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CORY GARDNER ON HIS VICTORY LAST FALL: “I think voters are searching for a positive message”

May 2015 Volume 49, No. 2

U.S. Rep. Jack Kemp meets with Ronald Reagan and members of his economic team in September 1980

HOW CONGRESS SHAPED THE ‘80 CAMPAIGN by Lou Cannon

Plus: How today’s Congress can shape the campaign next year, with essays by Dave Camp, Mike Rogers and others www.riponsociety.org

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“Ideas that matter, since 1965.“ Volume 49, Number 2

Cover Story

Cover Story (cont’d)

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How Congress Shaped the ‘80 Campaign By Lou Cannon Ronald Reagan changed the nation’s economic course as President, but the seeds of this achievement were rooted in a House member’s bold attempt to broaden Republican appeal at a time when Democrats controlled Congress.

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Develop a Governing Agenda with Targeted Health Care Reform. By Tevi Troy By taking positive steps in health care and other key areas, the GOP Congress can show that it has a hand in crafting the 2016 agenda, rather than simply reacting to it.

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What America Wants By David Winston Congressional Republicans can’t wait for the party’s presidential standard bearer to offer up a policy agenda, especially when the crowded field means the nominee may not be apparent until long into the process.

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Help Enterprises Become More Productive, Innovative and Competitive By Robert D. Atkinson The U.S. economy faces a host of challenges which demand a bold approach to economic policy focused on helping enterprises become more productive, innovative and competitive.

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How Congress Can Shape the Campaign...

Politics and Perspective

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Take the Lead in Keeping America Secure By Mike Rogers At a time when America’s position in the world is shifting beneath us, it’s up to Congress to seize the initiative and turn back the growing number of threats we face around the globe.

2016

Advance Meaningful Tax Reform By Dave Camp Just as the Kemp-Roth tax plan helped fuel Ronald Reagan’s victory in 1980, the current GOP Congress can impact the 2016 elections through the tax reform effort now underway in the House & Senate.

Publisher The Ripon Society

Editor Louis M. Zickar

President Jim Conzelman

Deputy Editor Jarrad Hensley

Editorial Board Thomas Tauke Michael Castle Michael Oxley Billy Pitts Pamela Sederholm Judy Van Rest Jim Murtha

Editorial Assistant Stephen Jackson

© Copyright 2015 By The Ripon Society All Rights Reserved

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What Every Candidate Should be Asked in 2016 By Tom Coburn

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The Roots of Ripon Republicanism By Lee Huebner

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Red Governors in Blue States By Jared Meyer

Sections 3

In this Edition

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News & Events

32

Ripon Profile - Senator Cory Gardner

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RIPON FORUM May 2015

Comments, opinion editorials and letters should be addressed to: The Ripon Forum, 1155 15th Street, NW, Suite 550, Washington, DC 20005 Or emailed to the Editor of The Ripon Forum at louzickar@riponsociety.org. In publishing this magazine, The Ripon Society seeks to provide a forum for fresh ideas, well-researched proposals, and for a spirit of criticism, innovation, and independent thinking within the Republican Party.


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THE RIPON SOCIETY HONORARY CONGRESSIONAL ADVISORY BOARD U.S. Senators: Shelley Moore Capito - Senate Co-Chair Cory Gardner - Senate Co-Chair Roy Blunt Richard Burr Bill Cassidy, M.D. Susan M. Collins Orrin G. Hatch Pat Roberts U.S. Representatives: Pat Tiberi - House Co-Chair Renee Ellmers - House Co-Chair Martha Roby - Vice Chair, South Erik Paulsen - Vice Chair, Midwest Bill Shuster - Vice Chair, Northeast Greg Walden - Vice Chair, West Diane Black Marsha Blackburn Charles Boustany Vern Buchanan Michael C. Burgess, M.D. Ken Calvert Tom Cole Ander Crenshaw Rodney Davis Jeff Denham Charlie Dent Sean Duffy Rodney Frelinghuysen Chris Gibson Kay Granger Sam Graves Richard Hanna Darrell Issa Lynn Jenkins Dave Joyce Mike Kelly Adam Kinzinger Leonard Lance Frank Lucas Tom Marino Kevin McCarthy Cathy McMorris Rodgers Patrick Meehan Candice Miller Randy Neugebauer Kristi Noem Tom Reed Jim Renacci Reid Ribble Peter Roskam Steve Scalise Aaron Schock John Shimkus Lamar Smith Steve Stivers Glenn Thompson Mac Thornberry Mike Turner Fred Upton Edward Whitfield Steve Womack Members of Congress (Retired): Bill Archer Henry Bonilla Michael Castle Geoff Davis Mike Ferguson David Hobson Nancy Johnson Sue Kelly Scott Klug Bob Livingston Jim McCrery Robert H. Michel Susan Molinari Don Nickles Michael G. Oxley Bill Paxon Deborah Pryce Tom Reynolds Tom Ridge Gordon Smith Don Sundquist Tom Tauke Robert S. Walker

