Mitch Daniels' Plan for Smaller, Smarter Government in the Hoosier State

Cathy McMorris Rodgers The GOP Conference Vice Chair talks about politics, policy & her party

Spring 2009 Volume 43, No. 2

Th e Re f o r m e r Mitch Daniels’ plan for smaller, smarter government in the Hoosier state

Plus: Why the Pentagon’s first priority should be to cut bad habits, not bad programs

And: The promise of bipartisanship and the perils of reconciliation www.riponsociety.org $4.95 U.S./$5.95 Canada Setting Innovation in Motion We’re driven to improve people’s lives. Takeda strives toward better health for individuals and progress in medicine by developing superior pharmaceutical products. At Takeda, we make a commitment to make a difference.

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Volume 43, No. 2, Spring 2009

Interview Articles (cont’d.)

4 Q&A 17 An Appointment Made by the Public, with Cathy McMorris Rodgers Not in the Backroom Meredith Freed sits down with the Vice By David Dreier Chair of the House Republican Conference Americans want their voice to be heard in to discuss politics, policy and the future of Congress. Yet four states haven’t elected the GOP. their newest Senators.

Cover Story 19 Fr o m t h e Bu l l y Pu l p i t : Meeting America’s Challenges on Health Care 7 The Reformer By Wally Herger By John L. Krauss One of Congress’ leading experts on health At a time when some Republicans are being care lays out principles for reform in an accused of wanting to dismantle government, April 2nd speech before the Ripon Society. Indiana Governor Mitch Daniels gets behind an ambitious plan to make government in the 21 A Holiday to Invest Hoosier State smaller and smarter. By John Campbell The government is spending billions to jump Articles start the economy. Here is a no cost proposal that could do the same thing. 11 Ma k i n g Go v e r n m e n t Wo r k : Only Five?? Politics & Perspective By Winslow Wheeler To end the widespread decay within the 23 Congress by the Numbers Pentagon, what must first be eliminated By Robert S. Walker are not bad programs, but bad habits. 25 A Scalpel for President Obama 13 Fiscal Disorder By Lou Zickar By Jim Bates With the budget process in Washington 27 Lowi’s Intent and the Origin of Sunset broken, a national conversation on By Theodore Lowi reforming it is long overdue. Sections 15 The Promise of Bipartisanship and the Perils of Reconciliation 3 In this Edition By Steve Bell As President Obama pledges to work with 28 Ripon Profile Republicans, Democrats on the Hill consider Lisa Murkowski a tactic that could sharpen the partisan tone.

Publisher Editor The Ripon Society Louis M. Zickar One Year Subscription: Comments, opinion editorials and letters should be addressed to: The Ripon Forum, $35.00 individuals President Deputy Editor 1300 L Street, NW, Suite 900, Washington, $10.00 students DC 20005 or may be transmitted Richard S. Kessler Meredith Freed electronically to: [email protected]. The Ripon Forum (ISSN 0035-5526) is Chief Administrative Officer Editorial Assistants published bi-monthly by The Ripon Society. The Ripon Society is located at 1300 L Street, George McNeill Alli Brennan In publishing this magazine, the Ripon Society NW, Suite 900, Washington, DC 20005. Eleanor Thompson seeks to provide a forum for fresh ideas, Editorial Board Postmaster, send address changes to: well-researched proposals, and for a spirit William Frenzel © Copyright 2009 The Ripon Forum, 1300 L Street, NW, Suite of criticism, innovation, and independent William Meub By The Ripon Society 900, Washington, DC 20005. thinking within the Republican Party. Billy Pitts All Rights Reserved

RIPON FORUM Spring 2009 47 Years of Public Policy

Founded 1962

1300 L Street, NW, Suite 900 Washington, DC 20005 (202) 216-1008 www.riponsociety.org THE RIPON SOCIETY HONORARY CONGRESSIONAL In this Edition ADVISORY BOARD Over the past 30 years, conservatives have successfully branded anyone who supports raising taxes as being a liberal. Se n a t e Now, many on the right are trying to do the same with regard to Senator Richard Burr (NC) government. In short, if a person supports a government program, that Senator Susan M. Collins (ME) person is not just a liberal, but a socialist. The result is that many Republicans have become hesitant to Senator Judd Gregg (NH) acknowledge one of the most basic obligations of elective office – mainly, Senator Orrin G. Hatch (UT) that they are hired to run the government, not run away from it. It hasn’t Senator Pat Roberts (KS) always been this way, of course. Senator Olympia J. Snowe (ME) Lincoln created the Agriculture Department. Teddy Roosevelt regulated the railroads. Eisenhower poured 45,000 miles of concrete and Senator Arlen Specter (PA) built the nation’s interstate highway system. No one in his right mind Ho u s e would believe any of them were socialists. Then again, I don’t listen to Representative Rush Limbaugh, so I don’t know what he thinks.

Thomas E. Petri (WI) Ch a i r m a n What I do know is that the Republican Party has got to come to grips with the role of government, and figure out an approach that Representative Judy Biggert (IL) recognizes the role it plays in people’s lives. A good place to start is by Representative Roy Blunt (MO) looking toward Indiana, where Governor Mitch Daniels has undertaken Representative Ken Calvert (CA) an ambitious plan to remake the structure of local governments in the Representative Dave Camp (MI) Hoosier State. As John Krauss of Indiana University explains in our lead essay, in Representative Eric I. Cantor (VA) pushing to make government smaller and smarter, Daniels is not driven Representative Michael Castle (DE) by some Al Gore utopian fantasy that an efficient bureaucracy can cure Representative Howard Coble (NC) all the world’s ills. Rather, he is driven by the very Republican notion Representative Ander Crenshaw (FL) that a more efficient government can save taxpayers money – in this case, savings in the form of lower property taxes. Representative Vernon Ehlers (MI) And so, Daniels pushes on with his plan. It is an uphill fight, as you Representative Jo Ann H. Emerson (MO) will read. But it is also one any Republican can -- and should -- support. Representative Rodney Frelinghuysen (NJ) No look at government efficiency would be complete without an Representative Kay Granger (TX) examination of the fuel that keeps the wheels of government turning – the budget. And for this, we feature essays by two of the best: Jim Bates, Representative Steven LaTourette (OH) writing on the urgency of budget reform, and Steve Bell, writing about the Representative Jerry Lewis (CA) perils of reconciliation in this supposedly “post-partisan” year. Representative Adam Putnam (FL) As part of a new feature on “Making Government Work,” we’ve Representative Fred Upton (MI) asked defense expert Winslow Wheeler to take a look at the Pentagon and, in 800 words or less, tell us how to make the Department function Representative Edward Whitfield (KY) better. He not only accomplished this feat, but he did so with one word to spare – a model of efficiency, himself. We kick things off, though, with a Q&A with the top ranking Republican woman in the House of Representatives, Cathy McMorris Rodgers, who shares her thoughts on the future of the GOP and the year ahead on Capitol Hill. We hope you enjoy this edition, and encourage you to write us at

The Ripon Society is a research [email protected] with any ideas or suggestions you may have. and policy organization located in Washington, D.C. There are Lou Zickar National Associate members throughout the United States. Editor Th e Ri p o n Fo r u m

RIPON FORUM Spring 2009 3 Interview

Q&Awith Cathy McMorris Rodgers

athy McMorris Rodgers represents Wash- need to hold them accountable for promises they’ve ington State’s 5th Congressional Disrtrict in made and, when all else fails, make sure that people Cthe U.S. House of Representatives. She current- understand an alternative approach is being introduced ly serves as Vice Chair of the House Republican in Congress. Conference, assisting in the development of the House Republicans’ communication strategy. She RF: What do you see as the top priorities for also serves on the House Armed Services Com- this session? How can the Party garner support mittee, the Education and Labor Committee, and for Republican initiatives with Congress and the the Natural Resources Presidency controlled by Committee. In addi- Democrats? tion, McMorris Rodgers CMR: The top founded the Congres- priority is the economy sional Hydropower and taking steps to get Caucus. She recently our economy moving. sat down with Forum Between the continued Deputy Editor Meredith downturn in the economy Freed to discuss the role and the layoffs we’re of the GOP in the cur- seeing, people are having rent Congress and her a tough time finding a vision for the Party’s job or are uncertain about future. whether or not they’re going to have a job. Small RF: What is the businesses are struggling role of the Republican too -- whether it’s just Party in this Congress? keeping their doors open How does the Party or offering health care balance the role of to their employees. And “loyal opposition” with I don’t think any one party now, they’re facing such the responsibilities of has all the best ideas, and we huge tax increases. shoring up the economy I don’t think any one and protecting national need to impress upon the party has all the best ideas, security? Democrats that it is in and we need to impress CMR: The role of America’s best interest upon the Democrats that the Republican Party is to it is in America’s best be presenting our ideas, that we work together. interest that we work our solutions to the issues together. America is of the day -- whether demanding that of us it is growing our economy, addressing health care, right now. Americans understand that when you’re in or meeting our energy needs. There are going to be a crisis in your local communities, you come together times when we will find common ground with the not as Republicans or Democrats, but as a community. Administration and with Democrats in Congress, and Americans expect that of us in Congress, too -- to we need to look for those opportunities. But we also really show leadership, to put forward the best ideas,

