Kudlow slaps 'big government conservatism'
Big spending Republicans may have to do an end-run around big spending Democrats:
The era of big-government conservatism must come to an end. And right now.
In the new Congress next year, Democrats will push a revenue paygo. This means any new spending initiatives could be financed through higher taxes. And Democrats want to spend. Just take a look at their wish list: student loan subsidies, a major expansion of No Child Left Behind, more money to fill so-called “doughnut hole” (Medicare Part D) prescription-drug assistance, and an expansion of health care for the uninsured on the way to universal health coverage.
We could be talking hundreds of billions of dollars of budget increases that under a revenue paygo system would require higher tax rates.
Many Democrats are saying there’s a $350 billion “tax gap” that could be collected from tax deadbeats. But this is a huge reach. Sure, a tax amnesty, such as the one proposed by supply-side economist Arthur Laffer, would bring in good money. But not enough to fund the Democratic spending machine.
The GOP must preempt this with a spending-cap approach that will maintain low tax rates and grow the economy. They must show voters that they’re moving back home to small government.
