A Cautious Step Toward Republican Reform




WSJ, Editorial

Challenging conservative orthodoxies on tax policy and education, but not going far enough. 

Senate Minority Leader, MITCH MCCONNEL
Senate Minority Leader, MITCH MCCONNEL

As a member of the gang of insurgents who prepared the way for Bill Clinton’s presidency, I know something about reforming a political party on a losing streak. The conservative manifesto “Room to Grow,” released May 22 by the advocacy group YG Network—the YG stands for Young Guns—offers a glimpse of a similar effort among today’s Republicans.

The document’s scope is limited—deliberately, I assume. It has nothing to say about foreign policy or hot-button social issues such as same-sex marriage. The focus is on economic opportunity and mobility for people striving to enter the middle class or struggling to remain there. The frame is narrowed even further. “Room to Grow” is all but silent on the budget, trade and immigration. It touches on tax reform and Social Security only tangentially, and on Medicare only in the context of the Affordable Care Act.

Nor does it always meet its own standard of political realism. Public-policy analyst James Capretta offers the best conservative proposal so far to replace the Affordable Care Act. But while he stresses the law’s unpopularity, he avoids a salient fact: 58% of Americans want their politicians to improve the ACA, while only 35% prefer repeal and replacement, according to an April poll by theKaiser Family Foundation. A stance that rallies the faithful in the midterms may well repel the majority in a national election.

The document’s emphasis on the middle class is a thinly veiled repudiation of the Romney campaign, whose emphasis on “job creators” reduced the 2012 Republican convention to a gathering of the National Federation of Independent Businesses. As Sen. Mitch McConnell noted at a “Room to Grow” public event last week, Republicans must stop imagining that average Americans are anything like John Galt in Ayn Rand’s “Atlas Shrugged.” Few of them are entrepreneurs, let alone heroic individualists. Most of them are holding jobs or looking for them. A political party that doesn’t address their needs isn’t likely to get their votes.

By acknowledging and cataloging the challenges facing the middle class, policy analyst Peter Wehner takes a large step toward reality in the “Room to Grow” introductory chapter. Mr. Wehner underscores the average American’s discontent with the present and anxiety about the future. He traces the pessimism to long-established trends in the U.S. economy, including stagnant wages and economic mobility below the levels of many European countries. Although families are working more hours than ever before, Mr. Wehner notes, median household income is barely higher than it was a quarter of a century ago.

It isn’t just the fault of one administration or party, and the American people know it. “When it comes to Republicans and Democrats,” Mr. Wehner writes, “the public’s attitude is: A pox on both your parties.” Conservatives, he says, need to “set aside their habit of speaking as if the very same solutions we offered a generation ago would work equally well today.” Back to Reagan is not the way forward.

Some of the policy proposals in this volume challenge conservative orthodoxy. Advocating increased support through the tax code for families with children, economist Robert Stein criticizes what he terms the “marginal rate mystique” among those who focus on income-tax reform. On education, political scientist Frederick Hess stresses the limits of school choice as a response to educational concerns and a political strategy. For most middle-class households, he observes, school choice can seem like “a solution in search of a problem.”

According to sociologist Scott Winship, “it is not quite fair to say that we lost the war on poverty.” Poverty, he finds, fell by roughly half—to 16% in 2012 from 30% in 1967—an improvement in which public programs played a significant role. Economist Michael Strain urges conservatives to take seriously adverse trends in long-term unemployment and labor force participation. His recommendations include reforming unemployment insurance to help laid-off workers reach new jobs and expanding the earned-income tax credit as a way of reconnecting childless workers—mostly men—to the world of work. These are ideas that both parties would do well to consider.

James Pethokoukis, who writes on money and politics for the American Enterprise Institute, argues that crony capitalism in the U.S. has suppressed competitive dynamism, slowing growth and job creation. That’s the closest anyone in this volume comes to structural diagnosis, and it is part of the story. But something larger is at work. A century ago, American innovation produced tens of millions of Americans jobs. Today’s innovations produce a small number of high-skill jobs in the headquarters of U.S. firms, millions of assembly jobs overseas and very little in between for the American middle class.

Taken as a whole, “Room to Grow” represents an effort to reform the Republican Party without taking on the issues that present the largest obstacles to a conservative majority. Although it paints an attractive picture, it colors within the lines. If the economic problems of the middle class are structural, someone will have to think harder. And if immigration is to today’s Republicans as welfare was to the Democrats of the early 1990s, someone will have to go further.

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