4 RIPON FORUM Spring 2009 and do it in such a way that the result is a solution in substantial majorities, the Congress of the United the best interest of the country not a party. States will be more bipartisan.” What does the term RF: In the past, one of your priorities has been “bipartisanship” mean in the context of this session energy policy, particularly hydropower. Where does and where are we likely to see it? this issue fit into the GOP agenda for this session? CMR: I’ve been encouraged how President Obama CMR: When you think about addressing the has been reaching out to the Republicans. From the economy and getting our economy moving, energy very beginning, he said he wants to work with the policy is a huge piece of the solution. Energy is so Republicans. He met with the House Republican important to our economic security. It’s also important leadership several times prior to the passage of the to our national security. We can find some common stimulus bill. He also addressed the House Republican ground with the Democrats on the goal of reducing Conference for well over an hour and answered lots of our dependence on foreign oil, and we need to do questions. And we need to do more of that. that. The Republicans can U n f o r t u n a t e l y , find common ground in we haven’t seen the supporting renewables, and Democrats in Congress hydropower is a renewable as open to reaching out source of energy. to the Republicans and For the Pacific working in a bipartisan Northwest, we get the fashion. I’m hopeful they majority of our electricity will start recognizing it from hydropower. In is an expectation of the Washington State, it is American people that almost two-thirds of we work in a bipartisan our electricity, making fashion. It means going Washington State one of back to some of the the cleanest states in the campaign promises that country. We have some of both President Obama the lowest levels of carbon and Speaker Pelosi made emissions in the country. -- that we were going to We do have a renewable follow regular order, that portfolio standard, but we were going to respect we also have hydropower. the role of the minority, The combination makes that we were going to us about 80 percent give them opportunities renewable. It’s going to The challenge before to introduce amendments, be important as we move introduce alternatives. I forward that hydro is seen Republicans is to update think it’s important to as a renewable source of our message. Bring it into the good lawmaking and better electricity and Washington 21st century. Talk to people in outcomes to do so. State is not penalized for In the ‘90s, President already being clean. It’s a way that they can understand Clinton and the Republican estimated that we could how you can apply Republican Congress had to work double the amount of together and there were hydroelectricity in the principles, Republican values successes because of it. In country without building to the issues of the day. the ‘80’s, too, President another dam, just with Reagan worked with the infrastructure that a Democrat Congress. currently exists. In addition, there’s new technology Again, it was Republicans and Democrats working able to harness river currents and ocean waves to together to address the issues of the day. And we need produce renewable hydropower. Hydropower has an to continue to work in that spirit. important role in meeting increased renewables goals, as well as helping meet our overall energy needs. RF: What do you hope to accomplish as Chair of the Republican Select Committee on Earmark RF: Prior to the November election, Speaker Reform? What are the potential implications of Pelosi said, “If the Democrats win and have earmark reform with regard to the economy?

RIPON FORUM Spring 2009 5 CMR: The goal of this committee is for the it’s getting their input and engaging people all across Republicans to lead the effort on earmark reform. the country, the best and the brightest, to help us Our goals include significantly reducing the total champion the ideas we believe would be the best for number of earmarks, having earmarks based on merit, the country. 100 percent disclosure of earmarks so that it would be easy for people both internally and externally to RF: You are one of the few women in the get information as to the earmarks that have been Republican leadership on Capitol Hill. What does requested. Transparency is an important piece in the Party need to do to encourage more women and providing accountability in the process, so that every minorities to become involved and join the GOP? step of the way people can get information. There CMR: It’s really an exciting time for women should be an opportunity to bring up an earmark in America. You see where women are starting either in a committee or on the House floor and have more businesses; the fastest growing segment in the members decide whether or not this is a wise use of economy is women-owned businesses. It’s important taxpayer dollars. to recognize women make 80 percent of the health These are some of the themes that we are trying to care decisions in our country and 85 percent of the address in earmark reform. President Obama said that purchasing decisions in our country. Women are he wanted to reduce earmarks to the 1994 levels and decision makers, and what the Republican Party needs require more transparency. That’s part of his change. to do is reach out to women and talk to them in terms gov agenda, and we would like to work with him to of the issues women encounter every day. accomplish that goal. Also, I’d like to focus on the importance of updating RF: During the 1994 some of our laws. For Congressional elections, the People haven’t rejected example, I’ve introduced the focused and well-defined Family-Friendly Workplace message of the Republican Republican values or Act, which is to allow more “Contract with America” principles. Overall, people flexibility in the workplace proved highly successful. still believe in our basic values to take time off. If you put Do you envision a similar in your 40-hour week, rather national approach to the of fiscal responsibility, the rule than only having the option Republican message for of law, a limited role of of being paid time-and-a- 2010? half, you could actually CMR: It is vital for government and personal get time off of work for Republicans to communicate responsibility. overtime. our vision for America. In Some of these kinds the past, we could have of flexibility issues really done a better job. People resonate with women -- haven’t rejected Republican values or principles. especially those that are trying to balance workplace Overall, people still believe in our basic values of as well as family. And it’s not just women. Families fiscal responsibility, the rule of law, a limited role of in general need more flexibility so that they can decide government and personal responsibility. The challenge how best to meet the demands of making a living and before Republicans is to update our message. Bring caring for a family. it into the 21st century. Talk to people in a way that One of the issues Republicans must address with they can understand how you can apply Republican women is health care, recognizing women make 80 principles, Republican values to the issues of the day. percent of the health care decisions in this country. We must spend time as a party thinking about how Women are experiencing the frustrations in our health we do that and how we communicate what our vision care system and women will be key to thinking through is for the country. No matter the issue -- whether it’s how best to ensure people have access to quality economic opportunity, ensuring health care for all, and affordable health care, while still protecting the energy independence -- we need to make sure that important relationship between doctors and their the country understands how Republicans approach patients. these goals. As Vice Chair of the Conference, I am A single payer, government-run system is not the focusing on new media and how to use new media only solution. Other solutions can ensure we have to communicate with people all across the country health care for all and women will play an important directly. role in determining how we improve our health care It’s not just telling them what we’d like to do; system. RF

6 RIPON FORUM Spring 2009 Cover Story

by John L. Krauss

Th e Re f o r m e r Mitch Daniels pushes to make government in the Hoosier State smaller and smarter

On August 18, 1988, on the last night of the Republican To be sure, with the economy struggling, tax receipts National Convention, Vice President George H.W. Bush falling and federal deficits soaring, there’s more pressure stepped to the podium at the Louisiana Superdome and than ever for government cost-cutting. Yet in such an accepted his party’s nomination for President. environment, savvy voters and citizens are asking not only, Penned by speechwriter Peggy Noonan, Bush’s “Will you hold the line on taxes?” but also, “How?” acceptance address is an eloquent accounting of the Reagan The devil is in the details, of course, but I will suggest Administration’s successes, the candidate’s credentials to any candidate or officeholder — Republican, Democrat and his contrasts with his opponent, Massachusetts or Independent — that one loud and clear answer has to Governor Michael Dukakis. be “government reform.” The most memorable line from that speech, “Read In June 2007, Indiana Governor Mitch Daniels called my lips: no new taxes,” helped get Bush elected a few me. He said he wanted to work on the how-will-we-lower- months later. It also established a litmus test for many taxes question by finding innovative ways to reduce local candidates in many elections to come. government costs. But it’s not that simple — especially now. At the time, Daniels was under tremendous pressure

RIPON FORUM Spring 2009 7 to address a property tax crisis that had been brewing for of the public. decades. Daniels had plans for addressing the tax issue, During the Commission’s review process, but he knew he couldn’t cut and/or cap property taxes representatives of various interests—objective and vested — a primary funding source for local government — — stated their cases. Citizens participated in public forums without simultaneously addressing some of the antiquated statewide and sent suggestions via a dedicated Web site. jurisdictions, structures and mandates that render local Individual commissioners dug deep into particular areas government inefficient and ineffective in a modern era. of interest and reported their findings. On the phone that day, Daniels asked if my colleagues In the end, the Commission produced a report called and I would serve as researchers and principal staff for a “Streamlining Local Government: We’ve got to stop bipartisan commission on local government reform. governing like this.” The report can be found at http:// He said he wanted the commission to review the best indianalocalgovreform.iu.edu/. government reform ideas from Indiana and elsewhere — The report contains 27 recommendations designed to ideas that were new and ideas that had been on the table reduce the cost and complexity of local government in for decades. Indiana. The ideas touch townships, towns, cities, counties, He said he wanted all things considered — no sacred school boards, libraries, public safety departments, elected cows. officials, appointed officials and more. He said he wanted the commission to consider ways All the ideas reflect a set of guiding principles agreed not only to reduce local government costs, but also to upon by the commissioners. These principles suggest that make local government local government should: more understandable and ... [Daniels] knew he couldn’t • Be simpler, more transparent. understandable and more And he wanted it fast cut and/or cap property taxes — responsive. — within a matter of months a primary funding source for • Be more transparent, — so the Legislature could allowing citizens to better consider the commission’s local government — without understand whom to hold recommendations during its simultaneously addressing some accountable — whom 2008 session. of the antiquated jurisdictions, to thank or blame — for I asked who he had in decisions, actions and mind to head the commission. structures and mandates that spending. The governor gave me two render local government • Drive real cost savings names. inefficient and ineffective … through the reduction of The first was the sitting local government layers and chief justice of the Indiana in a modern era. the adoption of other cost- Supreme Court, Randall saving measures. Shepard, a Republican. • Be flexible enough to accommodate different kinds The second told me Daniels was dead serious about and sizes of communities and an evolving definition of bipartisan reform: He wanted his predecessor — the sitting community. governor he defeated in the 2004 election — Democrat • Focus on long-term solutions that not only consider Joe Kernan. immediate needs, but also provide for future efficiency Recognizing how savvy and gutsy that call was, I and growth. said yes. • Create a more equitable distribution of services and responsibility for funding them. A Blueprint for Reform • Reduce the number of local officials and local units The Kernan-Shepard Commission added five other of government. members — a former Republican secretary of state, a • Allow only elected (not appointed) officials to former Democratic state senator, the former president of approve taxes and debt. Indiana University, a retired corporate executive and a • Limit appointed officials to administrative former county government official. responsibilities, and ensure professional qualifications For six months, Commission members reviewed and performance standards where appropriate. and debated years worth of existing research — data, This wasn’t rocket science. Some of the ideas had academic studies, white papers, think-tank reports, past been around for decades. Indeed, the most comprehensive study committee recommendations, best practices from reform recommendations were produced in 1935 for other states and thousands of ideas submitted by members Democratic Gov. Paul V. McNutt. But here in the Hoosier

