Lessons from the 1995 Strategy

Published November 25, 2014

The Weekly Standard

The Republican victory in the midterm election was decisive. Now the victors must chart a sensible course for the next two years—one that demonstrates they can be trusted as America’s governing party and sets the table for 2016.

The landscape is more treacherous than it looks. The Republican majority is strong in the House but surprisingly thin in the Senate. Even with 54 Republican senators (if Rep. Bill Cassidy is victorious in his runoff against Mary Landrieu in Louisiana), there will be precious little room for maneuver, as a few defections on any given vote would give Democrats the upper hand. Moreover, Democrats are sure to hold together at least 41 senators, and probably more, on critical votes. That gives them the power to filibuster most legislation pushed by Republicans, which can only be overcome with a supermajority of 60 votes. Then there is the problem of the presidential veto. If Republicans somehow manage to get a piece of legislation through both chambers, the president can still kill it. Rounding up enough votes for a congressional override under these circumstances would be the longest of long shots.

At the same time, there is much pent-up frustration among conservatives that is already turning into high expectations for the incoming Congress. The GOP’s core supporters have watched with increasing dismay and alarm as the president has implemented his agenda, often with arguably unlawful executive actions, and they will expect a Republican Congress to put a stop to it. Complaints about the limited power of one branch of government are unlikely to go over well.

So a Republican Congress will have to balance the need to make tangible progress in rolling back the Obama agenda against the very real obstacles it will face in trying to achieve that goal.

To navigate this difficult terrain, it will be important for Republicans to clearly set expectations and articulate their goals at the outset. The first temptation for the new Congress will be to follow the 1995 road map. After the Republican sweep of 1994, the House spent the first months of 1995 passing the legislative provisions of the Contract With America. Although important symbolically, these bills were not consequential in terms of reforming government. The real work in early 1995 was taking place behind the scenes, as House speaker Newt Gingrich, House Budget Committee chairman John Kasich, and the key committee chairmen plotted out a balanced budget plan that incorporated just about every feature of a conservative vision for governance: tax cuts and reforms; major changes in entitlement programs; welfare reform; elimination of scores of programs and agencies; and significant spending reductions.

The idea was to lay out a comprehensive agenda that contrasted sharply with the plans of President Bill Clinton, precipitate a confrontation of some sort, and then use the power of public opinion to force the president to accept a substantial part of the Republicans’ program. It was also important that the budget process, and especially budget reconciliation, allowed this plan to move forward in the Senate without any supportive votes from Democrats.

The 1995 strategy did not work as planned, to put it mildly. It took nearly a year for the Republican leadership to draft and pass its agenda. During that time, very little else was considered in Congress, as the entire GOP agenda was wrapped up in the budget process. Democrats spent the year regrouping and attacking the politically weak points of the Republican approach. In the confrontations with the Clinton administration that ensued, it was the Republican Congress, not the president, that suffered the most in public opinion. President Clinton’s standing with voters improved dramatically as the confrontation dragged on into 1996, and he won reelection handily over Sen. Bob Dole.

In the end, Republicans did secure enactment of welfare reform in 1996—a major achievement. But little else from the 1995 reconciliation effort made it into law, save for the creation of child tax credits.

In 2015, Republicans should resist the temptation to pursue a 1995-style maximalist agenda, which would very likely squander valuable time and ultimately put the party in a worse position heading into the critical election of 2016.

A better approach would be to start with politically sensible first steps, and build from there. At the beginning of the year, Republicans should identify straightforward legislation that is targeted, understandable, achieves an important objective, and is a clear political winner. The prototype is legislation repealing the employer mandate in Obamacare. Democrats included this mandate in Obamacare out of an anticorporate, populist impulse. But now, even many liberals are realizing that imposing new costs for “full-time” employees (those working at least 30 hours per week) is a recipe for fewer jobs and lower pay. Bringing up repeal of the employer mandate for a vote early in 2015 in both the House and the Senate would put Democrats and the administration on the defensive. In fact, such legislation would likely garner some bipartisan support. And if it were ultimately filibustered by Senate Democrats, Republicans would benefit from forcing the issue and holding the Democrats accountable for blocking it. Other candidates for early action include rolling back costly and ineffective regulations, restoring fast-track trade authority, authorizing (again) the Keystone XL pipeline, and allowing Americans to reenroll in the insurance plans canceled by Obamacare.

