Last week, on March 21st, Congress enacted a new Intolerable Act. Congress passed the Health Care bill - or I should say, one political party passed it - over a swelling revolt by the American people. The reform is an atrocity. It mandates that every American must buy health insurance, under IRS scrutiny. It sets up an army of federal bureaucrats who ultimately decide for you how you should receive Health Care, what kind, and how much...or whether you don't qualify at all. Never has our government claimed the power to decide when each of us has lived well enough or long enough to be refused life-saving medical assistance.
This presumptuous reform has put this nation ... once dedicated to the life and freedom of every person ... on a long decline toward the same mediocrity that the social welfare states of Europe have become.
Americans are preparing to fight another American Revolution, this time, a peaceful one with election ballots...but the "causes" of both are the same:
Should unchecked centralized government be allowed to grow and grow in power ... or should its powers be limited and returned to the people?
Should irresponsible leaders in a distant capital be encouraged to run up scandalous debts without limit that crush jobs and stall prosperity ... or should the reckless be turned out of office and a new government elected to live within its means?
Should America bid farewell to exceptional freedom and follow the retreat to European social welfare paternalism ... or should we make a new start, in the faith that boundless opportunities belong to the workers, the builders, the industrious, and the free?
We are at the beginning of an election campaign like you've never seen before!
We are challenged to answer again the momentous questions our Founders raised when they launched mankind's noblest experiment in human freedom. They made a fundamental choice and changed history for the better. Now it's our high calling to make that choice: between managed scarcity, or solid growth ... between living in dependency on government handouts, or taking responsibility for our lives ... between confiscating the earnings of some and spreading them around, or securing everyone's right to the rewards of their work ... between bureaucratic central government, or self-government ... between the European social welfare state or the American idea of free market democracy.
What kind of nation do we wish to be? What kind of society will we hand down to our children and future generations? In the coming watershed election, the nature of this unique and exceptional land is at stake. We will choose one of two different paths. And once we make that choice, there's no going back.
This is not the kind of election I would prefer. But it was forced on us by the leaders of our government.
These leaders are walking America down a new path ... creating entitlements and promising benefits that model the United States after the European Union: a welfare state society where most people pay little or no taxes but become dependent on government benefits ... where tax reduction is impossible because more people have a stake in the welfare state than in free enterprise ... where high unemployment is accepted as a way of life, and the spirit of risk-taking is smothered by a tangle of red tape from an all-providing centralized government.
True, the United States has been moving slowly toward this path a long time. And Democrats and Republicans share the blame. Now we are approaching a "tipping point." Once we pass it, we will become a different people. Before the "tipping point," Americans remain independent and take responsibility for their own well-being. Once we have gone beyond the "tipping point," that self-sufficient outlook will be gradually transformed into a soft despotism a lot like Europe's social welfare states. Soft despotism isn't cruel or mean, it's kindly and sympathetic. It doesn't help anyone take charge of life, but it does keep everyone in a happy state of childhood. A growing centralized bureaucracy will provide for everyone's needs, care for everyone's heath, direct everyone's career, arrange everyone's important private affairs, and work for everyone's pleasure.
The only hitch is, government must be the sole supplier of everyone's happiness ... the shepherd over this flock of sheep.
Am I exaggerating? Are we really reaching this "tipping point"? Exact and precise measures cannot be made, but an eye-opening study by the Tax Foundation, a reliable and non-partisan research group, tells us that in 2004, 20 percent of US households were getting about 75 percent of their income from the federal government. In other words, one out of five families in America is already government dependent. Another 20 percent were receiving almost 40 percent of their income from federal programs, so another one in five has become government reliant for their livelihood.
All told, 60 percent - three out of five households in America - were receiving more government benefits and services (in dollar value) than they were paying back in taxes. The Tax Foundation estimates that President Obama's budget last year will raise this "net government inflow" from 60 to 70 percent. Look at it this way: three out of ten American families are supporting themselves plus - through government - supplying or supplementing the incomes of seven other households. As a permanent arrangement, this is individually unfair, politically inequitable, and economically dangerous.
It raises a subtle but real threat to self-government when the few are paying more and more of the bill for government services and subsidies to the majority: "He who pays the piper calls the tune." The next chapter is the rule of "crony capitalism," where those who pay most taxes get the privileges, and government by and for the people is replaced by government by and for the few. The end of this story is soft despotism.
We already see enough of "crony capitalism." When government sends bailout money to Wall Street firms they label "too big to fail," that's "crony capitalism." When government buys shares in General Motors, names their management, and dictates their salaries, that's "crony capitalism." When big health insurance companies, instead of competing for market, team up with Congressional Health Care writers to order every individual to buy their products, that's "crony capitalism." When thousands of small businesses have to meet bottom lines with no government bailout, well, you're too small to succeed...good luck!
