This week, The Heritage Foundation released a monumental policy guide titled “Solutions for America“. For the last year and a half, President Barack Obama and Speaker Nancy Pelosi (D-CA) have charged conservatives with having “no ideas” or “old ideas.” The release of “Solutions for America” will stop this false narrative once and for all. The fact is that conservatives have been offering policy solutions for the past two years, and now The Heritage Foundation has combined its research with common sense solutions to give America the answers it needs. Let’s look at a few of them.
Health Care
In March 2010, Democrats in Congress finally passed the health care legislation they had been trying to enact since January 2009. And though we already spend over 17% of GDP on health care, this trillion-dollar plan piles on even more spending. Without listening to the public, Democrats passed this massive government takeover of health care, creating more spending, expanding bureaucracy, and ensuring that the already confusing health care system will only get worse. All throughout the debate, Democrats in Congress and even President Obama declared that the Republicans offered no alternatives for their health care reform plan. Nothing could have bene further from the truth. Now that Obamacare has passed, what do we do now? The Heritage Foundation offers some solutions.
The first thing Heritage recommends is to repeal Obamacare. Heritage Action for America, the sister organization of The Heritage Foundation, has been leading the charge to repeal Obamacare by presenting Members of Congress who voted against Obamacare with a Discharge Petition that would force Congress to vote on repealing Obamacare. The Heritage Foundation also wants to give citizens control of their health care through Tax Equity, which would give individuals who buy health coverage on their own (separate from their employer) the same kind of tax breaks that people get when they purchase from their employer. Today, they receive no tax breaks. Health Care also needs to be portable, like car insurance to remain cost-effective and efficient.
Tax Reform
The Corporate Tax rate in America is the second highest tax rate in the world. This makes America less competitive than most other countries in this global economy. On top of that, America is one of only a few countries that taxes corporations on income they earn in other countries. These are large disincentives for corporations to stay headquartered in America. As a result, jobs are moving overseas. Another tax that will hurt American small businesses is the return of the Estate Tax, also called “the Death Tax.” Democrats claim that the Death Tax will only hurt the wealthy, but most small business owners file as individuals, not as a corporation, and they will suffer the most. Their profits are razor thin, and a burdensome tax imposed just because someone died could cause the beneficiaries of an estate to lay off employees or go out of business for good in order to meet their tax burdens.
The obvious solution is to repeal the Death Tax. It has not been an issue for a few years, but it is set to come back on January 1, 2011. Another major threat that will affect all Americans is the largest tax hike in history, set to arrive on January 1, 2011. Congress must act. The corporate income tax should also be lowered to the Organisation for Economic Co-operation and Development (OECD) level of 26% tax rate. The United States is currently at a staggering 39% tax rate, making it nearly impossible for us to compete internationally.
Entitlements
There is a huge crisis that will soon hit us with the force of a tsunami: spending on Social Security, Medicare and Medicaid, otherwise known as entitlement spending. If those expenditures continue at the current rate, it will consume all tax revenues by 2052. To pay for these programs by raising taxes, Congress would have to double the federal income tax rate on future generations. That is simply not an option. So what can be done?
To fix Social Security, The Heritage Foundation recommends that America set up voluntary savings accounts. That way Social Security would act as a “real insurance,” providing a safety net for the poor — the people who really need the benefits. Because people are living longer, the retirement age needs to be raised and people over the retirement age should be removed from payroll taxes. Medicare can be fixed by actually defining the amount we want to spend on it and sticking to it, instead of just making open-ended promises. It would be capped and reviewed periodically. Fixing Medicaid revolves around the idea of a patient-centered care for the disabled and the elderly giving them a say in what care they receive. In the end, it needs to be insurance based.
Welfare
Another run-away spending program is the Welfare program. Heritage analyst Robert Rector called the growth of the welfare state unsustainable. Spending is expected to go up $10.3 trillion in just ten years. Obama’s FY 2011 Budget calls for a $958 billion increase from 2008. There is a way to solve this problem though.
Instead of giving people welfare grants, the government should give out loans to welfare recipients that would have to be paid back. This would lead to an increase in behaviors that would prevent them from have to go back to welfare in the future. After the recession ends, Congress can roll back all 71 of the means-tested welfare programs and provide fiscal restraint to all of them. Work should also be a requirement for all able-bodied welfare recipients. Currently, if you get married while on welfare, you get penalized. These penalties should be eliminated to promote families, instead of out-of-wedlock births.
The Heritage Foundation’s “Solutions for America” offers over 120 policy solutions on over 20 issue areas. It is a good roadmap for the next Congress, and it can get us back on the road to freedom and prosperity.