the argument that government was spending too much money it did not have.

Indeed, every line item in the entire federal budget has a special interest prepared to fight for a privileged position, subsidy, earmark, or handout. Balancing the budget takes the courage of one’s convictions, and the hope that the American people will stand with someone willing to be honest, someone willing to outline priorities based on what government can actually afford instead of the sum of all wants, legitimate or otherwise.

The 2010 election sweep not only shifted the gavels in Congress, it also elevated a number of legislative entrepreneurs who would transform the all-important budget debate. The young Paul Ryan of Wisconsin now chaired the House Budget Committee. And the new freshman class included a number of legislative entrepreneurs, eager to translate one of the key planks of the Contract from America
—
“Restore fiscal responsibility and constitutionally limited government”—into substantive, detailed legislation.

Understanding that “budget drives policy,” many of the new freshman class began looking ahead to the big budget fight they knew would take place in the spring. The new majority’s first budget needed to be game-changing. But instead of waiting passively for their leaders to come up with a plan, these entrepreneurs decided to get ahead of the curve and shape the outcome themselves, by putting together their own plans. They rolled up their sleeves, fired up their spreadsheet programs, and dug into the eye-glazing minutiae of the federal budget.

Budget fights are inherently political, and budget politics isn’t a game for the faint of heart. It requires courage, hard work, and discipline. Shifting the entire Washington debate from dramatic spending increases to dramatic spending reductions is a huge undertaking. You can’t balance a $3.6 trillion budget, 40 percent of which is borrowed, by raising taxes, trimming around the edges, or eliminating “waste.” You have to zero out dozens of agencies and hundreds of programs, and, yes, even eliminate some cabinet-level departments. You have to get Uncle Sam out of whole lines of business. Every item you identify for elimination is sure to be ringed with a bodyguard of vested interests, poised to repulse any threat. Every program, you’ll be warned, is a “sacred cow” that simply cannot be touched lest the world end and the heavens fall.

A few days after the new Congress convened, Dick Armey and I took to the pages of the
Wall Street Journal
to offer our own suggestions for “What Congress Should Cut.”
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We laid out a bold agenda, specifying more than $3 trillion in immediate program cuts, reforms, and eliminations. Or at least it seemed bold at the time.

We began by pointing out that if Congress simply returned to the baseline before the supposedly “temporary” stimulus bill of 2009, $177 billion per year would be saved, and $748 billion over ten years. And if we were to go back to 2007, the beginning of the Pelosi Congress, the savings would be even bigger: $374 billion a year, or $1.56 trillion over a decade. Under realistic assumptions, repealing Obamacare would save an additional $898 billion over ten years. Still more savings, we noted, could be realized by cutting the cord between taxpayer wallets and Fannie Mae and Freddie Mac, whose bailouts had already cost taxpayers more than $127 billion and could end up costing as much as $1 trillion. Then we listed a series of additional ideas:

• Scrap the Department of Commerce and the Department of Housing and Urban Development ($550 billion). Corporate welfare agencies, HUD, and Commerce serve mostly as giant ATM machines for private interests.
  
• Scale back the number of government employees to fiscal year 2008 ($35 billion).
  
• Eliminate subsidies for ethanol and unproven energy technology ($170 billion over ten years). These wasteful subsidies merely drive up food and energy costs.
  
• End farm subsidies ($290 billion). Washington should never have gotten into the business of trying to manipulate crop prices and output.
  
• Repeal Davis-Bacon labor rules ($60 billion). These Depression-era rules require that federal contractors be paid exorbitant, union-scale wages.
  
• End urban mass transit grants ($52 billion).
  
• Privatize air traffic control, as other nations have done ($38 billion).
  
• Privatize Amtrak and end rail subsidies ($31 billion).
  
• Reform federal worker retirement ($18 billion).
  
• Retire AmeriCorps ($10 billion). Why are we paying people to volunteer?
  
• Shutter the Small Business Administration ($14 billion).
  

Defense, which represents a fifth of the budget, also needed to be on the table. Having been doubled in size during the Bush years, the Pentagon undoubtedly suffers from significant waste and duplication that should be cut. Our suggestion: implement the savings of $145 billion, over five years, proposed by Defense Secretary Robert Gates, who served in that capacity under Presidents Bush and Obama.