The Democratic leaders of Congress and in the White House hold a view they call "Progressivism." Progressivism began in Wisconsin, where I come from. It came into our schools from European universities under the spell of intellectuals such as Hegel and Weber, and the German leader Bismarck. The best known Wisconsin Progressive was actually a Republican, Robert LaFollette.
Progressivism was a powerful strain in both political parties for many years. Theodore Roosevelt, a Republican, and Woodrow Wilson, a Democrat, both brought the Progressive movement to Washington.
Early Progressives wanted to empower and engage the people. They fought for populist reforms like initiative and referendum, recalls, judicial elections, the breakup of monopoly corporations, and the elimination of vote buying and urban patronage. But Progressivism turned away from popular control toward central government planning. It lost most Americans and consumed itself in paternalism, arrogance, and snobbish condescension. "Fighting Bob" LaFollette, Teddy Roosevelt, and Woodrow Wilson would have scorned the self-proclaimed "Progressives" of our day for handing out bailout checks to giant corporations, corrupting the Congress to purchase votes for government controlled health care, and funneling billions in Jobs Stimulus money to local politicians to pay for make-work patronage. That's not "Progressivism," that's what real Progressives fought against!
Since America began, the timid have feared the Founding Fathers' ideas of individual freedom, so they yearn for Old World class models. Our Progressivists are the latest iteration of that same fear of the people. In unprecedented numbers, Americans are speaking out against the intolerable Health Care bill and irresponsible debt-ridden spending.
Does anyone recall Norman Rockwell's famous "Freedom of Speech" painting of an average working Joe standing and speaking his mind at a town hall meeting? Today's Progressivists ridicule average Americans speaking out at tea parties across the nation and denounce their criticisms as "un-American." Millions of average Americans reject their big government solutions, and that scares them.
Last January President Obama said: "There are simply philosophical differences that will always cause us to part ways. These disagreements, about the role of government in our lives, about our national priorities and our national security, have been taking place for over two hundred years."
He was right. So let's examine these "philosophical differences" of government. Progressivists say there are no enduring ideas of right or wrong. Everything is "relative" to history, so our ideas need to change. Progressivists say the Founders' Constitution including its amendments, with its principles of equal natural rights, limited government, and popular consent is outdated. We should have a "living constitution" that keeps up with the times. Progressivists invent new rights and enforce them with a more powerful central government and more federal agencies to direct society through the changes of history. And don't worry, they say. Bureaucrats can be controlled by Congressional oversight.
Would you like an example of how successful Congressional oversight is? Fannie Mae and Freddie Mac, the Government-Sponsored Enterprises (or GSEs), underwrote trillions of dollars in junk mortgages. Year after year their officials and others from HUD, Treasury, and other agencies who supervise them marched up to Congress for hearings. Red flags were raised. The oversight committees had other priorities and dismissed them out of hand. With the housing market already tanking, Financial Services Committee Chairman Barney Frank said: "This ability to provide stability to the market is what, in my mind, makes the GSEs a congressional success story." Less than 18 months later, the ‘market-stabilizing' GSEs went belly-up due to their shoddy business practices, collapsing the mortgage credit industry and sparking the worldwide financial meltdown. No one knows the ultimate cost to the taxpayers but it will be gigantic.
If Congress can't control what a few mortgage finance bureaucrats do with your dollars, why would anyone trust Congress to control what tens of thousands of bureaucrats will do with your health?
The Progressivist ideology embraced by today's leaders is very different from everything rank-and-file Democrats, independents, and Republicans stand for. America stands for nothing if not for the fixed truth that unalienable rights were granted to every human being not by government but by "nature and nature's God." The truths of the American founding can't become obsolete because they are not timebound. They are eternal. The practical consequence of these truths is free market democracy, the American idea of free labor and free enterprise under government by popular consent. The deepest case for free market democracy is moral, rooted in human equality and the natural right to be free.
A government that expands beyond its high but limited mission of securing our natural rights is not progressive, it's regressive. It privileges the powerful at the expense of the people. It establishes the rule of class over class. The American Revolution and the Constitution replaced class rule with a better idea: equal opportunity for all. The promise of keeping the earnings of your work is central to justice, freedom, and the hope to improve your life.
In their hearts Americans know this, but people were alarmed in 2008 by rising unemployment, falling home values, a credit crunch, and a financial meltdown.
