In Grand New Party: Republicans Can Win the Working Class and Save the American Dream (Doubleday, 2008), authors Ross Douthat and Reihan Salam lay out a long-term program for Republican renewal. Since the Washington cliché, "the devil's in the details," has a lot of truth to it, Douthat answered some questions about details.
Q: You want the GOP to push for tax code simplification that reduces taxes on investments and hugely expands tax credits for children. Let's have some details.
Our plan is shamelessly stolen from Ramesh Ponnuru, a senior editor at National Review, who's been proposing something along these lines for some time now. The basic idea is to keep taxes lowest on investments of all kinds-and to treat raising children, arguably the biggest and most expensive investment in the American future a family can make, as akin to starting a business or investing in a company.
Q: Specifically . . .
We propose a tax reform that would raise the per-child tax credit to $5,000 a year and make it refundable against payroll taxes-currently the biggest tax many working-class families pay-as well as income taxes. Under Ponnuru's plan, this credit would be coupled with a broader revenue-neutral simplification of the tax code that would also lower taxes on business and investment. The winners under the plan would be families with kids and entrepreneurs; the losers would be affluent, childless Blue-Staters. It's cynical politics, in a sense-but for a family-friendly, business-friendly party, it's good policy.
Q: Isn't our tax system biased against mothers who spend many years caring for children in their homes? What do you propose for them?
The tax code provides a break for parents who work and spend money on daycare, but doesn't provide a similar break for parents who take care of their kids themselves. We'd prefer to do away with the day-care tax break entirely and simply roll that money into the expanded per-child tax credit, but we also think there should be more options available in general for women (or men!) who want to move in and out of the workforce when their kids are young. Let's offer tuition credits to parents who've spent time at home with their kids, to allow them to get vocational or post-graduate education that smoothes their path back into the workforce.
Q: You praise the welfare reform of 1996 that reduced welfare rolls and increased employment rates but you propose a new program of wage subsidies that you say will work better than either Earned Income Tax Credits or more boosts to the minimum wage. How would your proposal work?
At the moment, working-class wages are inflated indirectly-by the EITC, which offers a tax credit that you can collect at the end of the working year (and that many workers don't even know they're eligible for), and by minimum-wage regulations, which force employers to pay their workers a certain wage. It would be better to subsidize wages at the bottom of the income ladder, and reduce the subsidy to zero as workers move up the income ladder. Rather than making corporations like Wal-Mart the enemy, as liberals do, and simply demand that they sacrifice their competitive advantage to hike their employees' pay, wage subsidies would let government and business be partners in the laudable goal of moving low-income men, especially, into the mainstream economy.
Q: You want thousands of new police officers on the streets, and you say that reducing crime is just one of the benefits that would result.
Conservatives have taken a get-more-punitive, build-more-prisons approach to fighting crime for the past three decades-and it's worked. Crime has fallen even as the incarceration rate has gone up and up. But we're reaching a point of diminishing returns: The prison system is too costly, the moral costs of imprisoning so many young men-especially young black men-are rising, and the crime rate is inching upward. A lot of religious conservatives have taken up the cause of prison reform, but you can't have prison reform without a new strategy to keep crime low in an environment of less-punitive sentencing. One of the most successful anti-crime measures of the 1990s was simply putting more policemen on the beat, and it's a place where there are still enormous gains to be made.
Q: You're favorably disposed to homeschooling and distance education, but you want to see parents who are good teachers using their skills with not only their own children. What kinds of large-scale cooperative networks do you see developing, and how will they radically change education?
The traditional brick-and-mortar campus-whether for an elementary school, a high school, or a college-will become less and less important. Home-schooling families will network with one another. They'll pool parental expertise across families and disciplines and have access to resources (videos of great teachers lecturing on their subjects, for instance) that most public high schools can't dream of offering at the moment. Distance higher education-taking courses and obtaining degrees over the internet-will probably become the norm for more and more Americans, especially those who currently attend community colleges or vocational schools, and who are trying to juggle employment and education.
Q: You propose an immigration compromise.
Instead of doing immigration reform "comprehensively," we should do enforcement now and some form of amnesty later, once the current rate of illegal immigration has been dramatically slowed. We need to regularize the status of the illegal immigrants who are here and unlikely to go home, but the federal government has no credibility on border enforcement until it can prove that amnesty won't just provide a spur for ever-larger waves of migration. Most Americans are pro-border security and pro-immigrant.
Q: You're generally positive toward President Bush. What did he do right?
He was right that the GOP needed a domestic-policy agenda that emphasized reforming government and reducing the demand for government services, rather than simply abolishing programs outright. He was right that Republicans needed to be able to talk persuasively about traditionally Democratic issues like health care and education. He was right to treat religious conservatives as an integral part of the right-of-center coalition, rather than an embarrassing sideshow. And he was right to pursue Hispanic and even African-American votes, out of a recognition that the GOP was in danger of becoming a purely regional party-the party of white Southerners, and not much else.
Q: Where did he go wrong?
There was always a strain of anti-intellectualism running through the Bush administration, which undercut Bush's policy agenda. And after 9/11, he seemed to lose interest in domestic policy entirely (understandably!), and the result was drift and corruption, as a series of bad bills (especially on energy and transportation) and bad actors (from Tom DeLay to Jack Abramoff) came to define the GOP agenda, and the biggest issues facing middle America, from rising health-care costs to growing socioeconomic immobility, went unaddressed. The Bush administration's push for Social Security reform was a disaster. Their proposals weren't bad as policy, but they massively misjudged the political climate, and Bush squandered all of his second-term capital on a reform that never even came up for a vote.
Q: What's the likelihood of the GOP adopting your proposals? Which is the most likely to gain acceptance and which the least likely?
Family-friendly tax reform is something you could very easily see Republican politicians adopting over the next few election cycles. Our anti-poverty proposals are probably the least likely to be adopted-both because a program of wage subsidies would be more expensive than the current budget picture would allow, and because most of the beneficiaries aren't Republican voters (at least not yet!), which reduces the political incentive for the GOP to get serious about the issue, and about poverty in general.