In all likelihood Mitt Romney will win big today and follow up with a victory in the Nevada caucus on Saturday. Aside from securing wins in the other February states (Arizona, Colorado, Maine, Michigan, Minnesota, Missouri) what does he need to do before Super Tuesday, both to shore up his support within the Republican Party and lay the groundwork for the general election?
He would do well to develop two related but distinct themes: 1) capitalism is the engine of growth and prosperity; and, 2) he has an agenda to promote upward mobility.
The first is both a sword and a shield against President Obama. Romney is well situated to make the case that Obama has crippled the recovery and failed to understand the key elements that are needed for a robust private sector, namely a simplified tax code with reduced marginal rates, reduced public debt, modest regulation, sound money, free trade and a reliable legal system. Romney has a solid case to make that Obama’s notions that government can create wealth and that crony capitalism ( i.e. the interlocking relationship between Big Business and Big Government based on political access and favoritism) have failed.
Romney, in preparing his defense against the OWS/Gingrich/Obama attacks on Bain, needs to develop a quick and simple message: For capitalism you need capital, and private equity markets are an essential part of that capital-generation. He’ll need to fill out with more detail his claims on job creation and begin to present his own narrative — middle class jobs created at Staples, pension funds and foundations that have benefited from investment in Bain-related companies and the positive impact of “creative destruction”in a free market.
Equally, if not more, important for Romney is to develop a positive agenda that contrasts with Obama’s “fairness” — redistributive — agenda. Part of this involves offering affirmative policies to promote upward mobility and wealth creation for all Americans.
Kevin Williamson recently listed a number of these, including educational choice for K-12 schools, restraints on public university tuition costs and a redesign of entitlement programs (helping “the poor to build wealth across generations instead of consigning them to lifelong welfare dependency”).
Rep. Paul Ryan (R-Wis.) has also addressed this issue. He recently wrote in his response to the Congressional Budget Office report on inequality:
A prudent course of action for policymakers would be to advance sensible reforms to the unsustainable benefit structure of these programs so that government is giving less help to households that need it least. For Social Security, the Bowles-Simpson Commission on Fiscal Responsibility and Reform laid the groundwork by outlining reforms that would reduce the growth in benefits for higher-income workers. Contrary to false attacks, these reforms would not cut benefits; in fact, all benefits would continue to grow at least as fast as inflation. And, with the exception of high-income individuals, benefits would grow even faster than inflation. The Bowles-Simpson proposal would also modernize the special minimum benefit to ensure a higher benefit for the poorest seniors, thus helping to target Social Security benefits to those who most rely on the program.
For Medicare, the House-passed budget, The Path to Prosperity, proposed no changes for those 55 and older, but for future generations, it proposed a premium-support system that provides more help for the poor and the sick, and less help for the wealthy.
Ryan also makes the case that properly constructed tax reform can address mobility for those on the bottom and middle rungs of the economic ladder: “Reorienting the tax code with pro-growth incentives would not only increase economic growth and allow all Americans to share in a larger pie — it would also make the tax code more progressive, as income at the top end of the distribution that was formerly parked in tax shelters would go from being taxed at zero percent to being taxed at the top marginal rate.”
But Romney should also begin to formulate a comprehensive argument against Obama’s brand of “fairness,” explaining that equalizing outcomes by government mandate has been a losing proposition for countries that have tried it and for modest-income individuals who are impacted by the resulting low growth and diminished job prospects. That means forcefully explaining, as Robert J. Samuelson recently did, why gimmicks like the “Buffet tax” are built on false premises and miss the mark in promoting growth, opportunity and advancement for the less well off. Romney can contrast Obama’s vision, which features government bureaucrats at a giant bank of switches and levers, taking from one group and giving to another, with his own vision of a free market system (tempered by a safety net) that expands wealth and opportunity for all.
In fleshing out his views on capitalism and contrasting Obama’s fairness (actually “flattening”) schemes, Romney should, as he has hinted he would, push a tax reform plan that promotes wealth, simplifies the code, removes special giveaways for politically-connected industries and, nevertheless, is attuned to the plight of lower and middle income families. He has models to draw from including Ryan’s, Rick Santorum’s and the Simpson-Bowles plans. Romney should avoid the temptation to design a plan that will excite the Wall Street Journal editorial board, but lessen progressivity. He wants a pro-growth tax plan, but he also needs to balance that with political realities and pro-family values (e.g. keeping the charitable deduction and raising the child tax deduction). Supply-side purists will recoil in horror, but Romney need not become a martyr to the flat tax cause. His job is two-fold: to move the ball in the direction of pro-growth policies and to get elected.