They voted for a change of parties in the White House, and elected the largest Democratic Congressional majority in more than three decades. So overwhelming was their majority that the opposition is unable to do anything to stop them from running roughshod over our foundations. Harry Reid had a supermajority in the Senate that could not be filibustered. Still, the people's mandate for Congress and the new President was clear, simple, and unmistakable: get employment back on track ... get our economy growing again.
Americans have lost jobs nearly every month since these leaders took over the federal government in January 2009, more than 4 million at last count. The official unemployment rate hovers near 10 percent, but if we add in folks who have stopped looking for work due to lack of job prospects, the rate is a lot higher.
They began by passing the first Stimulus, a taxpayer giveaway to their favorite special interests. The price tag was $862 billion. They pushed through a second stimulus bill that cost you another $18 billion. Let's see: since 4 million Americans have been unemployed since they passed these "stimuli," that averages $220,000 per job lost. Think about that. Democrats can't even put people out of work without spending near a trillion dollars!
Just to return to where we were at the end of 2007, 8.4 million jobs have to be created. To reduce unemployment to its pre-crisis level of 5 per cent by the end of President Obama's term, our economy needs to create 247,000 new jobs per month. But we are headed in the wrong direction ... except in one field: the government is growing at breakneck pace in expanding federal payrolls.
Although millions of private sector jobs have been lost since the recession began, Washington is on track to add about 275,000 more people to the public payrolls - a whopping 15 percent increase. And we aren't talking minimum wages here. More federal workers make over $100,000 than those earning $40,000 or less. The average government worker's salary in 2009 was 21 percent higher than private sector salaries. The average federal worker's compensation package, including benefits, was nearly $120,000 in 2008, twice the private sector at $60,000. One study shows the private sector benefit package averages $9,900 while the federal package averages almost $41,000. Now the Administration wants Congress to privilege federal workers by writing off their unpaid student loans after ten years. People in productive private sector jobs would keep paying for twenty years. Progressivists would really like everyone to work for the government.
Has any Congress in history enacted, or tried to enact, so many foolish, squalid, and counterproductive programs?
It isn't good news when anyone losses his job. But I'll make an exception when the Speaker of the House and the Senate Majority Leader lose theirs in November!
As their first major item of business last year, these leaders pushed through a budget so bloated that it will double the federal debt in five years, and triple it in ten.
Now the Administration has sent Congress a budget that's far worse. The nonpartisan Congressional Budget Office [CBO] reports that 10 years from now, this budget will drive the federal debt burden up to 90 percent of the nation's entire economic production. It propels spending to a new record of $3.8 trillion next year [FY 2011]. It widens the annual deficit to a new record of $1.5 trillion this year [FY 2010], and raises $1.8 trillion in new taxes through 2020.
Two and a half years after this recession started, and no new private jobs? Think what these mind-boggling tax increases and mountain of debt are signaling to people who want to open or expand job-creating businesses. Congress keeps raising the barriers against work and production - that's your answer.
At a time when economic and job expansion should be Washington's highest priority ... and as if the multi-trillion dollar Health Care debacle were not enough, the Progressivist leadership in Congress are adding insult to injury by promoting their energy and climate agenda through their Cap and Trade plan. Put aside the fact that there is growing disagreement among scientists about climate change and its causes. This bill is a big mistake for other reasons.
CBO estimates that Cap and Trade's total cost is another near-trillion dollars. By one CBO estimate, the tax and energy cost bills for the average American household may grow by $1,600 a year. Other studies put this cost a lot higher.
If you don't believe me, let me quote a key Democratic Senator:
Under my plan of a cap-and-trade system, electricity rates would necessarily skyrocket. Coal-powered plants...natural gas...whatever the plants were, whatever the industry was...would have to retrofit their operations. That will cost money. They will pass that money on to consumers...So if somebody wants to build a coal-powered plant, they can; it's just that it will bankrupt them because they're going to be charged a huge sum for all that greenhouse gas that's being emitted.
That was Senator Barack Obama in January 2008, talking about what he would do as President. Don't say the man doesn't work to keep his promises!
Economists across the spectrum tell us that Cap and Trade would make our long-term national economic production fall below potential, causing higher unemployment. Federal spending is on an unsustainable path that can only get worse if this happens. There is general agreement that the environmental improvements from Cap and Trade are either nonexistent or too small to measure.