8 RIPON FORUM Spring 2009 State, structural local government reform has never been crisis to go to waste.” enacted. I’ve also learned some key reasons why government The “never enacted” part concerned Commission reforms are about as popular as root canals: members most of all. As Kernan and Shepard wrote in • Fear of confrontation. Most people prefer to their introduction to the Commission’s report, “The avoid confrontation. Elected officials are no exception. transformation we propose will be disruptive, even painful, So for your average state senator or representative, it’s in the short run. Many who have vested interests in the understandably anxiety-inducing to head home from the status quo will resist these changes with great vigor.” Capitol to tell Frank the sheriff, Mabel the auditor, Bob A wiser prediction has rarely been writ. Suffice it to the commissioner, Suzie the trustee or Sam the school say that the welcome board member that for Kernan-Shepard’s you’re eliminating proposed reforms has their elected position been cool, at best. in the interest of a To be sure, newfangled model. Governor Daniels • Fear of upending embraced all the political farm but a few of the system. r e c o m m e n d a t i o n s Tr a d i t i o n a l l y, with open arms. lower-level elective Business and opinion offices have fed leaders (including both parties. The many newspaper county council editorial boards) member becomes endorsed the proposals a state senator. The enthusiastically. And state representative a grassroots advocacy Governor Daniels joined members of the Kernan-Shepard Commission becomes governor. group emerged to in December 2007 for the presentation of the Commission’s The council member champion the cause. recommendations to reform local government. becomes mayor. What’s But the vested- more, precincts, wards interest lobby turned Boundaries drawn in the and townships are out in full regalia in horse-and-buggy era make no traditional breeding opposition. So while grounds for voter a few proposals sense in the Age of Cyberspace. turnout. So the parties have been enacted, Procedures developed before the are understandably most have died an advent of rubber stamps are reluctant to tinker. ignoble death in two They think this would consecutive legislative nonsensical in an era of e-filing. be akin to Major sessions. League Baseball abandoning single-A ball clubs. The Rewards of Leaner Government • Fear of losing local control and accountability. As a public policy analyst, I’ve studied which Even if folks don’t understand what the auditor, assessor, recommendations have survived, which have struggled, coroner or commissioner do exactly; and even if they and why. In the process, I’ve gleaned lessons and identified can’t name the individuals elected to these offices; they’re opportunities for public officials in Indiana and beyond. reluctant to cede the ability to “throw the bum out” to an First, I’ve learned that the easiest way to push reform elected mayor or county executive further up the political is to act in response to crisis — real or perceived. ladder. As the Kernan-Shepard Commission convened, • Fear of increased accountability. Increased Indiana found itself in property tax chaos. This triggered transparency and accountability can cut both ways. Some screaming headlines and mass protests. It’s no surprise, elected executives grow frustrated when they’re blamed therefore, that the most significant Kernan-Shepard for tax increases over which they have no authority— reform to date involves assessors. increases imposed by appointed boards and commissions, Advice to would-be reformers: Follow White House for example. On the other hand, there are executives who Chief of Staff Rahm Emanuel’s Rule One: “Never allow a like being able to shift responsibility to other bodies. That

RIPON FORUM Spring 2009 9 way, they can say, “I didn’t do it. The board did it.” Under more-effective government? Kernan-Shepard, there’d be no hiding, because only Wouldn’t our political parties be stronger if they elected officials could increase a tax. showed they could do more for less? So given these inherent reasons to resist, why do I Wouldn’t the idealistic young people in my see political and public-policy opportunity in government university’s classrooms rather work in governments that reform? were more modern, professional and respected? The no-new-taxes mantra is as relevant today as when If we continue to avoid confrontation and retain the George H.W. Bush uttered it. But even the best leaders status quo of outdated, outmoded local government, it can’t perpetually do more with less will be impossible for candidates if they’re bound by silos and boxes to say “read my lips: no new invented decades or centuries ago. taxes” with any credibility. For Boundaries drawn in the horse- once elected, they’ll increasingly and-buggy era make no sense in struggle to finance and deliver the Age of Cyberspace. Procedures 21st-century services while developed before the advent of bound by an 18th-, 19th-, or 20th rubber stamps are nonsensical in -century structural straitjacket. an era of e-filing. Elective offices The status quo is a recipe established at a time when everyone for broken promises, perpetual knew everyone else in a small town public-policy failure and make no sense in a century when proverbial political disrespect. most folks can’t name their senator, Neither the citizens nor the parties congressman or governor. win. Government reform requires Yet that’s what we impose courage and confrontation. But on our local governments and the for leaders willing to act, the elected officials chosen to run rewards will be rich and well- them. deserved. Wouldn’t it be better to Just ask Mitch Daniels. give fewer, more-visible elected His favorability rating now officials the power to hire and fire stands at 68 percent. This is 10 the professionals they need? points higher than it was last Wouldn’t it be better to provide September. So while the vested those professionals with adequate John Krauss interests may not like the reforms resources, systems and structures he is pursuing, those proposals to do more efficient, cost- have certainly not done him any effective, visible, understandable If we continue to damage with his most important and accountable work? avoid confrontation and constituency -- the people of the Wouldn’t it be better to Hoosier State. RF actually know what the leaders retain the status quo of were doing and know whom to outdated, outmoded local remove from office if it wasn’t government, it will be A former Indianapolis deputy done well? mayor, John L. Krauss directs the Wouldn’t the citizens and impossible for candidates Indiana University Public Policy voters be happier if fewer of their to say “read my lips: no Institute and its Center for Urban tax dollars were spent with a higher new taxes” with Policy and the Environment. The level of accountability? Institute is part of IU’s School Wouldn’t they be better any credibility. of Public and Environmental informed if they had fewer layers Affairs, where Krauss is a to watch and comprehend? clinical professor. He’s also an Wouldn’t they be more likely adjunct professor of law at the to vote for elected officials and Indiana University School of the protégées who emerged from a Law-Indianapolis.

10 RIPON FORUM Spring 2009 Articles

Ma k i n g Go v e r n m e n t Wo r k In this edition of THE RIPON FORUM, we begin a regular series that looks at the 15 departments that comprise the Executive Branch and recommends ways to make the departments smaller and smarter. Specifically, we are asking experts to recommend five programs within each Department that should be eliminated, and one program that merits recognition because it works. In this first installment, a look at the Pentagon.

Only Five?? Winslow T. Wheeler

When Th e Ri p o n Fo r u m contacted me to write an unaffordable cost. The “next generation” combat aircraft, essay that identified five Defense Department programs to the F-22 and the F-35, are classic examples. In terms of eliminate, I suppressed my immediate reaction: aerodynamic performance, both are huge disappointments, Only five?? and in some respects even a step backwards. Sadly, America’s defenses are festooned with programs For their reputation as “wonder weapons,” they rely that should be eliminated; however, killing them all off – on a hypothetical construct of air-to-air warfare (“beyond many more than just five – will do very little to solve our visual range” engagement with radar directed missiles) that problems. To fix the problem, we must first understand its has failed time and time again in real war. Even the so- basic nature. called “affordable” F-35 is, in truth, The U.S. today spends more in completely unaffordable. Now at inflation adjusted dollars than it has $121 million per copy, it is only since the end of World War II. For beginning its flight testing – the all this money, we get the smallest stage where cost growth really starts combat forces we have had at any to show up. time since 1946. The Army has fewer At $355 million per copy, the combat formations than at any time F-22 bypassed affordability about in this period. The Navy has fewer $300 million ago. Two peas in combatants, and the Air Force has a the same pod, both aircraft are an smaller number of fighter and attack embarrassment. The thinking behind aircraft. Our major weapons are – them, which ignores the lessons of on average – older than at any time combat history and the dictates of since 1946, and we routinely send common sense, needs to be rooted units into combat with less training out. than we have in the past. To end the widespread 2. Unaccountable finances. With all this considered, it is For decades, the Pentagon has not enough to simply unload a few decay within the Defense not just failed audits; it has been ultra high cost, underperforming Department, what must unaccountable. Most DOD mountains of unreliable complexity first be eliminated are not components literally cannot trace that the Pentagon, Congress, and the billions appropriated to them. defense manufacturers today palm bad programs, but In response, the Department and off as weapon programs. To end bad habits. Congress exempted DOD from the widespread decay within the the statutes, including the Chief Defense Department, what must first be eliminated are not Financial Officers Act of 1990, that seek to force compliance bad programs, but bad habits. In keeping with the original with the norms of financial accountability in the private editorial request, here are five: sector and even the rest of government. Those exemptions 1. Underperforming, “white tower” weapons at must be repealed.

