Once the House passed a 90 percent tax on AIG bonuses, a mad rush was on in the Senate. Majority Leader Harry Reid went to the Senate floor to propose a quick vote on similar legislation. A single senator could object, delaying a vote for weeks. But fear of siding with reviled AIG executives prevailed, and no senator stepped forward–until Republican whip Jon Kyl finally did. “I don’t believe Congress should rush to pass yet another piece of hastily crafted legislation in this very toxic atmosphere,” he said. “Therefore, I object.” A vote was put off, the AIG furor abated, and the tax on bonuses is now probably dead.
That was easy. A nervy act by a single senator stopped the scramble to punish AIG. That was two weeks ago. Last week, the decision by Republican senator Arlen Specter to oppose card check legislation was similarly decisive. He relegated that bill, designed to let labor organizers form unions without a secret ballot vote by workers, to the unlikely-to-pass bin. Senate Republicans had worked diligently to produce unanimous opposition to card check. But again, the act of one Republican senator was crucial.
So much for easy victories. Republicans now face the most important test of their opposition to liberal legislation since they blocked President Clinton’s health care scheme–HillaryCare–in 1994. This time the task is far greater and the number of Republican senators is fewer (41 now, 44 then). And the only hope is the Senate. House Republicans, lacking the power to filibuster, can’t help.
The liberal onslaught comes in four parts: government-run health care, a cap-and-trade carbon tax, a vast array of personal and business tax increases, and government authority to seize financial institutions in addition to banks. This is the liberal dream agenda. If passed, it would do what conservatives fear most. It would make America more like Europe, with growing nanny statism and more reliance on government, considerably less on individuals. Let’s look at the four.
Health care. President Obama is fond of saying his plan allows people to choose between the health insurance they get through their employer and a government program currently limited to federal workers. Sounds wonderful, doesn’t it? It’s not. Rather, it’s the path to a single-payer health care system–the kind Obama has said he prefers but isn’t actually proposing.
His program would have the distinct advantage of not having to make a profit. So it would always be able to offer greater benefits at lower cost (with taxpayers taking up the slack when it lost money). Businesses would have an incentive to increase co-pays and trim benefits and, in effect, encourage employees to switch plans. And if employer-paid benefits are taxed, as administration officials have suggested, the incentive steering workers to the government program will be irresistible.
“There won’t be any private sector [in health insurance],” Senate Republican leader Mitch McConnell says, should government-financed insurance be available to everyone. “It’s a fast track to single payer.” There’s an additional fear. The stimulus bill set aside $1.1 billion to research and compare medical treatments and drugs, raising the prospect that government programs would pay for some treatments and medicines but not others and thus open the door to rationing.
Can ObamaCare be blocked? Republicans may threaten a filibuster and force a compromise. But the odds worsen if Democrats use a procedure known as reconciliation to bar a Republican filibuster and require only 50 votes, plus Vice President Biden’s, to pass the health care bill. In that case, Republicans would need to recruit at least 10 Democrats, a tall order.
Reconciliation, normally invoked on tax and spending issues, would turn the Senate into a war zone. Republicans would feel free to exploit any parliamentary tactic at their disposal to delay or impede the legislation, tying up the Senate for weeks, perhaps months.
Cap and trade. Here, too, Democrats may use reconciliation to win Senate approval of a measure that would set a national cap on carbon emissions, then auction off emission rights to companies. Obama’s goal is twofold, reducing emissions and raising money. His 10-year budget says roughly $650 billion would be collected in fees, but a White House official told Capitol Hill staffers that two or three times that amount might be raised.
During last year’s campaign, Obama said cap and trade would cause energy prices to “skyrocket.” Indeed it would, while choking the economy and reducing our standard of living. Republicans are “pretty solidly” against cap and trade, Kyl says. So are a dozen or so Democrats in carbon-dependent states. But Obama may attract them with his promise last week to “take into account regional differences” and prevent “huge spikes in electricity prices.” Republicans have their hands full on this issue.
Taxes. Obama wants to increase taxes on everyone–individuals, entrepreneurs, businesses–who is usually associated with a growing economy. It doesn’t make sense from an economic standpoint, but he wants the money. So tax rates will rise on upper middle class and rich Americans, on capital gains and dividends, on companies that make profits in foreign countries, and the list goes on. Deductions will be slashed. Sad to say, many of these tax hikes poll well. They’ll be hard to stop under reconciliation. Meanwhile, the new administration is searching for fresh ways to raise revenue.
Takeover authority. Obama complained in his prime time press conference that “the AIG situation has gotten worse” because he didn’t have the authority to seize control of financial institutions that are “too big to fail” and pose “systemic risks” for the entire economy. This is nonsense. He didn’t need such far-reaching authority. Letting AIG go bankrupt, instead of bailing it out, would have allowed a judge to do exactly the things Obama said he couldn’t. What things? Press Secretary Robert Gibbs said they include cutting CEO pay and installing new business models.
Republicans have a good shot at blocking this authority, particularly because officials in the Bush and Obama administrations have done a poor job with the authority they already possess. Giving them the right to declare a “systemic risk” is too risky.
Republicans face their own risk in opposing the Obama agenda, though oppose it they must. Democrats will scream they’re “the party of no.” The media will urge them to compromise even when Obama offers nothing in return. They’ll be tormented by liberal interest groups. Polls may turn against them.
But they’re obligated, as conservatives or moderates, to combat a program–Obama’s–that would change America, and not for the better. The tax increases could be shaved back later, but a new health care system financed by carbon fees could not. Nor would the authority to grab financial institutions be easy to uproot. The time to resist Obama, forcefully and unapologetically, has come. It won’t be easy.
Fred Barnes is executive editor of THE WEEKLY STANDARD.