Rather quickly after scoring some legislative victories, however, Republicans in Congress will need to lay out a plan for passing a budget. Virtually all Republicans have called for a balanced budget, so a GOP-led Congress will need to pass a plan that reaches fiscal balance within the next decade. And that plan will need to be built on a foundation of broad-based tax and entitlement reform. Those are the pillars of conservative governance.

But a distinction needs to be made that wasn’t in 1995. It is possible for a Republican Congress to lay out a vision for governing in a budget plan and not proceed to consider all of the component parts in actual legislation. The budget plan will be considered in the form of a budget resolution, which does not get sent to the president for approval. Consequently, the House and Senate can write a general budget plan, and it cannot be vetoed. In 1995, Republicans followed up the budget resolution with implementing legislation—called a reconciliation bill. Reconciliation bills are critically important legislative vehicles because they cannot be filibustered in the Senate and thus can pass with a simple majority vote. The 1995 reconciliation bill became the centerpiece of the GOP’s agenda, and the main target for Democratic attacks.

It does not have to be that way in 2015. Among other things, the Republican budget plan could assume structural reform of the Medicare program, along with other entitlement reforms, but there’s no reason these changes have to be taken up and passed as part of a reconciliation bill. The president would engage in his usual demagogic attacks, and the issue would become highly politicized again. It is very likely that the Republican nominee in 2016 will embrace at least the concept of structural entitlement reform, and so it would be better to allow the debate to occur during the presidential campaign—without the baggage of a specific proposal considered in Congress serving as an easy target for Democrats.

Republicans instead should use the reconciliation process to advance targeted budgetary items that constitute fiscal progress, but also pose more political risks for Democrats than Republicans. For instance, reconciliation could be used to make targeted changes to Obamacare that lay the foundation for repeal and replacement of the law. Among other things, excessive subsidies for insurers could be eliminated, the tax on going uninsured rolled back or eliminated, the Independ-ent Payment Advisory Board (IPAB) repealed, and states could be freed to pursue creative reforms without the need of a waiver from the Department of Health and Human Services. All of these changes unite Republicans and divide Democrats.

It will be particularly important for a Republican Congress to approach Obamacare rationally. It will not be possible to repeal and replace Obamacare without a Republican president. Moreover, moving a full repeal bill without an accompanying replacement plan is politically risky for the GOP. The public is not interested in returning to the pre-Obamacare status quo, which was flawed. But repeal without a clear replacement plan implies returning to just that, in addition to removing insurance protection from several million people now on Medicaid or enrolled in insurance plans offered on the Obama-care exchanges.

It will be far more effective for Republicans to use the reconciliation process to begin rolling back Obamacare as much as possible and to enact aspects of a replacement plan that have broad support, such as enabling the cross-state purchase of health insurance or giving states greater freedom to fashion creative health care solutions that lower costs and expand coverage.

Beyond their efforts on the budget and Obamacare, Republicans should also use the next two years to demonstrate their depth in policy areas that traditionally haven’t been the focus of the party’s attention. That includes passing legislation to make higher education more accessible and affordable, enhancing choice in K-12 education, particularly for kids in failing schools, and reforming the federal government’s approach to antipoverty programs. The impending exhaustion of the Social Security Disability Insurance Trust Fund in 2016 presents another opportunity for Republicans to advance systemic reforms that will benefit the party’s nominee in the upcoming presidential election.

These legislative initiatives are not a substitute for action on the core economic concerns of middle-income Americans, particularly job growth. That must remain the top focus for Republicans going into 2016. But a robust agenda that addresses other top concerns of middle-class families will go a long way toward convincing voters that Republicans can govern effectively and with an eye toward helping working families improve their standing.

Republicans won a resounding victory in the midterm election in November 2014, but that was just the beginning of their work. To be trusted with control of the White House in 2017, Republicans will need to demonstrate that they have the strategic vision, tactical skill, and ability to execute on a coherent agenda between now and the next presidential election, which is less than two years away.

James C. Capretta is a visiting fellow at the American Enterprise Institute and a senior fellow at the Ethics and Public Policy Center. Lanhee J. Chen is the David and Diane Steffy research fellow at the Hoover Institution and served as the policy director on the Romney-Ryan 2012 campaign.

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