RIPON FORUM Spring 2009 11 3. Whistleblower intimidation. One of the effects of of continued riches only defers the hard decisions we need the new National Security Personnel System established to reform. under former Defense Secretary Donald Rumsfeld has been Budget reductions on the order of 10 percent per year to make it easier for Pentagon managers to fire employees. for several years into the future can make us stronger, not While there is surely bureaucratic deadwood to unload, this weaker, but we need to observe the principles addressed new system also facilitates the firing of people exposing here. stupid – and worse – behavior by DOD managers. Finally, in their original editorial request, Th e Ri p o n Whistleblowing is essential to keep the building honest. Fo r u m also asked for one program or one thing that we Such people who help identify crooked and wasteful needed more of at the Defense Department. Without decisions should be encouraged, not intimidated – which is question, that one thing would be “oversight.” Right now, why this personnel system should be heavily modified, if not the advocates of business as usual lack any sense that others eliminated. are looking over their shoulder, will catch the screw ups and 4. Bad managers. Exemptions from accountability, the corruption, and will react accordingly. approval of unrealistic cost and performance promises, Any sense of informed, scrupulous, truth-telling – Harry harassment of informed dissent, and more do not happen on Truman style – is completely missing in Congress and all too their own; they require bad managers. Secretary of Defense rare inside the Pentagon. Adult supervision, and a sense that Robert Gates set an excellent example when he fired the it is everywhere, can work wonders. RF Secretaries of the Army and the Air Force and the Chief of Staff of the Air Force for cause. He needs to greatly expand Winslow T. Wheeler is Director of the Straus Military that practice. For example, any program manager running a Reform Project at the Center for Defense Information. program that cannot pass an audit should be relieved. Previously, he worked for 30 years on Capitol Hill 5. Decimate the FYDP. The Pentagon’s long range for Republican and Democratic senators and for the plan, the Future Years Defense Program (FYDP), anticipates Government Accountability Office. He is the editor of a today’s spending levels to continue indefinitely. More money new anthology, “America’s Defense Meltdown: Pentagon has made us smaller, older, and weaker, and the expectation Reform for President Obama and the New Congress.”

12 RIPON FORUM Spring 2009 Fiscal Disorder The broken budget process and the dire need for reform

JIM BATES

This past February, four months after the beginning a budget resolution. This resolution is developed of the fiscal year, Congress passed the last bill needed through the legislative process, but is not presented to to fund the government. the President and hence doesn’t reflect the consensus of But what it finally passed was more than just late — both the Congress and the Executive branches. What it it was sloppy. Instead of offering separate appropriation is supposed to do is provide a framework for subsequent bills that could be debated thoughtfully and with spending and tax bills. Congress then considers twelve undivided attention, Congress lumped them into one, separate appropriations bills, together with any tax and gigantic 225-page “omnibus” bill, and hurriedly passed entitlements bills on its legislative agenda that will it on the floor. become law once Does anyone they are signed by think this bill the President. got the scrutiny Our current it deserved? budget process Moreover, at a time is the product of near-universal of several major recognition that reforms -- the last our entitlement was in the 1970s and tax policies -- but in recent are unsustainable, times it has failed Congress has made us in all the most no improvements important places. in these areas for The first — the next fiscal and most basic year. Our national — criticism conversation on this of the budget broken system is process is that it long overdue. And Almost everyone knows that in the doesn’t produce if we are serious a simple, realistic about changing coming decades, we will be unable to framework for the situation, then sustain our entitlement commitments how government budget reform intends to spend in will have to and tax policies, but the budget process the short term, plan mean reforming doesn’t focus on the level of for entitlements, or the process by entitlement growth... impose taxes. The which Congress President’s budget considers, passes, and Congress’ and evaluates its annual budget. budget resolution are both just preliminary steps in In theory, the federal budget process is the passage of a budget. They can and often do get straightforward. kicked aside in the scuffle between the appropriations, First, the President submits his “budget,” which authorization, and tax writing committees, all of which is actually just a recommendation that reflects the create different pieces of legislation that combine to administration’s own priorities. After the President’s form the big fiscal picture. budget, Congress creates a blueprint for itself called Moreover, both the President’s budget and the

RIPON FORUM Spring 2009 13 budget resolution make a variety of unrealistic enforcement — have proved themselves largely assumptions that render them largely useless. For ineffective. The original pay-as-you-go rules had the instance, the president’s fiscal year 2008 budget force of law and were enforced by automatic spending accounted for negligible spending on the wars in Iraq cuts. The current rules are not legally binding and and Afghanistan, and made the unlikely prediction easily circumvented, whether through waving budget that Congress would soon allow expiring tax breaks to rules, designating phony emergencies, or pushing costs place billions of dollars in additional tax burden on the outside the budgetary window. middle class. There has to be a better way to do things. Nor does the budget process focus efforts on the An improved budget should meet a few basic biggest drivers of deficits and the debt: long-term criteria. It has to be simple and realistic enough to set entitlement spending. Almost everyone knows that credible limits on spending and tax bills. The budget in the coming decades, we will be unable to sustain process should provide incentives for lawmakers our entitlement commitments and tax policies, but the to engage openly in the inherent trade-offs of real budget process doesn’t focus on the level of entitlement budgeting. And they should work within a framework growth in existing law or, for changes to existing that takes the country’s entire fiscal picture into entitlement law, growth that occurs outside of a narrow account: entitlements, discretionary spending, and window of time. Existing budgetary limits are easily taxes all have to be on the table. And perhaps most evaded by pushing polices outside this budget window importantly, to ensure that we don’t make decisions that or pretending that they will endanger our country’s fiscal expire when they likely health down the road, the will not. In the end, most of budget should give ample Congress’ time is spent on In practice, lawmakers consideration to the long-term the 38 percent of the budget ramifications of entitlement that makes up discretionary are actually encouraged to and tax policies. Finally, spending, with barely any stick with their party when a good budget process has formalized oversight on the they vote on the budget to be backed up with tough mandatory side. enforcement mechanisms: Step back for a moment resolution, but then vote whether through enforceable and think about what budgets with their Districts or limits on expenditures, some are supposed to do. We’d form of PAYGO, or a new all like to spend as much as States when it comes to the mechanism, lawmakers must we want, but budgets show appropriations bills. be held accountable for their us our limits by bringing budgetary decisions. all of our obligations and To address this critical revenue sources into one issue, the Committee for a unified picture. An ideal budget would encourage Responsible Federal Budget, working with the Peterson policymakers to take a look at entitlement spending and Pew Foundations, has assembled a bipartisan team when they adjusted discretionary spending (and vice- of experts for a budget reform commission. This versa), weigh the importance of one tax break against effort is modeled after a noted 1967 budget concepts other tax breaks, adjust revenue to compensate for new commission that laid the foundation for today’s spending, and generally make real tradeoffs across all consolidated budget. As our government spends categories. trillions to pull the country back from recession, the The bottom line is that if something is important crisis in the economy has spilled over into the budget. enough for the government to do, it is important And once we begin to repair this budgetary damage, we enough to pay for either by raising taxes or cutting will be hit by a long-term structural imbalance between other spending. But our budget process is missing this spending and revenue that requires even harder choices. fundamental connection between the parts. Instead, The need for serious and thoughtful reform has perhaps we foster compromise at the level of individual never been greater. RF appropriations bills, where the question is simply how to spend money within a narrowly defined area Jim Bates is the Project Director for the Peterson-Pew of appropriations. In practice, lawmakers are actually Commission on Budget Reform at the Committee for encouraged to stick with their party when they vote on a Responsible Federal Budget. He previously served the budget resolution, but then vote with their Districts as Chief Counsel, Deputy Staff Director, and Staff or States when it comes to the appropriations bills. Director of the Committee on the Budget for the U.S. Finally, the “teeth” of our budget process — House of Representatives.