In this Edition

After Republicans won control of Congress last November, there were a number of stories written about what the new majority might achieve in the coming year. While there were differences of opinion about the policy proposals that might be pursued, there was a general consensus that the GOP didn’t have much time to act. As Kristina Peterson wrote in the Wall Street Journal the day after the election, “Republicans in the House and Senate will have a limited window to try to pass legislation before their efforts are overshadowed by the 2016 presidential campaign.” Peterson’s story typified the analysis at the time, and was based on recent campaigns which saw the nominees of both parties set the agenda while Congress faded into the background of the debate. With the first presidential debate set for August 6th, many Republicans are now wondering whether history will repeat itself again. Will the House and Senate become passive bystanders and watch the political focus shift to the campaign trail? Or will the GOP Majority defy history by shaping the agenda on Capitol Hill? Precedent exists for them to do just that, and in this latest edition of The Ripon Forum, we not only look at that precedent, but examine areas where Republicans have the opportunity to seize the initiative today. Leading our coverage is award-winning journalist and author Lou Cannon. As Cannon writes in our cover essay, in 1980 then-candidate Ronald Reagan embraced a plan authored by U.S. Rep Jack Kemp and U.S. Sen. William Roth to cut tax rates across-the-board. The KempRoth tax plan became the economic centerpiece of Reagan’s victorious campaign and helped define the first two years of his presidency. According to Cannon, it could also serve as an example for Congressional Republicans today. Veteran strategist David Winston agrees. Pointing to data which reveals that voters want Congress to propose policies to improve the economy rather than oppose President Obama, Winston argues in another essay that Congressional Republicans can shape next year’s debate by putting forward their own agenda this year. “If the 2010 and 2014 elections taught us anything,” he writes, “it is that in this political climate, you win elections by winning issues.” We look at several of these issues with essays by some of Washington’s leading thinkers and policy entrepreneurs, including former Ways & Means Chairman Dave Camp, who offers his expert analysis about tax reform and how Congress can impact the debate heading into next year, and former House Intelligence Committee Chairman Mike Rogers, who shares his thoughts on how the GOP Majority can do the same on national security. Joining Camp and Rogers with essays on the topic are former Deputy Health and Human Services Secretary Tevi Troy, who writes that Republicans need to develop a governing agenda that includes “targeted health care reform,” and, Robert Atkinson, who serves as President of the Information Technology & Innovation Foundation and argues that the GOP Majority should look for ways to “help enterprises and high-growth start-ups become more productive, innovative and competitive.” Also featured in this latest edition of The Ripon Forum is former Senator Tom Coburn, who writes about the effort he is supporting to convene a Conference of States “to return the country to its original vision of a limited federal government.” Continuing our yearlong commemoration of the Forum’s 50th anniversary, former Ripon Society President Lee Huebner writes about the founding of the Society and how one of the group’s organizing principles was “the advancement of Civil Rights.” Also, Jared Meyer of the Manhattan Institute looks at three first-term GOP governors presiding over blue states and explains why tax reform might be the key to their success. And in our latest Ripon Profile, freshman Senator Cory Gardner discusses the key to his victory last fall and what voters are looking for from Washington, DC. As always, we hope you enjoy this edition of the Forum, and encourage you to contact us with any thoughts or comments you may have. Lou Zickar Editor of The Ripon Forum louzickar@riponsociety.org RIPON FORUM May 2015

