'Blueprint for Reform’ Gives Desperately Needed Guidance to Washington

COMMENTARY Markets and Finance

'Blueprint for Reform’ Gives Desperately Needed Guidance to Washington

Jul 18th, 2016 4 min read
COMMENTARY BY
Diane Katz

Senior Research Fellow in Regulatory Policy

Diane Katz, who has analyzed and written on public policy issues for more than two decades, is a research fellow in regulatory policy.

The barbaric attack in Nice, the slaughter of police officers in Dallas and Baton Rouge, and Hillary Clinton’s umpteenth legal cakewalk leave many Americans feeling angry and powerless—and understandably so. The social contract seems to have been shredded by the mayhem that envelops us.

But the upcoming election and change of administration offer Americans an opportunity to demand a return to principles that can keep the nation free and strong—if embraced.

These principles—free enterprise, limited government, individual freedom, traditional American values, and a strong national defense—underlie the dozens of policy recommendations detailed in The Heritage Foundation’s new “Blueprint for Reform: A Comprehensive Policy Agenda.” Released last week, the publication is the latest in a series of “Mandate for Leadership” books that debuted in 1981 to guide the incoming Reagan administration.

Washington desperately needs the guidance, of course.

As noted in “Blueprint for Reform,” excessive spending has nearly doubled the federal debt in recent years, from $9.9 trillion at the close of 2008 to $19.2 trillion in May 2016. There also has been an unparalleled expansion of regulation, with some 20,000 rules issued by the Obama administration and an increase in annual regulatory costs of more than $108 billion (according to the regulatory agencies’ own numbers). The loss of individual freedom is incalculable.

Meanwhile, the $1 trillion that Americans spend each year on means-tested welfare programs isn’t buying much self-sufficiency for the needy among us. And U.S. military capabilities have languished.

In its first six chapters, “Blueprint for Reform” summarizes the state of the economy; taxes; entitlements; regulation; energy and natural resources; and foreign policy and defense. The second half features analyses by Heritage experts of the missions, operations, and budgets of 15 Cabinet departments and eight other agencies, along with a detailed policy agenda “to allow Americans to build for themselves a stronger economy, a stronger society, and a stronger defense.”

On taxes, for example, the plan reveals that the federal government expects to collect $42.1 trillion in revenues between 2017 and 2026, and spend $51.4 trillion. Doing so will increase the total gross debt from $19.2 trillion in May 2016 to an estimated $29.1 trillion by September 2026.

As noted by Heritage Foundation experts, a more rational tax system would feature a low, flat rate applied on a base of wages, salaries, and limited number of other forms of income. And the rate would be set to collect no more revenue than is necessary to fund government’s core constitutional functions.

Exercising Power of the Purse

“Blueprint for Reform” also prescribes a variety of regulatory reforms to curtail the vast administrative state that has eroded the fundamental character of America. Chief among them is returning accountability to Congress by requiring lawmakers to approve all major regulations before they are allowed to take effect.

The plan calls on Congress to exercise the power of the purse by withholding appropriations from ruinous regulations such as the Obama administration’s so-called Clean Power Plan, among others.

Indeed, President Barack Obama’s crackdown on coal and petroleum has been particularly punishing by prohibiting access to natural resource exploration, subsidizing politically preferred energy sources, and implementing burdensome regulations that distort markets and provide little environmental benefit.

“Blueprint for Reform” recommends greater access to resource development and trade in energy resources, the elimination of subsidies, favoritism, and shifting more regulatory authority to the states. As noted by Heritage analysts:

Freely importing and exporting energy and energy technologies would yield tremendous economic benefits, providing Americans with more opportunities to sell products to more customers and to buy cheaper goods and services from abroad. Free trade in energy also bolsters national security by increasing supply diversity and providing choices for allies; it will have beneficial geopolitical implications for every region of the world.

Reducing Regulations and Entitlements

The hundreds of regulations imposed on the financial sector under the Dodd-Frank Act likewise have increased costs, reduced access to credit, and inhibited economic growth. Advocates evidently fail to grasp that banks and other financial institutions actually promote prosperity by allocating capital.

But as Heritage experts point out, Dodd-Frank actually has eroded financial stability by inciting industry concentration, which harms investors and consumers. To reverse this trend, “Blueprint for Reform” recommends repeal of Dodd-Frank and a return to regulation focused on deterring and punishing fraud and fostering reasonable, scaled disclosure of material information.

Major reforms also are necessary to rationalize America’s entitlement programs, including Social Security, Medicare, Medicaid, and Obamacare, which accounted for more than half of all tax revenues in 2015.

“Blueprint for Reform” eliminates any excuse for hand-wringing among members of Congress by providing specific reforms, such as:

  • Raising the Social Security and Medicare retirement ages to account for increased life expectancies and work capacities.
  • Transitioning to a flat, anti-poverty benefit for Social Security and Disability Insurance.
  • Reducing the payroll tax to allow individuals to save more for retirement and disability.

Defending the Nation

And then there is defense. It is all too apparent that America is unprepared and ill-equipped to confront Russian adventurism in Eastern Europe, Chinese expansion in the South China Sea, and Islamist terrorists streaming across swaths of Asia, the Middle East, and North Africa.

“Blueprint for Reform” recommends reprioritizing defense spending while maintaining the aggregate spending levels for discretionary programs under the Budget Control Act. Resources should be shifted to restoring capacity, particularly of U.S. ground forces; accelerating readiness; and updating nuclear weapons and missile defense systems, among other changes.

Improving the efficiency of the Defense Department also should be a priority, according to Heritage experts, including cutting excessive bureaucracy and modernizing acquisition system.

A great many other policy corrections fill the 152-page “Blueprint for Reform” that should be required reading for every policymaker and elected official—in Washington and beyond. It also offers citizens an inside look at the inner workings of the executive branch and experts’ guidance on making America once again the land of the free and the home of the brave.

This piece originally appeared in The Daily Signal