Authors: Eric Cantor;Paul Ryan;Kevin McCarthy
To be honest, I couldn’t blame the voters for cutting us off at the knees. The American economy was in free fall. Millions of Americans were losing their jobs. Businesses were struggling to keep the lights on, much less meet their payrolls. So far, Washington had responded with what the American people perceived as a big business bailout that put Wall Street before Main Street. Americans were worried about their economic security, and increasingly, they were convinced that the playing field wasn’t level. They had seen crooks like Bernie Madoff cheating investors. They had seen corporations like AIG take taxpayer funds and award their executives fat bonuses. They had seen their government in bed with big business, privatizing gains and socializing losses. And through it all, the only people who seemed to pay the bill for all of this were the hardworking Americans who didn’t have lobbying shops in Washington DC.
Before the 110th Congress had adjourned the year before, Republicans in the House had elected me to the
number two position in the Republican leadership: Republican whip. And from the time of Barack Obama’s victory at the polls, my colleagues and I in the leadership had stood ready to work with the new administration. The immediate situation facing our nation required serious leadership, and while we held out hope that the president-elect’s “post-partisan” rhetoric was indeed serious, we weren’t kidding ourselves. We knew we had serious areas of disagreement with the president-elect. We also knew that he faced a choice: would he, as promised, change the ways of Washington and make the tough decisions necessary to return America to long-term growth and fiscal sustainability? Or would he lead under the old liberal guise that massive spending binges equal meaningful reform?
There were signs—words, at any rate—that gave us some measure of hope in those early days. I remember vividly President-elect Obama declaring in December 2008, “What we don’t know yet is whether my administration and this next generation of leadership is going to be able to hew a new, more pragmatic approach that is less interested in whether we have big government or small government than in
whether we have a smart, effective government.
Smart and effective government is something I’m all for. I just happen to believe that the adjectives “smart” and “effective” when applied to the noun “government” require a third adjective: “small.” You don’t have to look any further than history—both American history and the history
of countries with more expansive government—to see that government that works is
For decades, Western European countries have followed a high tax, big entitlement, big government model that has left them with high levels of permanent unemployment and stagnant economies. In Europe, for every euro spent by businesses to employ a worker, an average of only 40 cents makes its way into the employee’s paycheck. The remaining 60 cents goes to the taxes that pay for the cradle-to-grave European nanny state. The economic crisis in Greece is the future of Europe. I could never understand why so many of my Democratic colleagues in the House seemed to think this was the path that our America should follow.
In these countries, democracy has been subverted by what columnist George Will calls the “dependency agenda.” The dependency agenda aims to make citizens so dependent on government that they support its expansion and resist its contraction. By making more and more people look to government for their health care, their retirement, and even their jobs, the party of the dependency agenda guarantees its continued success as long as it supports more and bigger government. In the countries that have adopted the dependency agenda, self-government has become virtually meaningless. The expansion of government becomes self-fulfilling. Anyone or any party who advocates cutting back on government and government spending is committing political suicide.
Historically, (thankfully!) America has resisted this
European model. For all its recent problems, the American economy doesn’t suffer the systemic problems that the European economies have. We don’t have chronic high levels of unemployment and, at least historically, our government spending hasn’t been so high that it crowds out spending and investment in the private sector. America is the land of promise, prosperity, and opportunity. But big government did not make it so.
Winston Churchill once said that, “Some see private enterprise as a predatory target to be shot, others as a cow to be milked, but few are those who see it as a sturdy horse pulling the wagon.” Count me among Churchill’s “few.”
Why have our small businesses, entrepreneurs, and workers been so motivated to work hard and innovate over the years? Because hard work in America was rewarded. Why have investors and job creators around the world gravitated to U.S. capital markets? Because America was a place where taxes and regulations fostered competitiveness, transparency, and accountability. Why have countries around the world made the U.S. dollar the world’s reserve currency? Because America was a rock of financial stability that pursued sound fiscal policies.
So as I sat in the cold January sun and listened to the new president’s inaugural speech, I wasn’t really sure what kind of president Barack Obama would be. And throughout the day as I talked to people who had come to the capital to be present at the inauguration, I knew I wasn’t alone. Everyone was proud that our country was inaugurating its
first African American president. But beyond that, many Americans I talked to in Washington that day didn’t seem to know much more about the man they had just made their leader. There was a celebratory atmosphere in the capital. But who exactly were we celebrating?