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Cover Story

U.S. Rep. Jack Kemp meets with Ronald Reagan and members of his economic team in September 1980

HOW CONGRESS SHAPED THE ‘80 CAMPAIGN by Lou Cannon

Ronald Reagan changed the nation’s economic course during the first two years of his presidency, but the seeds of this achievement were rooted in a House member’s bold attempt to broaden Republican appeal at a time when Democrats held solid control of Congress. In 1977, Jack Kemp was a fourth-term member of the House from an industrial Buffalo, NY, district that had long been Democratic. Kemp, a quarterback with the Buffalo Bills before entering politics, was popular with blue-collar constituents, who otherwise tended to be suspicious of Republicans. Unemployed workers in hard-pressed Buffalo needed jobs, while businesses 4

struggled to keep afloat. Kemp wanted a more uplifting message than austerity. He found it in the advocacies of political economist Jude Wanniski, an apostle of the emerging movement of supply-side economics. Wanniski convinced Kemp that substantial income tax cuts would spur lagging economic growth. Partnering with Sen. William Roth, a Delaware Republican, Kemp introduced a bill to reduce income taxes 10 percent a year for three years. It quickly became known as “Kemp-Roth.” Supply-side economics envisioned a world stripped of tax preferences, economic regulations and subsidies that were strangling capitalism. Reagan, economically

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literate, did not at first embrace the supply-side first order of business as president was to propose the argument—indeed, it can be argued that he never Economic Recovery Tax Act of 1981, much of which embraced all of it—but he was a thoughtful politician was based on Kemp-Roth. who wanted to attract working-class Democrats, as Getting the bill through a House of Representatives he had done when twice winning the governorship of controlled by the opposition wasn’t easy. Reagan was California. buoyed by an outpouring of public support after he Reagan also knew that anti-tax fervor was on the showed wit and courage when wounded by a wouldrise, manifested in 1978 by voter approval in California be assassin’s bullet on March 30. Still, it took another of Proposition 13, a far-reaching tax limitation measure. three months of persuasion and maneuvering to move the Reagan was 68 years old that year and girding for a Reagan tax and budget bills through the House. Every third try at the presidency. He had run uncertainly in Republican member voted for the Reagan program. 1968. But in 1976, he had demonstrated mass appeal Southern Democrats then known as Boll Weevils when he almost snatched the nomination from Gerald R. joined in support after Reagan promised he would not Ford, a sitting president, over the solid opposition of the campaign against them in 1982 if they voted for both his Republican establishment. Looking forward to 1980, tax and budget bills. The tax measure reduced income many dismissed Reagan as too old or too ideological. tax rates by 23 percent over three years and dropped the But Reagan was optimistic top marginal rate from 70 both about his prospects and percent to 50 percent. It Ronald Reagan changed the future of the country, also cut corporate taxes and, which was suffering from in another borrowing from the nation’s economic course economic maladies and what Kemp-Roth, indexed tax during the first two years of his President Jimmy Carter said rates for inflation. was “a crisis of confidence… Nonetheless, recession presidency, but the seeds of this that strikes at the very heart arrived in July 1981. Reagan achievement were rooted in a and soul of our national then turned to a traditional House member’s bold attempt to remedy espoused by Paul will.” Several of Reagan’s A. Volcker, the chairman of broaden Republican appeal at a advisers were not thrilled by the Federal Reserve Board, time when Democrats held solid who proposed to strangle supply-side economics. They cautioned about deficits and inflation by reducing the control of Congress. worried that supply-siders money supply and forcing might be overstating the up interest rates. Volcker, a impact of tax cuts on economic growth. George H.W. Wall Street banker, was a Democrat appointed by Carter, Bush, opposing Reagan for the presidential nomination but to the surprise of many he and Reagan were on the in 1980, famously described the supply-side nostrum as same wave length. Carter had pressured Volcker to impose “voodoo economics.” credit controls, which failed and were scrapped. Reagan Reagan was not deaf to these concerns, but he told Volcker to do what he thought right. Volcker’s realized that Kemp-Roth offered to expand the economic strategy worked at the cost of increased joblessness and pie, rather than just dividing it differently. He decided plummeting approval ratings for the president. Reagan this might attract the working-class Democrats he paid no heed. The worse the recession became the more prized. President John F. Kennedy had in 1963 proposed he vowed to stay the course. a tax cut to jump start a languishing economy. “A rising The recession ended too late to help Republicans in tide lifts all boats,” Kennedy often said. Reagan began the 1982 midterm elections, in which the GOP lost 26 quoting these words. House seats. But this was relatively modest by historical After winning the nomination and unifying the standards, and Reagan shrugged off the losses. He had Republican Party by putting Bush on the ticket, Reagan noticed the economy was improving. As it did, Reagan defeated Carter in an electoral landslide with sufficient said wryly, “They don’t call it Reaganomics anymore.” coattails to give Republicans control of the Senate. Ultimately, as Kemp observed, the combination of Democrats maintained a majority in the House, as they supply-side tax cuts and Volcker’s old-fashioned tightwould throughout the Reagan presidency. money remedy achieved an enduring turnaround. The When Reagan took the oath of office on January Reagan recovery that started in November 1982 lasted 20, 1981, the United States was suffering double-digit to July 1990, when Bush was in the White House. The inflation, with the Consumer Price Index registering economy grew a third. The stock market almost tripled 13.5 percent for 1980. The prime rate, the lowest rate in value. Nearly 20 million new jobs were created. The for commercial borrowing, was 21 percent. Reagan’s unemployment rate, 7.6 percent when Reagan took office RIPON FORUM May 2015

