Decades from now, historians quite likely will reflect back upon
the Contract With America as one of the most significant
developments in the political history of the United States. As Newt
Gingrich, the first Republican Speaker of the House of
Representatives in 40 years, has written: "there is no comparable
congressional document in our two-hundred-year history."
Never before had so detailed a document become such an integral
part of a congressional election campaign; never had so many
innovative ideas been drafted into legislation so quickly; and
never in the previous six decades had so much legislation been
passed by the House of Representatives in less than 100 days after
the newly elected Members of Congress took office. As the chief
political columnist for The New York Times, R. W. Apple,
wrote in a front page news analysis: "Perhaps not since the start
of the New Deal [in 1932], to which many of the programs now under
attack can trace their origins, has Congress moved with such speed
on so many fronts."
The revolutionary character of the change represented by the
Contract went beyond the U.S. House of Representatives. Not only
did the 367 Republican candidates for the House of Representatives
who signed the document run election campaigns based on its
provisions, but many of the campaigns for the U.S. Senate, as well
as state and local government races, also pivoted around the
fundamental questions concerning the role of government in society
as reflected in the Contract. In short, the Contract may come to
symbolize the most profound change in the American political
landscape in the last half century and, in many respects, determine
the character of American government well into the 21st
century.
The Contract and the Conservatives
There has been a consistent growth of the role of the central
government in the United States, or what you might call statism.
This expansion of the government was never effectively challenged
from the development of Franklin Roosevelt's New Deal beginning in
1933 until the 1960s. Only after the defeat of Richard Nixon in the
presidential campaign of 1960 did conservatives in America begin to
vigorously challenge the growth of the state; at that time,
conservatives won control of the Republican Party. From this
position, the conservatives developed fundamental criticisms of
statist liberal policies which culminated in the nomination of
Barry Goldwater for President in 1964. Although Senator Goldwater
was badly defeated in that election, both the conservative ideals
he championed and the cadre of workers he enlisted became the basis
of the modern conservative political movement in the United
States.
Fortuitously, Senator Goldwater remained active in American
politics through his final re-election to the United States Senate
in 1980, the same year the second great transformation of American
politics took place with the election of Ronald Reagan as
President. It was then that conservatives learned two lessons about
the role of the Presidency. On the one hand, the President can have
a profound international impact through his policies, as reflected
in the winning of the Cold War and, later, the war in the Persian
Gulf. On the other hand, in the most fundamental area of the size
and scope of government activities, the President could lead, but a
Congress controlled by the opposition did not have to follow. Thus,
liberal Congressmen often effectively thwarted President Reagan's
actions. As they often noted, the President is only in office for
four or at most eight years, whereas Congressmen remained in office
often for decades, as did the huge staff support system they
developed. This "permanent staff" eventually reached over 20,000
personnel on Capitol Hill.
Thus, the third leg of the conservative revolution in post-World
War II America is represented by the Contract With America and the
election of a clear conservative majority in the U.S. House of
Representatives. This can become the defining moment in the
transformation of the responsibility for government in the United
States away from the central government and back to state and local
governments or to the private sector, to families and
individuals.
The changes being debated in America now can provide useful
lessons and insights to democratic societies throughout the world
dealing with social and economic problems similar to those
confronting the United States.
In many respects, the changes are already profound. The Contract
With America led to much more than a change of parties in the
United States, leading instead to fundamental philosophical
questions being raised about government in ways not contemplated
for 60 years.
Perhaps the best way to address various aspects of the Contract
With America, the ideas in and behind the Contract and its relation
to the size and scope of government activities, is to answer three
basic questions:
- Why was it done?
- How was it done?
- What has become of the Contract and the ideas it embodied?
Why was it done?
Despite both the ascendancy of conservatives in the Republican
Party and the election of Ronald Reagan as President, it became
obvious that only a substantial change in the U.S. Congress could
lead to the revolutionary transformation of America sought by
conservatives for decades.