Not having room in 900 words for a comprehensive approach to entitlements (I attempt to take such an approach in the following chapters of this book)—56 percent of the annual budget and growing—we simply accepted reforms based on Paul Ryan’s pathbreaking “Roadmap for America’s Future.” By moving toward a powerful, consumer-driven approach, we estimated that taxpayers could save $370 billion a year by 2020.

“We’ve identified almost $3 trillion in real spending cuts over a decade,” we wrote, “and have only scratched the surface.” What an understatement that turned out to be. It wasn’t long before our $3 trillion in “bold” cuts was looking downright timid, next to the budget plans emanating from the eager entrepreneurs on the Hill, such as Senator Rand Paul.
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Never having been outflanked by a sitting U.S. senator when it comes to questions of fiscal responsibility, I was slightly stunned. But I was more proud than stunned. Once again, the men and women of grassroots America, along with their new proxy representation seated at the table, had beaten expectations and Washington, D.C.

First out of the chute was the Paul Ryan budget plan, which would balance the budget over thirty years mostly by capping annually appropriated spending and reforming Medicare and other entitlements. Meanwhile, freshman Mick Mulvaney—who had just knocked off the longtime Democratic incumbent and revered Budget Committee chairman, John Spratt—was working to compile an even bolder alternative plan for the House conservative caucus, the Republican Study Committee. The RSC Plan would reach balance a full twenty years sooner than Ryan’s, mostly because it cut more deeply and would slowly raise the Social Security retirement age to seventy.

Over in the Senate, Pat Toomey soon put out a plan very similar to Mulvaney’s, while his fellow freshman, Rand Paul, trumped everyone with a plan to balance the budget in just five years. What distinguishes Paul’s approach is that, alone among these plans, it specifies whole cabinet departments for elimination, specifically, HUD, Commerce, Energy, and Education.

All these plans would repeal Obamacare, reform Medicare, block-grant Medicaid, reduce the top tax rate to 25 percent (from the current 35 percent), shrink the government as a share of the economy, and stop the growth of the national debt. In terms of ten-year savings, the plans stacked up roughly as follows: Ryan: $6 trillion; Mulvaney: $9 trillion; Toomey: $7 trillion; and Paul: $10 trillion. Recall where we began this conversation: $3 trillion.

In April, the House passed Paul Ryan’s budget after rejecting several alternatives, including Mulvaney’s (narrowly). And while Harry Reid’s Senate couldn’t pass a budget, Paul Ryan’s at least garnered forty Senate votes. Compare that to the zero that went to President Obama’s. Not one Senate Democrat would vote for the Obama plan, which would have increased ten-year spending by $2.3 trillion and taxes by more than $1 trillion. By May, President Obama was demanding a massive, $2 trillion increase in the debt ceiling, without any real spending reforms.

I know what you are thinking. No one’s plan was passed. So what was accomplished, exactly? Two things. First, we stopped $2.3 trillion in new spending. Second, we created a Republican consensus to fully repeal Obamacare, something that seemed implausible prior to the 2010 elections. Both accomplishments were inconceivable back in 2008 after the passage of TARP, or in the days after the Obama inauguration in 2009.

We were slowly turning the ship of state. But not quickly enough. Like the
Titanic,
we were still headed full steam toward an iceberg that could sink us all.

BUDGETING FROM THE BOTTOM UP

T
HAT’S ABOUT THE TIME WHEN A MEETING OF GRASSROOTS LEADERS
came up with the idea of a Tea Party Debt Commission—a panel of citizens that would go out and listen to the American people and give them a sounding board on the budget and debt crises.
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The commission’s report would put to rest the argument that our movement isn’t serious about specific spending cuts or that we “have no plan.” The only way we will ever reduce the debt and balance the budget, we had concluded, is when America beats Washington and Tea Party activists take over the process. Real reform will only happen from the bottom up.

In late June 2011, at a Washington gathering of about 150 Tea Party leaders, we developed the commission concept. By late August, we had found a dozen volunteers to serve on the commission, at their own expense. We were in business.