When a major presidential candidate refuses to
reveal the specifics of her campaign program, taking the position that
she "won't answer hypothetical questions," how are we to gauge her
candidacy and intentions?
There's only one way: We must become detectives, reading her statements
- particularly between the lines - to figure out her ideas and likely
governing philosophy. And we also need to examine the agenda being
formulated in Congress by the left wing of the Democratic Party to help
us to fill in the blanks in assessing Hillary's true intentions.
She'll never tell us.
The headline to this article is intentionally conditional ("what she'd
do", not "what she'll do") because, despite her front runner status,
she is, thankfully, not inevitable. But we can't ignore her commanding
lead in the Democratic Primary (Rasmussen has her at 46% with Obama at
a puny 18% and Edwards out of sight at 11%) and her strong showing in
general election matchups (she beats everybody but Giuliani).
So it is definitely appropriate to read the tea leaves and project what President Hillary would do if elected.
The answer is not pretty. If she is elected, as it looks like she will,
there is a very good likelihood that she will bring with her a heavily
Democratic Senate. With four Republican incumbents endangered (Coleman,
Minn; Sununu, N.H.; Smith, Ore; and Collins, Me) and four open seats
likely to go from Republican to Democrat (Virginia, N.M., Colorado,
and, possibly Nebraska), she could have 58 Democrats at her beck and
call, making a filibuster unlikely.
That highly Democratic Congress and President Hillary would likely
combine to enact legislation so far reaching and ideologically
polarizing as to be a rare turning point in American history. One has
to think of Woodrow Wilson's first two years, FDR's first term, Lyndon
Johnson's first two years as president and, on the right, Reagan's
revolution to find anything comparable in scope and extent.
It's a frightening thought.
Start with her tax policies.
TAXES
Hillary makes no secret of her intention to roll back Bush's tax cuts
on the 'wealthy.' But her definition of 'rich' is sufficiently
inclusive so as to encompass everyone with a family or household income
over $200,000 a year. Clearly she would include the following in the
tax cuts she will repeal (or allow to sunset):
She'd raise the top bracket of the federal income tax, restoring it to 39.6% from its current 35% level.
She'd increase the capital gains tax, restoring it to 20% - or maybe
even go higher. My bet is that she will increase it to 30% or even
eliminate special treatment for capital gains altogether, taxing gains
as ordinary income (at 40%).
Hillary will almost certainly roll back much- if not all- of the estate
tax reductions of recent years, lowering dramatically the size of
estates subject to the levy.
She'd restore the tax on dividends to 30% from its current 15%.
But her agenda will doubtless go further. She will be much more radical in raising taxes than Bush was in cutting them.
SOCIAL SECURITY TAXES
One of her most important steps will probably be to raise Social
Security (FICA) taxes. She won't raise the rate since that would impact
her liberal base. Instead, she'll raise the threshold of income that
subject to taxation, now limited to the first $97, 500 of income.
At a recent candidate forum in Iowa, Hillary played it cute. First, she
told the audience that she had nothing 'on the table' about Social
Security taxes. Then, after the meeting, she privately told Todd
Bowman, a schoolteacher who was in the audience, that she would
consider imposing FICA taxes on all those who earn more than $200,000.
She told Bowman that she would probably keep the current threshold at
$100,000, skip the next hundred thousand of income, and then tax all
income over $200,000 for Social Security.
So, look forward to some big changes there.
(Of course, she will not remove the cap on benefits, just on taxes).
Her remaining tax increases will likely relate to ending the capital
gains treatment of carried interest in partnerships. Managers of real
estate, energy, or private equity partnerships pay capital gains taxes
on their management fees or their share of the profits even though
their payments have nothing to do with any capital they may have
directly invested.
Hillary will dress up these tax increases (the biggest in history) as
tax relief for the middle class! She'll maintain this fiction by using
the bogyman of two largely theoretical tax increases which might
eventually confront middle class taxpayers.