Many conservatives who came into Congress in the 1980 election
and thereafter shared a much more dynamic vision of the role of
conservatives in the Congress than did their predecessors. And
among them, Congressman Gingrich consistently articulated his
principal goal as the creation of a Republican majority in the
House and the adoption of a very wide-ranging reform agenda.
In order to draw the attention of the public to the House of
Representatives in the 1994 election, the Contract With America was
created. The Contract provided the mechanism to move from vague
political rhetoric to creating a specific political program.
Through such a program, one could clearly delineate to the general
public the contrasting philosophies of government the 1994 election
offered the electorate.
The Contract's lineage can be traced back to the 1980 election
campaign when most of the Republican candidates for federal office
similarly stood on the steps of the Capitol in early October of
that year and promised to support tax cuts, a strong national
defense, and reductions in federal spending. While the Republicans
gained 33 seats in the House that year, the Democrats nonetheless
maintained their majority, and only the first two of three agenda
items were initially adopted; but several years later, even the tax
cuts and defense spending increases were abandoned. Federal
spending continued out of control throughout the 1980s.
The ideas in the Contract emerged from extensive interaction
between the new, more aggressive conservative Congressmen and the
emergence of an extensive network of conservative think tanks, such
as The Heritage Foundation. In 1980, Heritage and other
conservative think tanks initially focused attention on changing
the government through a change in the executive branch, as
reflected in our monumental study Mandate for
Leadership.
But after 1980, the attention of conservatives increasingly
focused on the Congress. Heritage, for example, published a study
in cooperation with the Claremont Institute in California on The
Imperial Congress: Crisis in the Separation of Powers, which was
published in 1988. Five years later, a successor study from
Heritage came out entitled The Ruling Class: Inside the Imperial
Congress; 2.3 million copies of the later volume reached a wide
audience. Both volumes drew attention to institutional problems
within the Congress that were eventually addressed in the Contract
With America.
And finally, Heritage developed a useful handbook, Issues '94,
that provided specific legislative and policy recommendations for
conservative candidates for Congress; many of these recommendations
worked their way into detailed provisions of the Contract With
America. In this manner, an extensive philosophical groundwork
formed the intellectual foundation for the Contract With America
when it formally appeared in the fall of 1994. Sound ideas thus
became anchored into concrete policy recommendations.
How was it done?
The Contract itself emerged publicly with the staging of the
mass signing of the Contract on the steps of the U.S. Capitol by
367 candidates for office on September 27, 1994. On that day, all
of these candidates publicly pledged: "If we break this Contract,
throw us out." The Republicans who were already Members of the
House of Representatives organized themselves into 11 working
groups that eventually drafted ten bills that made up the
Contract.
The items in the Contract were carefully selected in terms of
issues that were of fundamental policy importance but also were
"doable," that could be accomplished rather quickly because of the
broad support they engendered. Extensive public opinion polling
revealed that at least 60 percent of Americans supported all ten of
the specific items in the Contract. By dealing initially with
popular items, such as the Congress being governed by the same
rules as all Americans, and broad philosophical concepts, such as
balancing the federal budget, the Contract engendered popular
momentum that could eventually lead to confronting more contentious
issues, such as environmental regulations and Medicare and Medicaid
reforms.
Politically, the Contract found a particularly receptive
audience in the elections in the fall of 1994 because of a combined
disenchantment with the existing Congress and the widespread view
of a lack of leadership being provided by President Bill Clinton in
the White House. The Clinton campaign in 1992 had generated the
expectation of great changes being made to deal with domestic
problems. Moreover, the fact that Democrats in 1993 controlled both
branches of the Congress together with the White House seemed to
create the means for changes to take place by breaking the
so-called partisan gridlock in Washington. But the failure to make
substantive policy changes in 1993 and 1994 clearly facilitated the
political changes in November 1994. Thus, the concept of the
Contract found a particularly receptive audience.
What has become of the ideas embodied
in the Contract?