14 RIPON FORUM Spring 2009 The Promise of Bipartisanship and the Perils of Reconciliation

Steve Bell

At a recent forum on bipartisanship sponsored by Casey responded that the two issues were much National Journal, two moderate and thoughtful senators, different. After all, he noted, we have been debating real Democrat Bob Casey of Pennsylvania and Republican health care reform for 30 years in the Congress. Cap and Mel Martinez of Florida, had an exchange that captures trade and other climate change initiatives, on the other the tension on the Hill, especially in the Senate. hand, have only had wide-ranging debate for four or five The panel, of which I was a member, was asked years. Casey concluded that reconciliation in his view about reconciliation under the budget process. In the was a proper legislative vehicle for health care reform. Senate, reconciliation remains one of the few ways to Al From, a third member of the panel and the circumvent Rule 22 (the so-called filibuster rule). This outgoing head of the Democratic Legislative Council, “expedited process” was fully developed by former noted that he had worked on the original Budget Reform Senate Budget Act of 1974 C o m m i t t e e in the House. Chairman Sen. In his view, Pete V. Domenici r e c o n c i l i a t i o n in early 1981 and the Budget in a legislative Act had been so tour de force twisted out of that passed the shape that the “revolutionary” original authors Reagan budget of the legislation before the end of would never summer in one recognize its big package. present form. Both Casey He said that the and Martinez widespread use of agreed that reconciliation, as using the At its core, reconciliation was our attempt to a general notion, reconciliation stop a filibuster on certain legislation. had gone too far. to pass a climate As the staff change bill It wasn’t conceived as a bipartisan director of the would probably vehicle at all. Senate Budget doom such a C o m m i t t e e bill. The inability of the full Senate to debate such a from 1981 to 1986, I was privileged to help expand fundamental change in energy policy, they concurred, reconciliation as a legislative tool. Whether future needed much more debate than would be afforded under legislators will damn me or praise me remains to be reconciliation. seen. But I have had the opportunity to see the Senate However, Casey and Martinez disagreed on the use majority decide both to use and to reject reconciliation of reconciliation to pass “health reform.” as a device to move major legislation. Martinez noted that such a change was just as The chore we faced in 1981 was much different than fundamental a revision to existing institutions as a that facing the Congress now, 28 years later. cap and trade climate change bill would be. Using Then, the Budget Committee Chairman and senior reconciliation for health care reform would be wrong, staff were just about the only people who understood what he said. was going on. We were dramatically and intentionally

RIPON FORUM Spring 2009 15 broadening a part of the 1974 Budget Act. We knew that I also think that an intelligent majority in the Senate we had to limit Senate debate on the wide-ranging FY82 has to be seriously considering reconciliation for major budget. It would never pass the Senate otherwise; it’s initiatives. As it now stands and as so many in the media opponents would filibuster it to death. In 1981, under now reminds us, Majority Leader Harry Reid has 59 Majority Leader Senator Howard Baker, Domenici votes. Without reconciliation, he will need 60 votes to and his staff were given wide latitude to develop new pass almost anything significant. With reconciliation, he procedures. The Senate Parliamentarian was always will need only 5l at most. The temptation must be great, kept in the loop as staff ideas germinated. But, almost as it was to us in 1981, to resort to reconciliation and pass no one else in the Congress really understood what we as much of the Obama budget as possible. were doing. The final decision, it seems to me, will reside with Now, in 2009, it is a rare senior Member or staffer the President. The House majority will do whatever it who doesn’t understand reconciliation, the Budget Act, wants, using waivers and the Rules Committee. The super-majorities, and recondite points-of-order. The Senate majority has no such luxuries. Parliamentarian’s office has spent thousands of hours Will the President and his senior staff want the studying the Act. And, the famous “Byrd Rule,” named glorious headlines of a major budget victory in September? after Senator Robert C. Byrd, restricts materially the Or will President Obama look a little further ahead and kinds of legislative language that reconciliation can weigh the risks of alienation of the minority on most, if contain. not all, of his remaining major thrusts, against the boost At its core, reconciliation was our attempt to stop a in popularity that a perceived grand budget victory will filibuster on certain legislation. It wasn’t conceived as bring him. a bipartisan vehicle at all. Indeed, Leader Baker upheld Make no mistake about it -- aggressive use of reconciliation and the evolving Budget Act more than 50 reconciliation makes bi-partisanship in Congress much consecutive times in 1981, winning each challenge by a less likely. Want proof? From 1981 forward, the Senate 53-47 margin. The use of reconciliation has been fraught saw almost no bipartisanship on the budget for almost a with overtones of its partisan beginnings ever since. decade. RF Thus, the question: can a procedure that is designed to empower the majority by emasculating the filibuster Stephen E. Bell served on the Senate staff of U.S. ever draw significant support from the put-upon minority? Senator Pete V. Domenici (R-NM) from 1974 to 1986 Does it make a difference what legislative policy the and then again from 1996 to 2009. From 1981 until reconciliation contains? Or, is Senator Martinez right, 1986 he was Staff Director of the Senate Budget that the very use of reconciliation for major reform would Committee, which Senator Domenici chaired. He is harden minority opposition? now principal of Steve Bell, LLC, a consulting firm, and On balance, I think Senator Martinez is right. But, a Visiting Scholar at the Bipartisan Policy Center.

The Reconciliation Process: A Brief Tutorial

In some years, the budget resolution includes In the House, reconciliation bills are typically reconciliation instructions. Reconciliation instruc- considered under the terms of a special rule. In the tions identify the committees that must recommend Senate, reconciliation bills are considered under changes in laws affecting revenues or direct spend- limitations imposed by Section 305, 310, and 313 of ing programs within their jurisdiction in order to the Congressional Budget Act. implement the priorities agreed to in the budget These sections limit debate on a reconciliation resolution. bill to 20 hours, and limit the types of amendments All committees receiving such instructions that may be considered. must submit recommended legislative language to the Budget Committee in their respective chamber, (from “The Congressional Budget Process: A Brief which packages the recommended language as an Overview,” published by the Congressional Re- omnibus measure and reports the measure without search Service on November 26, 2008, and avail- substantive revision. A reconciliation bill would able on the website of House Budget Committee then be considered, and possibly amended, by the Republicans at http://www.house.gov/htbin/cr- full House or Senate. sprodget?/rs/RS20095.)

16 RIPON FORUM Spring 2009 An Appointment Made by the Public, Not in the Backroom

DAVID DREIER

If there was ever a time when the American people I believe the amendment we are proposing is a needed a clear, undiluted voice in Washington, it’s now. “perfecting” amendment to the 17th amendment to Working families are facing tremendous economic the Constitution. After years of backroom deals, this difficulties and we remain engaged in conflicts across the amendment reformed the Senate-selection process globe. And yet, the residents of four states — Illinois, by instituting direct elections. It left to the states the New York, Colorado, and Delaware – haven’t elected authority to decide what to do when an out-of-cycle their newest Senators. Those same Senators are now vacancy came up. Most states chose to allow their voting on the critical economic issues of our time. governors to make appointments. A few, including Some of my colleagues Wisconsin, chose to leave and I believe this is it to the people, calling for undemocratic. The people special elections. While of those states, and every our amendment does call state, deserve a voice in for all Senators to be their representation. That is elected, it does not dictate why I, along with Senators the terms of those elections, Russ Feingold (D-WI) leaving that to the states. I and John McCain (R-AZ) view this proposal as the and House Judiciary fulfillment of the reform Committee Chairman John effort that began with the Conyers (D-MI), have 17th amendment nearly a proposed a constitutional century ago. amendment to require Some argue that special ALL U.S. Senators be duly elections are too expensive elected by the people they and time consuming. This represent. argument is a familiar one, We have not proposed and does have resonance at this amendment as a a time when State budgets reaction to the people are stretched very thin. chosen to fill the recent However, I do not believe Senate vacancies, but budget constraints nullify because of the people the imperative for electing they represent. They are We have not proposed this our leaders. understandably outraged at amendment as a reaction to Others, like columnist some of the gamesmanship George Will, have argued that surrounded the most the people chosen to fill the that this amendment only recent Senate appointments. recent Senate vacancies, but weakens the pillars of These incidents don’t need federalism that the Founders to be recounted yet again, because of the people carefully constructed. Mr. but suffice it to say, they they represent. Will recently wrote in the have brought back to the Washington Post that our forefront of American discussion the need for popular Constitution created distinct electors for the three elected elections when deciding our representatives in both bodies of the federal government, in order to enhance the bodies of Congress. separation of powers that provides the critical checks

RIPON FORUM Spring 2009 17 and balances in our federalist system. The President have a loophole. The large number of sudden vacancies was to be elected by the electoral college, the Senate in the Senate this year has made the consequences of by the state legislatures and the House directly by the this loophole very clear. Our proposed amendment will people. address this challenge. With this perspective in mind, the 17th amendment A few years ago, the issue of preserving the direct would appear to have undermined the founders’ election of our representatives was raised within the intentions, and today’s proposed amendment would context of a continuity plan for Congress in the event of undermine them further. I respect Mr. Will’s point of a catastrophe and the deaths of more than 100 members view. I, too, look to the founders’ original intentions of the House. Congressman Jim Sensenbrenner and do not take amending the Constitution lightly. At (R-WI), another original co-sponsor of our amendment, the same time, I believe that in addressing this matter we and I argued vigorously for the direct election of all must look at the history of our electoral processes – not House members, as the Constitution mandates, under just how they were envisioned at our nation’s founding, any circumstance. At the time, we argued that holding but how they have been conducted in practice. and participating in elections, even in the event of a From a purely academic perspective, it is interesting catastrophe, was essential to keeping our democracy vital to consider whether the authors of the 17th amendment and functioning. We were joined by an overwhelmingly could have plotted a reform course that was truer to bipartisan majority of our colleagues. the founders’ intentions. But the reality today is that Senate vacancies are no less significant than we now have a nearly 100-year tradition of directly vacancies in the House. Yes, they should be filled as electing our Senators. This practice has become an quickly and fairly as possible. But most important, they integral part of American democracy. Trying to undo a should be filled by the American people. RF century of our history simply is not a viable option. The American people elect their Senators, and would not David Dreier represents the 26th District of California accept any other method. Yet the current system does in the U.S. House of Representatives. T:7.375 in

