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Washington Examiner


What Election 2012 Means for America: Three Manhattan Institute Scholars Weigh In On the Next Four Years

November 09, 2012

By Diana Furchtgott-Roth, Nicole Gelinas, Paul Howard

Three Manhattan Institute scholars weigh in on the next four years.

A tax fight is coming

Republicans ran on lower taxes and less government spending. House Speaker John Boehner, who lost only a few seats despite President Obama’s victory, said yesterday that "there is no mandate for a tax increase." But some are suggesting that Republicans must agree to higher taxes.

The House would not pass tax increases over the past four years and is unlikely to pass them now. Any legislation to avoid the "fiscal cliff" has to pass the House, where Republicans still hold the trump card.

The Bush tax cuts expire on Jan. 1. If the president and Congress do nothing, taxes will rise.

Tax rate increases would reduce gross domestic product growth below its current 2 percent rate. Alternatively, the Bush tax cuts could be extended, or revenue could be raised by lowering tax rates, reforming entitlements and cutting spending.

Will Obama continue pursue a tax increase that cannot pass the House, or engage Congress for enactment of a solution that can pass both chambers?

- Diana Furchtgott-Roth

Opportunity in Obamacare’s details

What do we want from government? What can government afford to provide without wrecking the private economy that sustains our collective choices?

Americans want a strong safety net for the elderly and the poor. But the economy cannot sustain Medicare and Medicaid as they are currently structured. There are simply not enough "rich people" to tax to pay for existing commitments, let alone trillions in new spending under Obamacare.

Where should we look for solutions to our most pressing fiscal problems? The states are best able to lay the groundwork for national, bipartisan reforms.

Thirty GOP governors should press the Department of Health and Human Services for greater flexibility so states can offer better health to Medicaid recipients at lower cost. Obamacare’s state and federal health insurance exchanges are not yet ready for prime time. Governors should use their leverage to press for flexibility on regulations, essential benefits and other features that drive up costs for individuals and small businesses.

In Congress, conservatives must put forward a detailed, pro-growth agenda that increases our ability to compete in the global marketplace. This should start with corporate tax reform, but policymakers should also repeal Obamacare provisions that threaten America’s advantages in medical innovation, such as the medical device tax and Medicare’s Independent Payment Advisory Board.

Without a strong, innovative economy our safety net will eventually unravel.

- Paul Howard

Real life vs. campaign rhetoric

What happened Tuesday? Two words: Chris Christie.

When he stood arm in arm with President Obama surveying the devastation that Superstorm Sandy wrought in Jersey, Christie reminded voters that a president can’t lead without getting his pristine policy points muddied by real life. Surrounded by debris as far as the eye could see and confronting the problem of what to do to keep tens of thousands of temporarily homeless people fed and warm, Christie repudiated politics as usual.

What did Romney do? He helped collect cans of food. It is terrific for private-sector volunteers to collect goods (and cash) to donate to storm victims. But Romney was running for president, not volunteer in chief.

He needed to say, and say strongly: Cans of food are useless unless infrastructure -- ports for gasoline, roads and transit lines for people -- is up and running, and unless people have power and heat. In a modern, First World country, only government can do these things.

The omission might have been OK if Romney had made clear his position on what government should and shouldn’t do during the campaign. But Romney never explained what the national government’s role is in infrastructure investment or elsewhere. Romney ran on a grab bag of generic GOP talking points.

In a foxhole, people don’t care about marginal tax rates.

- Nicole Gelinas

Original Source:



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