One of the revolutionary elements of the Contract is the fact
that it actually was implemented as promised. Profound
disillusionment within the American political system centered on
the perception that politicians make promises only to be elected
and then promptly abandon their pledges once safely ensconced in
office. Thus, the first and most innovative idea reflected in the
Contract required politicians to take their own promises seriously
and actually implement them.
The idea of the first 100 days repeated, in a Republican
Congress, what had been done by the most successful Democratic
President in American history; in 1933, Franklin D. Roosevelt
vigorously launched the New Deal in his first 100 days in office.
The key difference between 1994 and 1932 was that Republicans only
controlled the Congress while a Democrat, President Clinton, still
remained in the White House. This has clearly limited both the
speed and scope of changes.
The ten items in the Contract were all acted upon in the first
100 days of the new Congress, which is what the signatories had
pledged. Nine of the ten items in the Contract passed the House:
Only the constitutional amendment on term limits (which required a
two-thirds vote) was defeated. Out of a total of 302 roll call
votes on issues related to the Contract With America, the
conservatives prevailed on 299 of them. A balanced budget amendment
passed in the House by a 300-123 margin but was subsequently
defeated as it fell one vote short of the two-thirds needed for
passage in the U.S. Senate. The overall margin by which the items
in the Contract were passed averaged about 70 percent despite the
fact that the Republicans only held a 12-seat margin over the
Democrats (52-48 percent, the smallest House majority margin in 40
years). Given the notorious lack of party discipline in the
American Congress, the passage by a large majority of nearly all of
the items in the Contract was a remarkable achievement.
The ten specific bills which made up the Contract contained
numerous provisions addressing a wide range of issues. Other
elements of the Contract dealt with fundamental institutional
political reforms. Outlined here are a few of these ideas and their
status today.
Institutional Reform: Making Congress
More Democratic
Most dramatically, the new Congress immediately implemented
long-sought reforms within the House of Representatives. In this
one area where the new Republican majority had full authority, they
effectively exercised it by dramatically changing the nature of the
House of Representatives itself during their first day in office;
they passed nine major reforms.
First, they made all the laws that applied to the rest of the
country apply to Congress itself; this indicated that Congressmen
should be treated like other citizens and not remain a privileged
elite, often immune from the consequences of the very laws they
imposed on the rest of the country.
The House drastically cut by one-third the number of committees
and similarly reduced committee staff personnel by one-third. In
short, the lesson was that cutting back the size of government
should begin in one's own House and thus establish a useful
precedent for the rest of the federal government.
The House also provided for an independent audit of the finances
of the House itself. This eventually led to a report by Price
Waterhouse that found 2,200 instances of double payments for travel
expenses, 700 retroactive pay hikes despite a rule against this,
and, in general, accounting practices so out-of-date that the
auditors could not be sure of the actual numbers they were working
with.
Fundamental institutional change also arose in the Citizen
Legislature Act provision of the Contract With America, which
sought to limit the amount of time a Member of Congress could serve
in one body to 12 years. This measure thus sought to limit the role
of career politicians in Washington. But the measure required
amending the Constitution and failed to achieve the two-thirds
constitutional margin necessary. Term limits nonetheless remains a
very popular issue, passed by many state legislatures; and
Republicans promise that it will be the first item voted on if they
retain control of the House after the 1996 elections.
Controlling the Growth of Government:
The Fiscal Responsibility Act
A key ingredient, both explicit and implicit, in the Contract is
a fundamental change in the character of government in the United
States. The very first item in the Contract With America sought "to
restore fiscal responsibility to an out-of-control Congress,
requiring them to live under the same budget constraints as
families and businesses." The key components of this act were a
line-item veto and balanced budget/tax limitation amendment. The
line-item veto would allow the President to strike specific
spending provisions in bills without having to veto the entire
bill, and thus eliminate unnecessary spending. This provision
passed both the House and Senate in slightly different forms, and
President Clinton promises to sign it into law. On the other hand,
the balanced budget amendment, which required a two-thirds vote to
change the Constitution, was defeated. Even though not succeeding
in passing the amendment itself, the House did pass a balanced
budget resolution, which in the short term would have the same
effect. Thus, the concept of balancing the budget has remained a
central theme in the U.S. Congress; the means of achieving this
could only come from a drastic reduction in the size and scope of
the federal government.