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DOCUMENT PATH: Retouching:Volumes:Retouching:Clients:Chevron:9B55610_CVX_ARC_Y75602:Latest Files:9B55610a2_jk.indd FONT FAMILY: Interstate (Regular, Bold), Helvetica Neue (55 Roman) LINK NAME: CVX7K47684h1_c_85.50.tif, HallmarkHE_R_vert_4c_yr1.eps INK NAME: Cyan, Magenta, Yellow, Black From the Bully Pulpit Meeting America’s Challenges on Health Care

Wally Herger

Thank you for inviting me to speak philosophical differences. Already health plan, Republicans will have strong with you today. Last year, as ranking this year, Democrats in Congress have objections. The number one problem Republican on the Trade Subcommittee, passed an aggressive expansion of in health care today is out-of-control I spoke about the challenge of government-run health care that will costs, and government programs have maintaining America’s competitiveness move 2 million children from private a terrible track record on cost control. in the global economy. I Republicans believe cost- recently became ranking saving innovations in health Republican on the Ways care will come through and Means Health individual choice and market Subcommittee, and with competition, just as they do health reform promising in every other sector of our to be one of the top issues economy. before Congress this year, I believe there are I’d like to talk about what four key elements that I see as the right path for must be part of any health Congress to take on this reform legislation: stability, critically important issue. affordability, accessibility, There’s no question and accountability. I’ll that we’re about to discuss each of these in turn, see the strongest push beginning with stability. for health reform in Approximately 160 million years. President Obama Americans currently get campaigned aggressively their coverage through an on the issue, and one of employer-sponsored health his top priorities is to pass plan. The overwhelming a comprehensive overhaul majority of these people want this year. Republicans to keep their coverage. We agree that our health care must not risk the coverage system is in desperate need of people who already have of reform, with rising costs good insurance.

increasingly threatening photo by Marty LaVor The other side of families, businesses, stability is the impact on the providers, and taxpayers. Congressman Herger spoke at a Ripon Society Bully Pulpit budget. Today, Medicare and luncheon on health care held April 2nd on Capitol Hill. We must ensure that every Medicaid have trillions of American has access dollars in unfunded liabilities, to affordable, high-quality health health insurance into the SCHIP threatening catastrophic consequences care. And there is real potential for program, and have taken the first steps for our nation’s future. Reforming bipartisan agreement in some areas, like toward allowing the federal government and preserving federal entitlement emphasizing prevention and disease to dictate which medical treatments will programs must be part of any stable management, and paying providers be available. If health reform means health reform solution. By the same more for high-quality care. creating a government-run insurance token, we should not make large new At the same time, there are some plan that will force an estimated 120 funding commitments that we cannot big issues where we have very real million Americans out of their current pay for.

RIPON FORUM Spring 2009 19 Second, affordability. As I A final point on affordability: or her health. In recent years, a number mentioned earlier, I believe controlling Currently, underpayments by Medicare of employers have begun to incorporate health care costs must be at the heart of and Medicaid force doctors and hospitals prevention and wellness programs in reform. Rising costs are eating away to over-charge those with private their health plans. We should encourage at Americans’ paychecks and placing insurance, raising the average cost of these innovations and create similar American businesses at a competitive family coverage by nearly $1,800 a year. incentives in public programs. disadvantage. While expanding Adding a new government-run health Accountability is important for coverage is an important goal, we plan, as the Democrats have proposed, providers as well. The lack of publicly cannot simply add millions more people would only make this cost-shifting available information about the quality to a broken system. Universal access to problem worse. Soon, families and and cost of health care services is coverage cannot happen until the cost business would find it too expensive to unacceptable. Health reform must create of coverage comes down, and the cost buy and offer private health insurance rigorous standards for transparency, of coverage won’t come down until we and would be dumped into a government and government programs should be find a way to reduce the cost of actual health program. That is an outcome we overhauled to reward physicians and health care services. must avoid. hospitals that perform high-quality care. Medical malpractice reform must Accessibility has to go hand in This will raise the bar and improve be part of the solution. People who hand with affordability. In theory, you health care for all Americans. are truly injured must have their day could provide coverage to everyone Several weeks ago, I and other in court, but overzealous trial lawyers at relatively low expense -- just follow members of Congress -- both Democrats shouldn’t be able to play the and Republicans -- participated medical malpractice lottery in a discussion on health reform and hope for a jackpot. The at the White House. While it’s system has to become more Republicans agree that our encouraging that the President predictable, by capping health care system is in desper- is talking about bipartisanship, noneconomic damages and ate need of reform, with rising health provisions in the SCHIP perhaps by moving toward a bill and the stimulus package system of health courts staffed costs increasingly threatening earlier this year were drafted by judges who are medical families, businesses, providers, behind closed doors and rushed experts. through without consultation. Another way to promote and taxpayers … At the same We will soon find out if affordability is to focus on time, there are some big issues Democratic leaders in Congress keeping people healthy, rather where we have very real philo- are serious about having an than waiting till they get sick open and transparent process and need more expensive sophical differences. and listening to Republicans’ treatment. It’s common sense ideas for stable, affordable, that paying for early cancer accessible, and accountable screenings is more cost-effective than the Medicaid model and pay providers health care. treating cancer when it’s too late. far below cost. The trouble is, coverage I, and my Republican colleagues, Health reform should prioritize both isn’t worth very much if you can’t find stand ready to work with President preventing disease and managing a doctor who will accept your coverage. Obama and Congressional Democrats to chronic conditions. And as we’ve already begun to see with improve our nation’s health care system, Congress should also make the tax the debate over comparative effectiveness but we will not support proposals that code fairer. The self-employed get a research, the government will be tempted threaten to eliminate private insurance less generous tax break than those with to save money by denying coverage for and increase government control. RF employer-provided coverage, and those necessary treatments that are deemed who buy insurance on the individual “too expensive.” In Britain, the national market get no tax benefit at all. That’s health system literally requires seniors Wally Herger represents the 2nd District simply unfair, and we should extend a with vision loss to go blind in one eye of California in the U.S. House of similar tax benefit to everyone. In this before they’ll cover a drug to save the Representatives. He is the Ranking process, I believe we need to take a other eye. The American people rightly Republican on the Ways and Means look at whether we can do a better job find such rationing unacceptable. Subcommittee on Health. He delivered of providing more help to those who Finally, I’ll close with accountability. the above address at The Ripon need it most, rather than encouraging Reform should reward healthy behavior Society’s Bully Pulpit forum on Health people to buy more coverage than they and recognize that everyone has a Care, which was held on April 2 on really need. personal responsibility to improve his Capitol Hill.

20 RIPON FORUM Spring 2009 A Holiday to Invest JOHN CAMPBELL

The nation, and in fact, the entire world are now shallower while limiting the negative long term impact. well within the grip of a major economic downturn. However much of the action taken thus far will neither The full duration and scope of this downturn are still make the recession shorter or shallower and has the undetermined, but it is unlikely that we have seen the potential to have very negative long term effects, such bottom yet, and the United States government has as high interest rates, inflation, and reduced growth. taken unprecedented action to But that is an argument for another column. deal with this problem. In this article, I would The first major action, taken like to suggest an idea that in October 2008, created the will actually contribute to Troubled Asset Relief Program making this recession shorter (TARP) and was intended to and shallower. Furthermore, prevent a complete collapse of it will not cost the Federal our financial markets, which Treasury or the Federal at the time was a very real Reserve anything over the possibility and would have led next 12 months. In fact, it to literally thousands of bank will actually raise revenue failures. In my opinion, the without raising taxes in the TARP, in conjunction with the short term. There will be little Federal Reserve’s monetary long term negative impact and actions at the time, prevented no private businesses will be this collapse, and accordingly nationalized or drawn into I believe this scenario has now receivership. been avoided. Sounds too good to be But still, major government true? It’s not. Allow me to actions and interventions explain. continue, including the so-called It is widely acknowledged “stimulus” spending bill, the that the depth of this recession nationalization of some banks has been amplified by fear, and insurance companies (and and indeed, panic. People are arguably General Motors), more ...this capital gains afraid to invest or spend for Fed actions, and additional tax holiday idea will fear that they may lose their programs being announced job, or that the price may yet by Treasury or the Obama stimulate economic go lower, or because they are administration literally every activity and thereby create concerned that the potential day. future risk is greater than Why? If we’re no longer permanent private sector any potential future return. If facing imminent collapse, what jobs and it will do so either the perceived risks in are these actions intended to with no immediate cost the marketplace were reduced accomplish? After all, you or the potential returns were can’t prevent a recession that’s whatsoever. increased, then investors and already happened, right? the public at large might be No you can’t. But what government action is more willing to invest and begin a return to a more intended to do is make the recession shorter and normal environment.