The answer came surprisingly quickly, in the battle over the American Recovery and Reinvestment Act, better known as the stimulus bill.
Our Republican congressional team had emerged from the November elections with virtually no power to control the legislative agenda. In the House, on January 3, 2009, our über minority began:
178 House Republicans (just 40 percent of the House’s total membership)
A 9-to-4 disadvantage on the Rules Committee, the body responsible for bringing bills to the floor and deciding what issues are debated
House Delegates or Resident Commissioners (of which there are 6, who, thanks to the Democratic majority, are now allowed to vote on amendments on the House floor)
In the Senate, Democrats had a strong majority, enough votes to guarantee passage of anything they wanted, provided they stuck together.
But despite our battered status, we knew our number one priority—regardless of which party we belonged to—was to do what we could do to help get Americans back to work and get the economy back on track. Unemployment was at a sixteen-year high of 7.2 percent. And the Congressional Budget Office was reporting that the annual deficit was on track to climb to its highest point since World War II, to $1.2 trillion or 8 percent of the nation’s entire economic output—and that
including taxpayers’ funds spent on the stimulus.
Politics can be tough, and no party is above seeking its advantage where it can. But the degree to which Americans were suffering under the recession was, for us House Republicans, our primary concern in January 2009. Rather than be an obstacle to action to get Americans back to work, we were determined to use the full force of our ideas to help the Democratic majority produce a better stimulus bill to help pull the country back from the economic abyss. There would be nothing we could do that would be more damaging to the country—as well as our prospects as a party—than to conform to the Democrats’ desperate attempts to portray us as the party of “no.” We knew we had a better way to get the economy going again, and we weren’t shy about sharing it.
A group of us—including Paul, Kevin, Rep. Peter Roskam
of Illinois, Rep. Jeb Hensarling of Texas, Rep. Dave Camp of Michigan, Rep. Shelley Moore Capito of West Virginia, Rep. Chris Lee of New York, Rep. Judy Biggert of Illinois, Rep. John Campbell of California, Rep. Tom Price of Georgia, and me—had been meeting for weeks in my conference room in the Capitol to develop a plan for job growth. We had three ironclad criteria for our alternative stimulus bill as well as any other bills designed to “rescue” the economy: they had to be limited in scope and spending; they had to focus on creating real, sustainable jobs; and they had to put small businesses first.
For me, the principles that guided me in trying to help fix the economy were the ones I had learned as a small businessman. Government doesn’t create jobs and build wealth; entrepreneurs, risk takers, and private businesses do. But throughout a series of meetings with Obama administration officials on the stimulus bill, it became clear that they didn’t share this belief. The president’s team were fervent believers in the economic theories of a British economist called John Maynard Keynes, whose theories were developed in the early-to-mid-twentieth century. Keynesian theory says that government can create jobs and spur economic development simply by spending—even spending money it doesn’t have. The idea is that government can be counted on to spend more wisely than the people. By taking more of the taxpayers’ money—or borrowing or simply printing more money—and then spending it as the government sees fit, jobs will be created and the economy will grow.
Or so the theory goes.
Paul, Kevin, and I rejected this approach. We believed then as we believe now: it is small businesses—driven to innovate, invest, and grow—that will regenerate the millions of sustainable jobs we so desperately need. Since every dollar government spends comes from the private sector via the taxpayers, our test of worthwhile public spending is this: will the return be greater if these funds are spent by the government or if they are left in the private sector to be spent and invested? In most cases, government spending fails this test, and the Democratic stimulus bill was no exception. We believed any bill designed to put Americans back to work needed to take bold steps to encourage work, investment, and business expansion, something that government spending under Keynesian economic theory too often fails to provide.
To put our belief to the test of a practical plan to achieve economic growth, our group, called the House Republican Economic Recovery Working Group,
held a series of exhaustive meetings. We reached out into the private sector and held hearings featuring former eBay Chief Executive Officer Meg Whitman and former Massachusetts governor and businessman Mitt Romney. We heard from dozens of small businessmen and -women. More than twenty members of Congress participated in our deliberations. And we took advantage of new technologies to reach as many participants
as possible. We used Facebook and YouTube to allow people to submit questions. And we put video of our proceedings online for what may just be the first YouTube series of congressional hearings.