Boehner’s Pro-Growth Message: Is a Mighty Stock Rally Next?
It’s a bit too early for House Republican leader John Boehner to measure the drapes and pick out new wallpaper. But the Intrade pay-to-play prediction markets are now showing a 76 percent chance of a GOP House takeover in November, along with a 60 percent probability that Republicans will capture at least seven new Senate seats.
So Boehner’s lengthy broadside attack on Obamanomics at the City Club of Cleveland this week takes on special meaning. Headlines following the speech were all about Boehner’s call for the resignation of Obama policy generals Larry Summers and Timothy Geithner. But the more substantive question is this: What might a newly ascendant congressional Republican majority actually stand for?
Republican leaders are expected to publish a governing agenda next month, probably an updated version of the bold and successful Newt Gingrich/Dick Armey “Contract with America” of 1994. John Boehner is a key alumnus of that effort. But folks around the country are waiting to see if congressional Republicans will make a strong and aggressive case for a true economic-growth and jobs agenda now, in 2010.
The stock market, for example, has known for months that the GOP will capture the House. But investors are not yet confident that the GOP will focus on GDP, instead of mere ambiguous generalities, trying to be all things to all people. Indeed, if the Republicans borrow heavily from the tea-party “Contract from America” -- and its call for constitutional limits to government, tough spending restraint, free-market reforms, and supply-side tax policies -- stocks could mount a mighty rally in the weeks ahead.
Well, Mr. Boehner’s speech was a very promising beginning to all this.
Near the top he said, “Right now, America’s employers are afraid to invest in an economy stalled by ‘stimulus’ spending and hamstrung by uncertainty. The prospect of higher taxes, stricter rules, and more regulations has employers sitting on their hands.”
His first proposal to break that uncertainty? Boehner said, “President Obama should announce he will not carry out his plan to impose job-killing tax hikes on families and small businesses.” In other words, extend all the Bush tax cuts. To this end, Boehner quoted former President John F. Kennedy: “An economy constrained by high tax rates will never produce enough revenue to balance the budget, just as it will never create enough jobs.”
And Boehner was just getting started.
He called for an Obama pledge to veto any lame-duck congressional actions that would damage the economy, including the union card-check bill and a national cap-and-trade energy tax.
He called for the repeal of Obamacare’s job-killing 1099 mandate that would require small-business paperwork to show any purchases of more than $600.
He slammed Obamacare in general, noting the creation of more than 160 boards, bureaucracies, programs, and commissions, and the 3,833 pages of new regulations already in place.
He called for an aggressive spending-reduction package that would rollback non-defense discretionary expenditures to 2008 levels, before the stimulus plan was put in place.
He said he wants to end TARP and all TARP bailouts.
He bemoaned the fact that no one in the White House has any business experience, chiding Obama by saying, “We’ve tried 19 months of government-as-community-organizer. It hasn’t worked. Our fresh start needs to begin now.”
He called for a freeze on federal pay and hiring. He noted that, on average, federal employees now make more than double what private-sector workers take in.
He cited Wisconsin congressman Paul Ryan’s plan for $1.3 trillion in specific spending cuts. He called for strict budget caps. And he argued for pro-growth tax reform that would get rid of “the undergrowth of deductions, credits, and special carve-outs in order to bring simplicity and certainty, instead of transfer payments to the favored few.”
And he spotlighted the fiscal restraint of governors Bob McConnell of Virginia and Chris Christie of New Jersey, elected Republican officials who balanced their budgets by throttling spending instead of raising taxes.
All this is good. Very good.
Instead of playing it safe, it looks like Republicans intend to be aggressive in changing the statist, government-planning, socialist-lite agenda of President Obama, Majority Leader Harry Reid, and House Speaker Nancy Pelosi. It sounds like the new Republican party intends to end the ongoing war against private-capital investment, entrepreneurial rewards, free-market incentives, and private business that is plaguing the economy and sapping the strength of the recovery.
In a little over two months, the election will take place. In a little over four months, the 2003 tax cuts will expire. And in just a few weeks, congressional Republicans will presumably put more meat on the bones of their new platform. John Boehner’s Cleveland speech was a very encouraging beginning. Now let’s see if the Republican’s next step will truly provide some much needed optimism to the economy and body politic.
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