OPINION:
Whom will House Republicans choose as their next speaker? Will that speaker demand meaningful debt reduction as a condition of raising the debt limit? These imminent decisions are ineluctably intertwined.
Absent meaningful debt reduction, our republic is headed over a fiscal cliff that will make Thelma and Louise’s suicide plunge into the Grand Canyon look like a soft landing. It is, therefore, imperative that America’s next House speaker has both the brains and backbone to roll back our country’s fiscal crisis.
I’m not sanguine about the likelihood of success. Fully 210 of 218 House Republicans voted to keep a speaker who had openly collaborated with House Democrats and RINO senators to pass a gaggle of “Bidenomics” spending bills. This uniparty fiscal orgy has ignited virulent inflation, triggered a wage-price spiral, and resulted in the most rapid rise in interest and mortgage rates in decades.
With no small irony, the eight House Republicans who stood in the fiscal breach have been branded as extremists simply for pointing out what every American outside the House and Senate chambers knows: Our fiscal position is untenable.
Today, our public debt stands at $33 trillion, and America’s ratio of debt to gross domestic product, which measures the ability of our economy to both provide public goods and services and still service the debt, is well north of 120%.
Global financial markets scream danger when any country hits a debt-to-GDP ratio above 70%. Yet the Congressional Budget Office projects America’s debt-to-GDP ratio will rise to nearly 200% by 2053.
As this debt-to-GDP ratio climbs, more tax revenue will go not to pay for our roads and bridges and education and national defense but simply to service the debt, much of which is held by China.
In this Alice in Bidenomics world, forget about the dollar being the reserve currency of the world. Forget about single-digit mortgage rates. Forget about rising real wages. Forget about having the capabilities to defend this nation against increasingly aggressive enemies including China, Russia, Iran, North Korea, and a lethal diaspora of stateless Islamic extremists.
Of course, on the way to hurtling over this fiscal cliff, there will be repeated partisan fights in Congress over whether to raise taxes or cut spending. Resulting stalemates will, in turn, force the Treasury and Federal Reserve to option three: Simply print more money to accommodate the debt, thereby creating hyperinflation.
In my White House years, I repeatedly dealt with House and Senate Republicans. Nothing in that experience suggests any “come to fiscal Jesus” moment whereby Republicans will unite around using the debt limit deadline as the last remaining lever to get meaningful debt reduction.
Yet I also learned that if House Republicans are to agree on anything, they will need a concrete proposal to coalesce around. One such three-pronged proposal may be gleaned from the fine work of Russ Vought, former director of the Office of Management and Budget under former President Donald Trump.
Prong 1 claws back future spending streams from the profligate Bidenomics budget, which has baked more than $1 trillion a year of added debt into our annual budget. For starters, House Republicans must insist on the elimination of all projects in the so-called infrastructure bill that aren’t infrastructure at all. That’s well over half of what’s funded in the bill.
House Republicans must also insist on a rollback of the Bidenomics electric vehicle mandate — which Mr. Trump has promised to do if elected president in 2024. This mandate will neither sustainably boost the U.S. economy nor clean our air on the net. It will simply offshore electric vehicle production to the sweatshops and pollution havens of China while destroying the U.S. auto industry.
Prong 2 is based on the well-known Trumpian economic principle that the best way to balance the budget is to increase real economic growth and thereby tax revenue. This can be done only through structural adjustments that will reduce the rate of inflation and thereby reduce interest rates, which are starting to strangle the U.S. economy.
At the top of this structural reform list is a return to strategic energy dominance through a “drill, baby, drill” reexpansion of oil leasing and pipelines curtailed by Bidenomics. Remember here that as oil prices have risen in President Biden’s Green New World to levels some 50% higher than observed under Mr. Trump, food prices have also skyrocketed — petroleum is a key ingredient of fertilizer and a key transportation cost for the food production and transportation supply chains.
Prong 3 involves comprehensive entitlement and welfare reforms coupled with razor-sharp cuts in the “woke” programs and personnel of our bureaucracy: the Department of Health and Human Services, the Department of Education and the Environmental Agency, and the not just “woke” but weaponized Department of Justice, IRS and FBI.
At least $7 trillion in savings is available in this prong alone without cutbacks to Social Security or Medicare.
Whichever candidate for speaker can best implement this three-pronged approach should be the one House Republicans elect. The best choice — but least likely to be chosen — is any one of the eight principled Republicans who opposed Kevin McCarthy, including Matt Gaetz, who is emerging as the Newt Gingrich of our times.
With Steve Scalise in the running but too close to the old McCarthy guard, the default option may be Jim Jordan, who has Mr. Trump’s support. For this to work, however, Brother Jim needs to channel the combative Mr. Jordan of old, with whom I loved to banter with when traveling on Air Force One. That was a true warrior, but the last time I saw the face of the old Jim Jordan was in 2021 on a milk carton.
• Peter Navarro served as White House manufacturing czar and chief China strategist. Follow him at http://peternavarro.substack.com.
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