The effort to eliminate unnecessary federal government programs
has proven to be one of the biggest challenges facing the new
Congress. Initial enthusiasm about eliminating unjustifiable
federal programs, such as subsidies to the arts and humanities as
well as public television and radio, generated fierce and
well-organized opposition by the special-interest groups who
benefit from the programs. Thus, instead of immediately eliminating
them, the Congress only voted to phase them out over several years.
What this means in Washington is that the battle is renewed each
year.
The key lesson for anyone wanting to scale back the size of
government is that it is best to eliminate a program immediately,
as that engenders just as much opposition as reducing funding for a
program. Only when a program is totally eliminated is the battle
over that program won; in contrast, incremental reduction simply
means revisiting the issue every year.
The example of the Reagan Presidency is instructive. Only 12 of
94 programs the Reagan Administration proposed to eliminate
actually ended, and 10 of those were in Mr. Reagan's first term.
Attempting to simply cut back programs ultimately failed. For
example, the Small Business Administration (what we now call a
welfare program for very few businesses) was cut back from $2
billion in 1980 to $85 million in 1989, but by the end of the Bush
Administration in 1993, the program rose back to $975 million, and
it is now once again a target of the new Congress.
Efforts to eliminate entire Cabinet-level departments of the
government also have proved difficult. Conservatives have long
sought to pursue a policy of "rollback" in dealing with
proliferating government departments. The prime candidates on the
list of government departments conservatives seek to eliminate are
the Departments of Commerce, Education, Energy, and Housing and
Urban Development. But at present, only the Commerce Department
seems vulnerable. Another congressional initiative that has sought
to consolidate the United States Information Agency, the Arms
Control and Disarmament Agency, and the Agency for International
Development into the State Department prospectively would save $3
billion over the next four years. The combination of disenchantment
with the size of the central government and growing budgetary
constraints in Congress has created real momentum to seriously
reduce the size and scope of central government activities in
America.
Welfare Reform: The Personal
Responsibility Act
One of the key ingredients in the initial Contract With America
has led to one of the most contentious debates in Washington:
reforming the welfare state. The Personal Responsibility Act in the
Contract included prohibiting welfare going to mothers under the
age of 18, halting the increase of benefits for mothers each time
they had additional illegitimate children, and cutting welfare
spending. In 1965, President Lyndon Johnson declared a so-called
War on Poverty; but 30 years later, after spending an estimated
$5.4 trillion on welfare programs, it seems that poverty is winning
the war. Thirty years of central government welfare programs seem
only to have worsened the situation. The key problem, as my
colleague at The Heritage Foundation, Robert Rector, has pointed
out, is that "the welfare programs present a 'moral hazard' -- a
strong tendency to increase the behaviors which are rewarded by
welfare benefits." Specifically, "when welfare benefits are tied,
directly or indirectly, to such behaviors as low work effort,
divorce, and illegitimacy, welfare strongly promotes an increase in
those behaviors." This only creates an ever-escalating cycle of
more spending.
The Personal Responsibility Act of the Contract sought to
fundamentally revamp the role of the state in welfare policy by
developing policies to reduce teenage pregnancies and illegitimate
births by prohibiting aid to mothers under 18 who give birth out of
wedlock and requiring them to name the fathers of their children,
who would be held accountable for their actions. Such women would
be required to live at home to receive any aid and would not get
housing subsidies to set up their own apartments. The Act also
required that aid be cut off if recipients did not work.
The federal government provides 72 percent ($234.3 billion) of
all welfare benefits, compared to 28 percent ($90 billion) by the
states. This has led the Congress to set certain general standards
and criteria that recipients of aid must meet to receive benefits.