RIPON FORUM Spring 2009 21 To address this I have introduced legislation recovery has taken hold. But even that revenue ‘loss’ designed at improving this risk/return relationship in is in question. order to encourage people to invest now. H.R. 1632 One thing we conservatives have always believed would eliminate the Capital Gains tax on any assets is that we should use ‘dynamic modeling’ when purchased in 2009 (after the date of enactment of figuring the effect of tax policy. Therefore if you lower the bill) and held for at least 12 months. It will not a tax, people will make different decisions due to the matter when the asset is sold. For instance, if you buy reduced tax. Those decisions may result in enough a business in 2009 and sell it in 2015, you won’t pay a additional economic activity that revenue actually federal Capital Gains tax; if you buy a house in order to rises. Conversely, tax increases result in people making rent it out in 2009 and sell it in 2011, no capital gains conscious decisions to avoid or reduce the increased tax. This bill will encourage the many people who are tax thereby often resulting in reduced revenues. “sitting on the sidelines” to invest right now, rather But I digress. Suffice it to say, this capital gains than continue to wait for a “bottom” because they will tax holiday idea will stimulate economic activity and be rewarded with a 15 percent greater return. This will thereby create permanent private sector jobs and it will encourage activity in the purchase of stocks, bonds, do so with no immediate cost whatsoever. This stands and real estate, which are major sectors of the economy in contrast to many of the Obama/Pelosi policies which that will need improvement before we can experience have huge costs and minimal job creation potential. a recovery. In my opinion, these policies have largely made the As a bonus, this bill has no cost to the Federal problem worse rather than better. Treasury for at least 12 months while the economy, There has been talk of a “Stimulus II” later this and therefore revenues, are still struggling. In fact, year. What might be included in that scares me if it’s the bill would certainly stimulate purchases of assets, anything like “Stimulus I.” But maybe -- just maybe which means that someone must sell those assets and -- we can include some cost-free common sense ideas may incur a capital gains tax on the sale that would like this one. RF not have otherwise occurred. Any loss of revenue would not occur until these assets are eventually sold, John Campbell represents the 48th District of which cannot be before mid-2010, when hopefully, a California in the U.S. House of Representatives.

Ideas that matter, since 1965. RF65

22 RIPONRIPON FORUM FORUM April/May Spring 2009 2007 C1 Politics & Perspective Congress by the Numbers A closer look at the record – and the rhetoric

Robert S. Walker

In his best enlightened, post- $128.2 billion surplus. Mr. Summers and others want to pejorative, bipartisan manner, Democrats have tried to make the focus on the eight years of the Lawrence H. Summers, President case that the huge deficit turnaround Bush presidency when Republicans Obama’s chief economic advisor, resulted from Clinton Administration controlled both the White House dismissed Republican efforts to policies including the tax increases and the Congress. Fair enough. In modify the stimulus package on early in President Clinton’s term. But January 2007, when the Democrats Capitol Hill earlier this took control of both houses of year by saying, “Those who Congress, the Federal budget presided over the last eight deficit stood at $161 billion. years, the eight years that Yes, the surplus was gone; brought us to the point where Republicans had engaged in we inherit trillions of dollars too much spending and had of deficit, an economy that’s paid a political price for so collapsing more rapidly doing. But, in reality, the than at any time in the last budget deficit was still slightly 50 years, don’t seem to below what they had inherited me in a strong position to in 1995. lecture about the lessons of With the Democrats history.” in control of Congress and The premise that recent President Bush still in the history undermines the White House, the deficits Republican’s economic swelled out of control. By proposals deserves January 2009, the Federal red examination by the numbers. numbers had gone to $455 In particular, the record billion in actual 2008 deficit of Republican majorities and to a projected $1.2 trillion on Capitol Hill versus the as a 2009 projection. Democratic majorities of the What changed? The last two Congresses should only change was the control be carefully scrutinized. of Congress and with that Let’s look first at change of control, the renewed deficit spending since Mr. emphasis on tax increases, Summers used that as the principal such claims ignore the fact that the additional spending, and more example of Republican malfeasance. budget projections in 1995 showed regulation. When Republicans took control of $200 billion dollar deficits for as far But deficits, despite Mr. Congress in 1995 after 40 years as the eye could see. Republican talk Summer’s prioritization of them, do of Democratic control of the U. about balanced budgets was routinely not tell the whole story of the damage S. House of Representatives, the dismissed as unattainable and even done to the economy by two years of Federal deficit stood at $164 billion. silly. The change of congressional Democratic dominance on Capitol Six years later in January, 2001, power was the driving force that Hill. We should look at some other when George W. Bush was assuming created balanced budgets and even telling data and measure Congress by the presidency, the deficit had been surpluses within six years. the numbers. erased and the Federal budget had a No one disputes that success. In January 1995, the

RIPON FORUM Spring 2009 23 unemployment rate was 5.6 percent. use of earmarks to drive that spending taxes on investments and capital. In January 2007, when Republicans spree during the period 2001-2007. They proposed increased costs to the lost control of Congress, the rate They compounded their spending economy with more regulation and had dropped to 4.6 percent. In other with a series of ethical issues and the expense aimed most devastatingly words, during the Republican era of result was lost political credibility. at the small business sector, for congressional control, the GOP had But the Democrats who replaced instance, the increase in the minimum achieved what many economists them immediately began to talk wage. And, in the end, Democrats regard as a full employment level. In down the economy. They made clear convinced investors that the future December 2008, after just 23 was not growth oriented, months of Democratic control but growth agnostic. The on Capitol Hill, the actual result was that investors unemployment figure was began moving their money 7.2 percent with a projected to other safer and more January 2009 estimate of 8.3 tax protected instruments. percent. Today we can measure, by So, how about measuring the numbers, the two years economic growth? In January 2007-08, of congressional 1995, the GDP was growing economic performance, and at a nominal rate of 3.66 it is stunningly inept. percent. That rate had nearly House Financial doubled to 6.88 percent by Services Committee January 2007. In October Chairman Barney Frank 2008, (the last official (D-MA) faults Republicans measurement) that same rate for the economic mess that stood at a minus 4.11 percent, the country faces. This past nearly a 10 point drop, and February, he said on Meet has gotten worse since. the Press criticizing Senator But the real telling John Ensign for his critique figure on whose economic of overspending in the theories work the best may stimulus bill, “On the bloated rest with the Dow Jones spending, this comes from a Industrial Average. After 40 man whose party controlled straight years of Democrats the federal government — in Congress working House, Senate and White with both Republican and House — for six years.” But Democratic Presidents, the …during the Republican era now we know the numbers DJIA was 3838.48 in January tell the real story. 1995. During 12 years of of congressional control, the It is the last two years Republicans working with GOP had achieved what many when Democrats controlled a Democratic President and the Congress that the economy a Republican President, economists regard as a full truly went in the tank. Larry the Dow Jones swelled to employment level. In December Summers and Barney Frank 12474.53 -- more than a 2008, after just 23 months of may believe that recent 300 percent increase. After economic history is on their just two years of Democrats Democratic control on Capitol side. But you cannot prove it replacing Republican control Hill, the actual unemployment by the numbers. RF of Congress, the Dow stood at 8116.03 on January 26, figure was 7.2 percent with a Robert S. Walker 2009 -- about a 35 percent projected January 2009 estimate represented Pennsylvania’s th drop. of 8.3 percent. 16 District in the U.S. So whose economic House of Representatives history in recent years is from 1977 to 1997. He is better? The numbers tell the story. they intended to allow previously currently the Executive Chairman Republicans can be faulted for failing enacted tax cuts to expire. They of Wexler and Walker Public Policy to hold the line on spending and the sought to raise revenue with new Associates.

24 RIPON FORUM Spring 2009 A Scalpel for President Obama

Lou Zickar

During his campaign for and figurehead appointee to get the is held. The intent is to take politics President, Barack Obama promised job done. He will need something out of the equation and make the many things. One of his promises with teeth in it, something that has needed hard decisions. But the was to govern from the middle. Yet been proven to work, something larger goal of a Sunset Commission four months into his administration, both Democrats and Republicans is to make government smaller and it has become increasingly clear can support. In short, he will smarter. This leads to the second that he faces two main obstacles need a Sunset Commission. Here’s reason President Obama should in fulfilling this promise and why: consider the idea: achieving this goal. The obstacles 1. The actions of a Sunset 2. Sunset Commissions have are Nancy Pelosi and Harry Reid. Commission are binding. Under been proven to work. Colorado One is a San Francisco this process, an expiration date approved the first Sunset law in limousine liberal with a lifetime is placed on all new federal 1976. Twenty states had enacted ADA rating of nearly 100 some form of Sunset law percent. The other is an old- by 2002. Texas has perhaps fashioned big government the nation’s most successful Democrat who supports In recent years, the Sunset program. Since its building a “mob museum” in GOP has championed creation in 1978, the state his home state of Nevada as a Sunset Commission has way to stimulate the nation’s the proposal. Yet 30 abolished 52 agencies and economy. Together, they years ago in Washington, consolidated another 12. represent not only Obama’s In the process, it has saved greatest obstacle in moving establishing a Sunset Texas taxpayers nearly $728 to the center, but his biggest Commission was an idea million. Unsurprisingly, it barrier in accomplishing embraced by Democrats. has also won the enthusiastic something Republicans failed support of Republicans and to do when they controlled Democrats alike. both ends of Pennsylvania That leads to the third Avenue – get spending under programs. When the expiration reason a Sunset Commission is control. date is reached, a bipartisan Sunset something the president should In response to these concerns, Commission -- comprised of elected support: Obama pledged during the and unelected officials -- meets 3. A Sunset Commission has campaign to take a “scalpel” to to review whether the program bipartisan roots. Indeed, it’s not the federal budget. After his is still needed. If the answer is just Republicans and Democrats election, he also announced plans no, the program is abolished. If in Texas who have supported to appoint a “performance officer” the answer is yes, the program is establishing a Sunset Commission. to make sure tax dollars are well continued for another set time, Republicans and Democrats in spent. Unfortunately, with the with changes made as needed to our nation’s capital have backed deficit at more than $1 trillion and ensure the program is still working the idea as well. In recent years, government spending consuming as originally intended. the GOP has championed the more than 20 percent of the The recommendations of the proposal. Yet 30 years ago in economy, the new president will commission are then presented to Washington, establishing a Sunset need more than a figurative scalpel Congress, and an up-or-down vote Commission was an idea embraced

