A Neumann with a New Plan
GILBERT, CRAIG
A Neumann with a New Plan by Craig Gilbert Rep. Mark Neumann is a conservative Christian. He's pro-life and anti-homosexuality. He recites the Pledge of Allegiance before press conferences....
...I am somewhat in shock that there are people out there who honestly believe passing on a $5.3 trillion debt to our children is not a problem," he says...
...If government receipts keep roaring past projections, as happened in 1996 and is likely to happen in 1997, the notion of encountering a budget surplus one of these years is no longer implausible...
...At the moment, of course, a debate on the merits of $5 trillion worth of debt reduction seems amusingly theoretical...
...What came out of it, according to one participant, was that "everybody hugged and kissed" and agreed on one thing: In case of surplus, don't let the Left spend it...
...The onetime math teacher and homebuilder wants the federal government to retire its $5 trillion-plus accumulated debt...
...that the best way to lower the debt burden is by expanding the economy, not satisfying old debt...
...that it's better to cut taxes than generate surpluses...
...In a year when revenues are projected to grow by 5 percent, spending growth would be capped at 4 percent...
...But Keating does think Congress needs a mechanism for dealing with windfall revenues...
...He has more than 90 House cosponsors, but is looking for his first in the Senate...
...First, it would generate regular surpluses by capping the annual growth in spending at one percentage point less than revenues...
...This "castor-oil" approach, the Journal said rather savagely, "is so politically dumb it would never really happen...
...Neumann plans to introduce his National Debt Repayment Act later this summer...
...He is especially disdainful of Neumann's attitude toward the debt, which he regards as "puritanical": "Debt is neither good nor bad," Mitchell says...
...You would think someone who is a homebuilder would understand that...
...I think we have a responsibility to the children of this nation to take care of the mess we created," he says...
...The Wall Street Journal has assailed it...
...If I had my way, it would all go to debt repayment," Neumann says, but he concedes the need to placate the party's tax-cutting brigade...
...Gingrich underscored the importance of preserving the party's political coalition, which he described as a three-legged stool: tax cutters, Neu-mannites, and a third group defined, curiously enough, as Republican spenders, epitomized by powerful House transportation chairman Bud Shuster...
...tax cuts— "we agreed to have a polite family discussion and debate," says Heritage Foundation economist Dan Mitchell, one of the plan's arch-critics...
...Now, after spending two-plus years out-hawking his own leadership on spending bills, the sophomore congressman from Wisconsin has launched a cause that lies beyond balanced budgets...
...It's just not going to happen," says the National Taxpayers Union's Dave Keating...
...I don't think you could find any government that's ever done that...
...But Neumann's plan has touched off a remarkably barbed debate among Republicans and conservative activists...
...Senate Republicans are not...
...By forcing the argument, Neumann has stepped into an old Republican feud (supply-siders vs...
...After 30 years of deficits, visions of a debt-free America might seem both apple pie and pie-in-the-sky, impeccably wholesome and hopelessly academic...
...In the face of scattered but acid criticism, Gingrich summoned more than a dozen activists, strategists, and policy mavens for a round-table/cease-fire on Neumann's idea in his office last week...
...Craig Gilbert is a reporter in the Washington bureau of the Milwaukee Journal Sentinel...
...Every penny of it...
...Mitchell says he and other critics have tried to make lawmakers understand "there is literally no credibility to this approach in any school of economic thought...
...By locking in budget surpluses well into the next century and using most of those surpluses for debt retirement...
...Beyond the need to service the coalition, a political question Gingrich must ponder is whether retiring the debt wins votes...
...Second, Neumann would use one-third of each year's surplus for tax reduction, and two-thirds for debt retirement...
...The Washington Times has embraced it...
...Paul Weyrich loves it...
...deficit hawks) and fingered an unexpectedly emergent issue: how to plan for a surplus...
...But that mission, it turns out, has less to do with family values than fiscal rectitude...
...He is willing to hang a campaign on the need to liberate America from its prison of debt: "I would be happy," he says with characteristic sweep, "to stake my future on it...
...Neumann's proposal has two main ingredients...
...Those who attended Gingrich's meeting on the subject say the speaker—who has been ripped by supply-siders for nurturing the plan—is trying to referee the debate...
...House speaker Newt Gingrich and budget-committee chairman John Kasich are on board...
...Jack Kemp hates it...
...Placated it isn't...
...and that the politics of reserving large revenue streams for debt-elimination are hideous...
...Supply-side critics have invoked all the familiar green-eyeshade archetypes—Hoover, Ford, Bush, Darman— against the plan...
...Neumann admits he has a moralist's take on the issue...
...If Neumann has made a name for himself in his short House career, it's as a deficit hawk, not a culture warrior...
...Canadian, French and English conservatives chose austerity over growth, and the GOP will suffer the same fate if we make the same mistake," Kemp wrote...
...Neumann, who plans to run for the Senate next year against Wisconsin Democrat Russ Feingold, argues that slaying the debt is just the kind of mission to mobilize a hand-wringing, meandering Republican party...
...Neumann "wants Republicans to stand for the abstraction of paying down the national debt by the year 2026, even if it means taxing Americans at higher rates than are needed to balance the federal books," the Wall Street Journal editorialized...
...When Jack Kemp digested the Neumann plan, he penned a fervent four-page critique to Gingrich, complaining that locking in budget surpluses would keep taxes artificially high...
...As for the fundamental intra-party rift— debt retirement vs...
...Righteous, impatient, and indefatigable, he has the headlong stride and self-certain zeal of a man on a mission...
...Reaction from the Heritage Foundation has been icy, the National Taxpayers Union mixed, the Cato Institute cautiously receptive...
...that it would "put the cart of austerity ahead of the horse of economic growth...
Vol. 2 • July 1997 • No. 44