But beyond some general restrictions, the key reform of welfare
consists of attempting to decentralize the program to the 50 states
and thereby stimulate numerous creative approaches to dealing with
social problems.
This reflected the general conservative philosophical view in
the Contract. As Speaker Gingrich writes in his book To Renew
America: "We must replace our centralized, micro-managed,
Washington-based bureaucracy with a dramatically decentralized
system more appropriate to a continent-wide country... 'Closer is
better' would be the rule of thumb for our decision making; less
power in Washington and more back home, our consistent theme."
Unleashing the American Economy: The
Job Creation and Wage Enhancement Act
This Act attempted to reverse the increasingly debilitating role
of the federal government in the American economy. One of its major
provisions that has passed both the House and Senate ended
so-called unfunded mandates which require states and local
communities to impose various regulations but do not provide them
the money to carry them out. In this manner, Congress passed
allegedly beneficial laws that were cost-free, at least to the
federal government. But such laws had enormous destructive power on
states, local communities, and businesses. It was estimated by the
Congressional Budget Office that such regulations cost state and
local government from $8.9 billion to $12.7 billion between 1983
and 1990 and that the costs were growing. Similarly, the federal
government often imposed costly regulations on businesses that
stifled economic expansion by companies.
The Job Creation and Wage Enhancement Act included a variety of
tax law changes and reforms in federal bureaucratic procedures that
would enhance private property rights and economic liberty.
Specifically, it provided for a 50 percent capital gains rate cut,
allowed small businesses to deduct the first $25,000 worth of
investment each year, reduced paperwork burdens on business by at
least five percent, and required federal agencies to assess the
risks and cost of each new regulation being imposed. Finally, the
Contract provided for a Citizens Bill of Rights for anyone subject
to investigation or inspection by a federal agency.
Non-statist Approaches to Social
Problems: The Family Reinforcement Act
This Act similarly sought to refocus attention on the family and
away from the government as the source of solutions to social
problems. Thus, the Act reinforced child support orders issued by
courts requiring absent fathers to financially support their
children and provided both a refundable tax credit of up to $5,000
for families adopting a child and another tax credit of $500 for
families caring for a dependent elderly parent or grandparent.
Rather than emphasize institutionally provided state care, this Act
sought to get orphaned children into homes and encourage family
care of relatives. Similarly, another element of the tax provisions
of the Contract provided a $500-per-child tax credit, which would
mean that a family of four earning $28,000 would have their tax
burden cut by one-third.
Other provisions provided incentives for saving money to be used
for college education or buying a home and for ending a tax benefit
for couples who live together but do not get married. For example,
a couple earning $40,000 each will pay only $6,633 each in taxes if
filing returns separately; but on a joint return, their combined
taxes will rise by $1,285 to $14,541, or about a 10 percent tax
penalty for being legally married.
These proposals, as well as others, rested upon a fundamental
philosophical principle, as stated in the book version of the
Contract With America: "The American family is at the very heart of
our society.... After forty years of putting others first [we] will
put families first.... It is through the family that we learn
values like responsibility, morality, commitment and faith."
Other Items in the Contract
The remaining items in the Contract deal less with the role and
nature of the state than with confronting specific legal and
security issues. This includes dealing with the growing threat of
crime in America, reforming the legal system, and improving the
security of the country. They reflect the broad scope of the
Contract but go beyond the scope of this lecture.
Conclusion
The ideas espoused in the Contract With America represented the
culmination of 30 years of creative conservative thinking dealing
with the basic social and economic problems of modern America. The
ideas provided the background for the widest range of legislative
initiatives, certainly since the 1930s, and possibly at any time in
American political history. The fundamental principle involves
re-examining the role of the government in society.
Central government attempts to solve many problems have only
made them worse; thus, the Contract With America represents
specific practical steps that can be taken in a wide range of
government activities to roll them back. Ultimately, the government
should cease many of its activities; but what is necessary now is a
realistic transitional mechanism to achieve that goal. The Contract
With America provides precisely the kind of formula that can
accomplish that objective.