RIPON FORUM Spring 2009 25 by Democrats. Perhaps Muskie summed it up Chicago Professor Theodore Lowi In fact, in 1977, it was one of best when explaining the reason the published a book called “The End of the top three priorities on Capitol idea enjoyed such broad political Liberalism” (see box on next page Hill. The top priority, S.1, was a jobs support. “Conservatives see this as a for more information on the origin bill aimed at easing unemployment, way of reducing the responsibilities of the Sunset proposal). In that which stood at 7.5 percent when of government,” he explained, while book, he first suggested establishing Jimmy Carter took office. The third it is viewed by “liberals as a way of a “Tenure-of-Statute” act, which priority, S.3, was a bill to reform getting our house in order to take on would require any law that created health care. The second most new responsibilities.” a federal agency to expire in five to pressing priority, S.2, was a bill to The Senate overwhelmingly 10 years. When Mr. Lowi’s idea was get federal spending under control approved S.2 by a vote of 87-1 later considered by Congress, another by establishing a federal Sunset in October 1978. Unfortunately, Chicagoan, Abner Mikva, testified Commission. the bill was never voted on in the in its support, saying a Sunset The bill’s C o m m i s s i o n main sponsor “would force on was Edmund us a discipline of Muskie, the reviewing what l e g e n d a r y we have done D e m o c r a t i c in established senator from periods of time.” Maine. Its At the time s u p p o r t e r s of his testimony, ranged from Mikva was R e p u b l i c a n s serving in Barry Goldwater the House of and Jesse Helms Representatives. to Democrats He would later G e o r g e go on to serve M c G o v e r n as a mentor for and Edward Barack Obama. Kennedy. “I In 2006, he regard the sunset counseled the concept as one young senator of the most to seek the i m a g i n a t i v e White House. and innovative His advice approaches to helped convince g o v e r n m e n t Its supporters ranged from Republicans Obama that the reform that has Barry Goldwater and Jesse Helms to time was right been proposed Democrats George McGovern and then to pursue in many years,” the presidency. Kennedy said. Edward Kennedy. Perhaps his All told, S.2 testimony will had 59 cosponsors in the Senate - House, and the idea was never convince Obama that the time is right 30 Democrats, 28 Republicans and seriously considered again. It should now to pursue another bold idea – one independent. In the House, the be considered now for the reasons establishing a Sunset Commission. bill had more than 150 cosponsors, previously discussed - the idea is It is an idea that would not only including such conservative binding, proven and bipartisan. provide the President the scalpel Republicans as Mickey Edwards But there’s another reason he needs to cut the federal budget, and Bob Walker and such liberal President Obama might find but one that would also help him Democrats as Dick Gephardt and the establishment of a Sunset overcome the obstacles he is likely Shirley Chisholm. President Carter Commission appealing: to face on Capitol Hill. RF also backed the plan, as did interest The idea originated in his groups ranging from the Chamber hometown. Lou Zickar is the editor of The of Commerce to Common Cause. In 1969, University of Ripon Forum.

26 RIPON FORUM Spring 2009 Lowi’s Intent and the Origin of Sunset Author and Professor Theodore Lowi is widely credited with being the “father” of federal Sunset laws, having first suggested a “Tenure of Statutes” act in his 1969 book, “The End of Liberalism.” In recognition of his role in originating the idea, The Ripon Forum contacted Professor Lowi with a request that he write an essay discussing the genesis behind it. In making this request, we expected a discourse on the need to make government smaller and smarter. What we received instead was a discussion that revealed his original intent had less to do with government efficiency than how our laws are made. Professor Lowi’s letter is below:

Thank you for the opportunity to set the record straight on my proposal for a “tenure of statutes” act. It received a good bit of attention in the 1970s, due particularly to Common Cause, a prominent reformist group. They improved on it and, innocently, stole the idea from me by giving it a new and more quotable name: “Sunset legislation.” What’s in a name? Damn near everything. I lost control of it, but took solace from Henry Adams, who observed, in his “Education of Henry Adams,” that you haven’t arrived as an author until you’ve been stolen from. I did occasionally receive some praise and more criticism, mainly from reformers of state legislation. I improved on it in the second edition of “The End of Liberalism” in 1979, Theodore Lowi and in fact adopted the “Sunset” label with a footnote of explanation as an essential part of my appeal for “juridical democracy” as ammunition for my chosen enemy: “interest-group liberalism.” Thanks to Common Cause, Sunset got a lot more attention, but, alas, with almost nothing of me in it. However, my frustration was not in the loss of my intellectual property. The frustration was that the idea lost substance as it became popular. The reformers concentrated on efficiency and short life – or, as the Ri p o n Fo r u m put it, to make government smarter and smaller. My purpose was not at all to reduce the government, but to make each law real law – juridically sound law, laws with legal integrity. Today we see it all over again, on a larger scale, with the last of the Bush administration and the beginning of the Obama administration. First, President Bush and the Democratic Congress granted the Secretary of the Treasury $800 billion for “bailouts,” as he saw fit. Then, President Obama and the Democratic Congress followed suit, with requests for still more money on top of the $800 billion and with no stipulation, no legislative guidelines – nothing but the designation of the Vice President as the overseer, coupled with the President’s assurance that, “No one messes around with Joe Biden!” How’s that for a government of laws? These guys aren’t socialists. They’re interest-group liberals. Unfortunately, interest-group liberalism thrives on bad legislative drafting. My antidote, then and now, has been revision by codification and clarification, guided by the wisdom of the 10 years of usage that revision is forced upon the agency as its statute confronts its demise. Interest-group liberalism, however, always wins because it has so many soldiers in the fight. The biggest enemies of good legislation are the law school professors, the rational choice philosophers, the relevant interest groups, the recent presidents, and the appellate courts. Law school professors and rational “choicers” thrive on “dispute resolution,” out of court and out of sight. In fact, bad legislation has created a whole new subdivision of law schools, with a highfalutin name: statutory interpretation. Interest groups thrive on bad legislation because bargaining always favors well- heeled, well-organized, highly specialized interests. Presidents also prefer bad laws; they see broad delegation (without need of signing statements) as the source of “presidential power,” when in fact it is the source of mass expectations, making every president a failure. (I wrote a whole book about this in 1985 called, “The Personal President – Power Invested, Promise Unfulfilled.”) And appellate courts accept bad legislation because they need a constitutional source if they intend to veto a statute when in fact (following Schechter and Panama) all a court needs is to say that the legislation is impossible to implement because Congress gave the Executive no guidelines. In sum, I remain a frustrated reformer. But I’m not a pessimist. I’m a disappointed optimist. RF

Theodore Lowi is the John L. Senior Professor of American Institutions at Cornell University. He is the author or co- author of 18 books.

RIPON FORUM Spring 2009 27 Name: Lisa A. Murkowski Hometown: Born in Ketchikan, AK; raised in Fairbanks, Anchorage and Southeast, AK; currently residing in Girdwood, AK. Occupation: United States Senator from the State of Alaska. Previous Jobs: Anchorage District Court attorney, 1987-89; Attorney, 1989-98; Alaska House of Representatives, 1998-2002; U.S. Senate, 2002-present. Individual who inspired me as a child: My earliest inspirations were the teachers in my life, starting with my grandmother who was a second grade teacher in Ketchikan. I have strong memories of all the teachers during my elementary school years. My first grade teacher, Mrs. Buness, made a huge impression on me and my love for learning. I didn’t realize it at the time but she was trained in the Montessori method. So we touched, smelled and tasted, engaging not only our minds but all of our senses. It was active and fun learning. Mrs. Buness made education come alive for me. Had I not studied law and served in elected office, I would have followed my dream to teach. Historical figures I would most like to meet: I’ve always loved stories about female aviators, such as Amelia Earhart and Beryl Markham, the great British female pilot. They were real aviation pioneers and their daring-do has always appealed to me. I would also love to have met the great explorers of the Arctic: Men such as Admiral Richard Byrd and Roald Amundsen as well as countless others who braved the challenges of Arctic exploration. I am fascinated by pioneers of last frontiers, and Alaska has lured many of them. Issues facing America that no one is talking about: Youth suicide is an area I have focused on as a member of the Senate Health Committee. Alaska’s youth suicide rate is three times higher than the national average. While it’s a very serious problem in my state, it’s not just an Alaskan issue. It’s a national crisis as well – especially in rural America and among our native populations. What’s fueling this crisis? Is it a disintegration of the family, a failure to inspire kids in school, the easy availability of alcohol and drugs? I suspect it’s a combination of many things. I don’t have the answers to this problem; perhaps more mental health professional intervention in our high schools and screening programs are good places to start. I do know that we just can’t leave struggling kids to deal with emotional crises alone. What the GOP must do to reclaim its congressional majority: The Republican Party needs to better reflect the diversity of our nation. We need to improve our outreach to women, Hispanics, African Americans and Native Americans. If people feel that we are the party of only a select constituency, we will remain in the minority. If they recognize that we’re the party that will help their small businesses to succeed, that cares about reducing costs for their family, whether for health care or energy or housing, then I think the GOP can regain the majority.

28 RIPON FORUM Spring 2009 Experience — Innovation — Insight

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