Five Things Conservatives SHOULD Be Talking About at CPAC 2015

Regulation:

One need not be a member of a Jewish or a Christian faith to be familiar with the Ten Commandments. According to scripture, Moses descended from Mount Sinai with two stone tablets that were given to him by God. Inscribed on them were God’s rules for man. Ten was good enough for God. In 2013 alone, the federal government handed down 3,659.

Just like the annual budget deficits lead to a growing national debt, the thousands of federal regulations being passed each year are compounding into something so large that it is bordering on unintelligible to the human mind. Our best scientists likely have a better understanding of the workings of the entire universe than our lawyers, politicians, and bureaucrats have of the entire code of federal regulation.

It is hard to get an exact figure on how many unique rules and regulations there are in a document that size. However, a recent effort by the Mercatus Center at George Mason University estimates that at the end of 2012, the Code of Federal Regulations contained at least 1,040,940 different restrictions.

Most of these regulations are extremely minute and overly strict. Millions of these regulations are insulting to business owners with the skills and intellect to create jobs and drive our economy. They also directly impede economic growth. Estimates suggest that the combined economic impact of all federal regulations is on the order of nearly $1.9 trillion annually.

Thus, if we’re going to restart the American economic engine, the sludge of excessive regulation must first be cleaned out.

Jobs:

Americans continue to put jobs/unemployment at the top of their priorities list for Washington. They see what the data obscures. They see more and more young adults living at home because of student loan debt. They see friends and relatives that have simply given up. The falling unemployment rate is giving off a false positive.

Historically a shrinking unemployment rate signals a strengthening labor market. However the current situation, with the labor force participation rate falling in conjunction, only shows a labor market in a drought of opportunity for younger workers without advanced levels of education.

Energy:

The Sixth Amendment to the Constitution guarantees a number of rights for those accused of a crime when it comes to the terms of their trial. One of the guarantees, among the right of the trial to be public, before a jury of peers and with the assistance of legal counsel, is the explicit right to a “speedy” trial. Judicial precedent explains that a speedy trial is “an important safeguard to prevent undue and oppressive incarceration prior to trial”.

Like the rest of the Bill of Rights, this provision is to prevent powers in government from stifling freedom in pursuit of their own agenda. Thus the Constitution grants the right of a speedy trial even to those accused of the most heinous crimes imaginable. Yet, of late, it seems that this principle of expeditious due process of law has been lost on the Obama administration, especially when it comes to the government’s dealings with perfectly lawful actors in the energy industry. Federal law requires that most of the more crucial activities in the energy resource production and trade industry receive the blessings of the government before they commence. Examples are things like oil and gas drilling permits and leases for federal lands and export licenses for liquefied natural gas (LNG).

Requiring some initial level of oversight and review of these projects makes sense given the inherent dangers. This is an appropriate function of government. What is not appropriate, nor makes sense, is how long various permitting processes are taking under the Obama administration. The most publicized example of this is the on going indecision on the Keystone XL oil pipeline. President Obama just recently vetoed Congressional action to get the project moving forward. However, Keystone is just the tip of the iceberg of this broader problem that the Republican Congress must address.

Deficits:

According to the White House Office of Management and Budget (OMB) the total national debt is projected to hit a staggering $18.7 trillion by the end of 2015.  This growing debt liability is a major problem for the simple reason that it must, somehow, be paid back. Not paying this money back is not an option, as it would have the impact of a worldwide bank robbery to the tune of dozens of trillions of dollars. Further, it would make it virtually impossible for the US government to ever borrow money again, at least at an affordable rate, to pay for unexpected emergency spending in the event of things like war, natural disasters, or terrorist attacks. However, we’ve come to a point where additional borrowing poses a substantial risk as well.

The simple truth is that the current path is still totally unsustainable. While some like to point out that under President Obama deficits have been “cut in half”, they conveniently omit the fact that the deficit has been cut from record levels that the Obama administration itself set. Additionally, cutting deficits does not reduce debt; it simply slows the growth of debt. Surpluses are required to reduce debt and, according to OMB projections, deficits never become surpluses under current law. In fact, deficits remain above $400 billion annually before resuming growth to above $500 billion in 2019 and beyond.

Taxation:

The combined state and federal corporate tax rate in the United States is nearly 40 percent, the highest in the industrialized world. The corporate tax must be either eliminated or at least lowered to below the OECD average of 25.5 percent for the United States to keep pace with the rest of the world’s developed economies.

The corporate tax code is inefficient, as it is changing the behavior of actors in the economy, demonstrated by companies pursuing inversions and shielding assets as well as by individuals refusing to begin new businesses they otherwise would have created. Also, the corporate tax is inherently unfair. The only way to escape the corporate tax is to have the ability to pursue favorable tax treatment by way of lobbying and exploitation of tax expenditures. Or businesses must have the means to move overseas in order to level the playing field with their international competitors. Small firms don’t have the resources to pursue these options and thus are crushed by their larger competitors who do. Even eliminating the expenditures and loopholes wouldn’t stop the problem of businesses leaving and also not beginning in the first place.

Reducing, or even perhaps eliminating, the corporate tax rate is the only way to stop the flow of jobs, talent, and capital overseas and to fertilize the soil for new businesses immediately. The corporate tax also presents itself as perfect candidate for a large reduction or elimination because it is a deceitful policy. Corporations don’t pay taxes; people do through higher prices and lower pay. Running these taxes through the middleman of corporations disguises much of the total federal tax burden from taxpayers. This veil must be lifted if the nation is to have an honest conversation about broader tax reform in the future.

Read more of what Conservatives should be focused on here in our publication Blueprint for 2015.