EXTENDING THE BUSH MIDDLE CLASS TAX CUTS
First, she'll take credit for renewing the Bush tax cuts in the middle
and lower income tax brackets. Projected over ten years, this will come
to a tidy sum of "tax relief" she will offer to the middle class. Since
these cuts are slated to expire in the early years of the next
president's first term, their extension could be billed as a middle
class tax cut.
THE ALTERNATIVE MINIMUM TAX CUT
Second, she'll change the nature and structure of the Alternative
Minimum Tax (AMT) so it does not affect the middle class as drastically
as it will if left unchanged. This legislation, enacted more than a
decade ago, was designed to subject all high income taxpayers to a
minimum proportion of their income they had to pay in taxes regardless
of which deductions or shelters they claimed on the tax forms.
But inflation and increased prosperity has now moved 23 million Americans into a position where the AMT would apply to them.
Hillary never mentions that it was her husband who vetoed the repeal of
the AMT in 1999. No, it's all the Bush Administration's fault.
In recent years, Bush and the Congresses have chosen to adopt one year
patches to postpone the effective date of the expansion of the AMT to
the middle class. They did so because they didn't want to have to
account for the ten year projected revenue loss repealing or modifying
the AMT would entail.
But it's a game. Nobody expects the AMT to take full effect, ever.
However, the amounts involved are so stupendous that Hillary can take
credit for all of it, over ten years, as part of her "middle class tax
cut."
By cutting the two theoretical tax increases - renewing Bush's middle
income cuts and reforming the AMT - she can show the biggest net tax
reduction in history at the same time that she is, in fact, legislating
the largest net increase in history.
HEALTH CARE
Having once been wounded and left for dead by her signature issue, she
is very carefully deceiving us about what she would actually do as
president in changing health care. She pretends that she would simply
move to cover the 45-50 million uninsured and would leave everybody
else's health care insurance in tact.
But her pretensions are nonsense. If Hillary extends health coverage to
50 million Americans, she will drastically increase the demand for all
manner of health and hospital care services. The fact that most of
those who will be newly covered are illegal immigrants or other people
living just below or just above the poverty level indicates an
especially high rate of increase in demand for services. But the supply
won't go up. There will be no sudden increase in the number of doctors,
nurses, or hospital beds.
With a constant supply and a rapidly increasing demand, prices for
health care will skyrocket. But with 16% of our GDP currently going to
health care, how much more can we afford? No other country has more
than 11% of its economy devoted to the medical sector. The
Administration will have to resort to price controls or limits on
health care utilization to temper the increase in health costs.
That means one absolute change that she's keeping quiet about: health
care rationing by the government. Hillary will say that it is fairer to
ration health care based on merit than on price as it is now done. But
the fact remains that "no, you can't" will be heard more and more by
those seeking health care.
This impact will be especially great on the elderly, where life and
death decisions must be made with a view to balancing costs with
benefits. While every elderly person is already covered by Medicare, of
course, the aggregate increase in demand caused by the inclusion of 50
million new people in the system will drive up costs for all and
require rationing for all. And it is easiest to ration medical care to
the elderly. Half of all Medicare spending is during the final year of
the patient's life. We will see a revisiting of the "duty to die" ideas
of former Colorado Governor Dick Lamm.
The long term effects of Hillary's health care reforms will
fundamentally change the entire nature of our medical system. The
utilization controls and cost limits will make the current private
insurance system a cover and a front for increasing government
regulation.
PRESCRIPTION DRUGS
In the area of prescription drug costs, which account for 10% of all
health care spending, we can anticipate major efforts to reign in
costs, requiring generic drugs on all Medicare and Medicaid
prescriptions, cut backs on pharmaceutical advertising, and limits on
drug company reps who push their medicines on doctors.
The taxes Hillary will raise can always be repealed. But her health care changes are forever.
EDUCATION
Hillary will likely follow the lead of Congressman George Miller,
Chairman of the House Education Committee, in weakening the essential
provisions of the No Child Left Behind Act. Under its current
provisions, schools and students are rated based on objective test
scores. Miller's proposals, which Hillary will probably adopt, call for
using graduation rates as a substitute for testing in assessing student
and school performance.