Congressional leaders are also pushing an unprecedented expansion of the Federal Reserve Board's regulatory powers over financial institutions under the belief that government must protect the people from themselves. This measure will direct federal agents to inspect, and at their pleasure object to, the wages and compensation which businesses on Main Street as well as Wall Street wish to pay employees. It puts bureaucracies in charge of deciding the type and line of credit which consumers and businesses will have access to when they shop for cars, homes, education, and expansion of facilities. The Fed has already failed the twofold assignment it has - keeping the economy and jobs growing, and keeping prices stable. It should return to its original mission of guaranteeing the long-term value of our dollar. Instead the same leaders who never knew the government mortgage giants were supplying credit for worthless mortgages now want Fed bureaucrats to regulate the businesses that supply personal and commercial credit? If that happens, economic recovery will be a longer time coming.
And now I want to return to the Health Care Frankenstein. Most Americans understand that government-run Health Care is not free, not cheap, and not compassionate. I think most Americans believe Congress has no idea of what the public demand will be for subsidized Health Care. They are correct. When Medicare was enacted, Congress guessed it would cost about 10 percent of what it turned out to be after 25 years. Heck, Congress couldn't even figure the cost of the 3-month long Cash for Clunkers subsidy last year, underestimating it on the order of 1 to 9. Most Americans know the Congressional majority are clueless about what their government-run Health Care system is going to cost.
The drama that brought this creature to life was unedifying ... part tragedy and part farce. Ethical categories went out the window. Never in history have the deliberations of Congress been subverted on this scale. The secrecy, the lack of transparency, the half-truths were stunning. The votes called at midnight ... the 2 and 3 thousand page bills members of Congress had no time to read before the votes ... the sordid backroom deals, the Cornhusker Kickback that shamed Nebraska, the Louisiana Purchase, the "Gator Aid" Medicare privilege for Florida, the additional Medicare dollars for states whose wavering representatives only yesterday were ferociously denouncing earmarks ... the federal judgeship dangled for one lawmaker's brother ... the raid on the Medicare piggy bank ... the lie that $250 billion for "doc fix" shouldn't count as a Health Care cost ... the double-counted deficit estimate scam that would land any accountant in jail ... the proposed Slaughter rule that Congressmen not record a vote on a bill their constituents hate, just "deem" it passed and vote on the amendments...and to complete the farce, the phony Executive Order pretending not to fund abortions when the Health Care bill, as "the supreme law of the land," does fund abortions. The level of political corruption to buy the votes for this debacle makes all past examples look penny ante by comparison.
Self-government stands or falls on integrity, not only in those who represent you but in the enactment of law. This indecency soiled our freedom and embarrassed the democracy we promote in other nations. And this may not be the last of it. To enact its transformative agenda, this leadership employs the Machiavellian saying that the end justifies the means. America was born in a revolution against that whole idea. Soon it will be the norm.
The Constitution and the consent of the people are all that stand between limited and unlimited government power. Zealous ideologues with the best of intentions brush aside the limits on power in order to get whatever they believe is good for the people ... no matter what the people believe. Our system of freedom can survive an assault, but it won't survive if the people are frightened, or angry, or asleep at the switch. A great Democrat, President Andrew Jackson, once said: "eternal vigilance by the people is the price of liberty." We can thank our current leaders at least for this: they have awakened the nation to the danger of taking self-government for granted.
Congress is not only enacting a social welfare state agenda over the objections of the people. It is failing to address the problems that threaten to engulf our country, principally economic decline and entitlement-driven debt crisis. The coming election will be a referendum on the agenda of our current leadership. Either it will give them a mandate that says "more of the same," or it will end the abuse of power and put America back on the path of growth and freedom.
Supposing the American people use their referendum in November to elect a new majority, what would the next Congress do?
The first order of business will be "repeal and replace." We will work to repeal federalized Health Care and replace it with a robust, competitive open market in health care that puts patients and their doctors at the center - not employers, not insurers, and not government agents. This takes at least two elections, and we must show our perseverance.
A new Congress will then turn to the great problem of our stagnant economy and the debt tsunami bearing down on us. The days of pretending not to notice are over. The next Congress will understand this threat and act after transparent deliberation and real debate.
I have put forward my specific solution, called "A Roadmap for America's Future," to meet this challenge. The CBO confirms that this plan achieves the goal of paying off government debt in the long run - while securing the social safety net and starting up future economic growth.
The problem in a nutshell is this: Medicare, Medicaid, and Social Security, three giant entitlements, are out of control. Exploding costs will drive our federal government and national economy to collapse. And the recession plus this Congress' spending spree have accelerated the day of reckoning.
Today, Medicare is $38 trillion short of its promised benefits. In five years, the hole will grow to $52 trillion. Your family's share of this gap is $458,000. Medicaid will add trillions more in state and federal debt.
Social Security's surplus is already gone, and its debt is mounting. Unless its finances are strengthened, the government will be forced to cut benefits nearly 25 percent or raise payroll taxes more than 30 percent.
