AFTER two years the Bush Administration has developed a split personality. In foreign and defense policy it has acted decisively and skillfully, earning high marks from the American people. But on the domestic side, much is in disarray. The budget deal of 1990 will probably go down as the worst political deal of the 20th century, and was largely responsible for driving this country into a recession. The only glimmer of hope came from the president's deputy policy planner, James Pinkerton. His proposal, called the New Paradigm, suggests we use the economic incentives of capitalism to solve some of our social problems. But even such a creditable idea as this is ridiculed by senior White House staffers. It is time to return to and refurbish the old Republican domestic policy paradigm that got Nixon and Reagan elected twice and Bush elected once. The Old Paradigm is founded on the idea that as long as people feel secure in their jobs and their real income is steadily increasing, after taxes and inflation, they probably will vote for you. The bottom line of the economic prosperity that flowed from President Reagan's domestic policy was almost 20 million new jobs and eight years of continuous economic growth.
There are other important aspects to the Old Paradigm. Beyond economic prosperity, the goals of a powerful domestic policy must include, at every opportunity, the enhanced protection of life and property and the expansion of personal liberty.
Here are some specific policies the Old Paradigm would dictate in 1991:
Slow the growth of federal spending. The prime cause of our domestic difficulties is extravagant spending by the federal government. Since 1989, annual federal spending has increased almost 20 percent. Even after the nefarious Brady-Darman budget ``reduction'' deal of 1990, federal spending was deliberately set to increase an unconscionable 9 percent in 1991. We do not have to cut spending to set our fiscal house in order, but we can set a sensible, ironclad limit of 6 percent on spending growth, which would save $35 billion in 1991. President Bush, in his State of the Union message, did indicate that spending control in principle is one of the keys to achieving his objective of renewed economic growth. A specific spending limit, such as the flexible freeze idea originally proposed in 1988 by Michael Boskin, would put some teeth in this principle.
Reduce personal income taxes by 5 percent. When the Gulf war is successfully concluded, the time for domestic reconstruction will begin. The battery of the US economy is going to need a jump start badly, and only the heavy amperage of an across-the-board cut in personal taxes for everyone can do it. For every single percentage point we can slow the growth of federal spending, we can afford to cut personal income taxes by 2 percent - without increasing the federal deficit. Personal income taxes will be $500 billion in 1991. If we reduced federal spending by 3 percent, we could cut those taxes by 5 percent and still have $10 billion left over.
Sell Amtrack. Here we are, the symbol of capitalism to the entire world, giving advice to socialist countries on how they should move to a freer economy while we sit atop one of the largest socialized railroads in the world. Amtrack costs us $600 million a year. Sell it, give it away, pay someone to take it, but get rid of it.
Stop all subsidies to farmers and ranchers. During the last ten years these rascals have gotten over $200 billion of the taxpayer's money. In 1991 alone, subsidies will be $18 billion. Enough is enough. Those farmers and ranchers who cannot earn enough to live on will be eligible for the same welfare benefits the rest of us get if we cannot support ourselves.
Reduce the federal deficit. If we can control the growth of federal spending, and cut these unjustified subsidy programs, we could have a nice personal income tax cut and still have over $25 billion to apply to the federal deficit. The federal deficit, though large in absolute terms, is still only about 5 percent of our gross national product. Steady economic growth combined with responsible growth in federal spending is the only way to eliminate this serious problem.
Repeal, repudiate, and repent as many of the tax increases of 1990 as we can. When the Gulf war is over and the United States has prevailed, which it will, President Bush will have enormous political support, enough support to revoke the 1990 budget deal to help pave the way for a strong economic recovery in 1991.
Cut the capital gains tax. This is completely contrary to the 1990 budget deal, but President Bush has laid the groundwork for a new domestic policy agenda by calling for a ``reduced tax for long-term capital gains.'' Let's get specific. Cut it in half. Such a move would create hundreds of thousands of new jobs, generate more tax revenue, and put us on a more equal, competitive footing with countries such as Germany and Japan.
Declare a one-year moratorium on all new federal regulations. The best part of Reagan's regulation policy was not the regulations that were changed (although the removal of controls on gas and oil was startlingly effective), but rather all the regulations that were never proposed.
Fight for a balanced budget amendment. Only with a balanced budget amendment can we realistically expect Congress to curb overspending. We can't and shouldn't try to eliminate our huge federal deficit in one year, but we could and should make it mandatory that it be phased out steadily over a five-year period.
Repeal draft registration. The Gulf war has proven the all-volunteer force is an awesome fighting machine. No need to continue spending tens of millions of dollars maintaining a computer list of teenage American males.
Reverse the free frank. For over 200 years our highest elected officials have been able to send mail to us free, simply by signing their name in the upper right hand corner of the envelope. Today, with the use of postage machines, the ``free frank'' is the major cause of abuse in Congressional mailings. Let's reverse franking. Pass legislation that would entitle any citizen to write free to a Congressman, Senator, or President simply by signing their name where the stamp now goes. Let elected officials retain their privilege, with one difference. No more machine mailings. They can write to us for free as much as they want as long as they personally sign every single envelope.
Limit the terms of politicians to 12 years. It is time to limit every Congressman to six terms of two years each, and every Senator to two terms of six years each. To be fair and evenhanded, let's allow our future presidents to serve three terms of four years. Twelve years in Washington out to be enough for everyone.