The difference is crucial. It means that subjective grading by the
teachers themselves will be used to asses the success or failure of
their teaching. A system designed to bring higher standards to schools
will bend to accommodate mediocrity as a result of pressure from the
teachers unions.
IMMIGRATION
Hillary is co-sponsor of two key bills: The SOLVE Act and the DREAM
Act. These two acronyms describe legislation which would give every
illegal immigrant, and their children, legal status if they have lived
in the United States for five years.
To earn this amnesty, they will not be required to learn English, have
a job, stay arrest-free, pay taxes, or jump through any of the hoops
set up by the Bush Administration. They would simply have to live in
the U.S. for five years without getting caught.
These laws also guarantee in-state tuition for all children of illegal immigrants who have lived here for five years.
And, since the illegal immigrants would now get legal status, they
would be eligible for another of Hillary's campaign promises - free
health insurance for all citizens and legal immigrant children.
So, here's the deal: Come here illegally. Dodge the cops for five
years. Then you can get legal status, a path to citizenship, health
insurance for your kids and in state tuition at their local state
university.
SOCIAL POLICIES
One of the most novel of Hillary's ideas (and perhaps the most
pernicious) will be the extension of government largesse to the middle
class.
Hillary realizes, as Bill once told me, that any government entitlement
for poor people can be easily repealed since they lack political power
and practical voting strength. But middle class entitlements, once
granted, last forever - see Social Security and Medicare and rent
control in New York City.
So Hillary will pioneer entitlements and grants for middle class
families, making them at once dependent on government aid, winning
their political gratitude, and giving them a stake in benefit programs
that also help the poor.
She will bring us much closer to the Swedish, French, and German model
where everybody gets a check from the government, regardless of their
wealth or income, making it impossible to criticize the program.
Already she has floated three ideas along these lines:
She proposed a $5,000 baby bond to each newborn in the U.S.. After
public mockery, she backed off the idea, but it likely remains on her
agenda.
She suggested government grants to the states to fund seven paid days
of sick leave for all employees, public or private.
She favors extending the coverage of the Family and Medical Leave Act
to all businesses of 25 or more employees, down from the current
exclusion of all firms with 50 or fewer workers.
But these programs are but the tip of the iceberg. Her
presidency would bring with it a major expansion of government
benefits, particularly in those flowing to the middle class. The
potential of such legislation is to transform us into more of a
European style nanny state social democracy and less of a free
enterprise country based on self-reliance.
TERRORISM
Look for her to curtail the wiretapping without warrants by the NSA and
to weaken the Patriot Act in important respects. Hillary will have to
respond to the demands of the left to curtail programs like Guantanamo
and aggressive interrogation techniques even though these steps would
make us more vulnerable to terrorist attacks.
IRAQ
But don't think Hillary would withdraw from Iraq! She won't. If
anything, she may increase our commitment there and extend it for many
years.
As president, Hillary's most pressing concern will be to show the world
and her domestic audience that she is tough. Overcoming misconceptions
of how a woman might govern, she will be at great pains to demonstrate
her strength and firmness. These concerns, plus her own views on the
Iraq situation, will keep us in Iraq for most of her first term.
Before Obama entered the Democratic primary and transformed a cakewalk
into a potentially tough fight, Hillary was quite plain about her
belief that our involvement in Iraq "entailed significant residual
security commitments" that she felt bound to honor. Interviewed by the
New York Times in March of this year, she suggested several of the
missions she felt would have to continue under her presidency:
Policing the border with Iran
Hunting al Qaeda in the provinces
Providing intelligence, logistical, air, and training support to the Iraqi Army as needed.
While she refuses to elaborate or to speculate on the size of the troop
commitment which would be required, one can easily see her becoming
committed to a policy of ongoing troop presence. And once we have
troops in Iraq, we might have to send in more to protect the ones we
have there.
It will be interesting to see how the Democratic liberal base takes to
her Iraq policy. It is easy to see her becoming subject to the same
kind of abuse and criticism as Lyndon Johnson was when he escalated our
troop commitment to Vietnam after winning the 1964 election on a peace
platform.
We hope it won't happen. But if she does win, this outline will likely prove prescient - and depressing.
Hold on to your wallets!
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