Both Republicans and Democrats have failed to be candid about this. And we have only postponed the crisis by shaking a tin cup at China and Japan.
A new Congress could start by making you the owner of your health plan. Under my Roadmap reform, a tax break that now benefits only those with job-based health insurance will be replaced by tax credits that benefit every American. And it secures universal access to quality, affordable health coverage with incentives that hold down health-care cost increases.
Everyone 55 and over will remain in the current Medicare program. For those now under 55, Medicare will be like the health-care program we in Congress enjoy.
Future seniors will receive a payment and pick an insurance plan from a diverse list of Medicare-certified plans - with more support for those with low incomes and higher health costs. To reform Medicaid, low income people will receive the means to buy private health insurance like everyone else.
Under the Roadmap's Social Security proposal, everyone 55 and older will remain in the existing program with no change. Those under 55 will choose either to stay with traditional Social Security, or to join a retirement system like Congress's own plan. They will be able to invest more than a third of their payroll taxes in their own savings account, guaranteed and managed by the federal government. For both Social Security and Medicare, eligibility ages will gradually increase, and the wealthy will receive smaller benefit increases.
And we need to get this economy moving again, so the Roadmap offers taxpayers an option: either use the tax code we have today, or use a simple, low-rate, two-tier personal income tax that gets rid of loopholes and the double taxation of savings and investment. And let's replace corporate income taxes with a simple, competitive 8.5 percent business consumption tax. These low-rate and simple tax reforms would provide the certainty and the incentives for investors to open new enterprises and for workers to find a marketplace expanding in new jobs.
The Roadmap plan shifts power to individuals at the expense of government control. It rejects cradle-to-grave welfare state ideas because they drain individuals of their self-reliance. And it still honors our historic commitment to strengthening the social safety net for those who need it most.
I would welcome honest debate in the next Congress on how to tackle our fiscal crisis - and the larger debate on the proper role of government. It's time politicians in Washington stopped patronizing the American people as if they were children - deferring tough decisions and promising fiscal fantasies. Tell Americans the truth, offer them a choice, and count on them to do what's right.
A political realignment is on the way. Democratic leaders are staking their party's future on their ideological agenda. Financial Services Committee Chairman Frank candidly admits that his party "are trying on every front to increase the role of government." Former President Clinton told a Netroots convention last year that "We have entered a new era of progressive politics, which if we do it right could last 30 or 40 years."
The question is, do we realign with the vision of a European-style social welfare state, or do we realign with the American idea?
My party challenges the whole basis of the Progressivist vision of this country's future. We challenge their attack on American exceptionalism. We challenge their claim that bureaucratic centralization is the only way the US can meet the economic and social challenges of our time.
Those leaders have underestimated the good sense of the American people. They broke faith with independents, Republicans, and their own rank-and-file. They walked away from the foundational truths that made America the wonder and the envy of the world. The price of their infidelity will be high.
I hope you won't mind an aside. I absolutely love Oklahoma! As you may know, I married Janna Little, daughter of Dan and Prudence Little, from Madill. Well, Janna and I are planning on spending half of our year here in retirement. And I can tell you it won't be Summer...it's just gets too hot here for a Wisconsinite. We will be spending the Fall and Winter here. You see, I love to hunt and fish. Each year we come for deer, duck, and turkey season. Janna refers to these times as Thanksgiving, Christmas, and Easter. There's something about Oklahoma that is truly captivating. It's a beautiful, big, unconstrained country with great-hearted people who know what it is to live like free men and women.
Some of my friends in Marshall County have on occasion called me "yankee," which I find particularly disturbing. I have always thought a yankee is someone from the Northeast, not the upper Midwest. Needless to say, I am told this can be fixed if I include among my life's achievements the high and noble accomplishment of noodling a giant catfish from the banks of Lake Texoma. And so, I will be returning in early June, otherwise known as noodling season, to gain this rite of passage so that I may never be called yankee again, and also hoping I keep my ten fingers intact.
Knowing America, and Oklahoma as I have come to know it, I am confident that the American character is up to every challenge. America is not over. This exceptional nation will not go down the way of mediocrity. Ronald Reagan used to say: "Freedom is never more than one generation away from extinction ... It must be fought for, protected, and handed on for [our children] to do the same." We are that generation. The fight is our fight, and it begins now! The time is at hand to reclaim America for freedom.
Thank you very much.
Note: Congressman Paul Ryan delivered this speech to the Oklahoma Council of Public Affairs in Oklahoma City on March 31, 2010.
Paul Ryan represents Wisconsin's First Congressional District. He serves as ranking member of the House Budget Committee and senior member of the House Ways and Means Committee.