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and 9.7 percent at the height of the recession, dropped in the White House can lay down markers for what it to 5.3 percent. The inflation rate was 13.5 percent when will do if it regains executive control. Carter was as Reagan was elected and 4.8 percent when he left office— unpopular with Republican members of Congress as and continued to fall. It is a President Obama is today, durable Reagan legacy, for but Kemp-Roth was not annual inflation has never a slam at the president. risen above 3.8 percent from Instead, it was a thrust into 1992 to the present day. the future, a plan on which Kemp-Roth, little more to build. than a footnote to many To be sure, partisan present-day historians, lines are more rigid now had paved the way for this than they were in 1981. But remarkable recovery. For voters still value leadership. one thing, it accustomed They still want to know Congress to discussing tax what a party stands for, Lou Cannon cuts. For another, Kempnot just who it is against. Roth attracted crucial Kemp-Roth is a constructive Kemp-Roth showed that a party out bipartisan support, notably example for Republicansof power in the White House can lay from Sen. Bill Bradley, -or indeed for any party Democrat from New Jersey. out of power that seeks to down markers for what it will do if Like Kemp, he was a former regain the confidence of the it regains executive control. athlete, in Bradley’s case American people. RF a basketball star with the New York Knicks. Like Kemp, Bradley believed that Lou Cannon spent over 25 years covering Ronald Reagan tax cuts would lead to economic growth. as a reporter for the San Jose Mercury News and The Is Kemp-Roth a model for the present Congress? Washington Post, and is the author of five books on the Perhaps. Kemp-Roth showed that a party out of power late President’s life.

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What America Wants…

A plan to bring America back – now! DAVID WINSTON There’s a quiet debate going on in Washington over products. They want leadership that offers more than the role Republicans in Congress should play in the 2016 platitudes. They want real world solutions that address presidential election. It goes something like this. One side the issue that matters most to them: jobs and the economy argues that Hill Republicans should leave a faint legislative – still the top priority for Republicans (contrary to what footprint so as not to risk running afoul of the eventual GOP some pundits are claiming), Democrats and Independents. presidential nominee’s agenda. Better to be cautious in 2015 Americans today are clearly frustrated. In fact, polls rather than stuck in an internal party conflict a year from now. show this may be the longest stretch that people have held The other side, of which I am a proponent, argues that a negative view on where the country is heading since if Hill Republicans can keep we began measuring the focus on jobs and the this important indicator. economy through legislative It’s understandable why and policy initiatives, voters are down on the especially in these crucial direction of the country. months before the GOP The economy continues presidential nominee is to sputter along with chosen, the party has a huge slow job creation and opportunity to expand its growth, due to policies majority coalition for the put into place in 2009-10 foreseeable future. And that that severely hampered kind of positive environment the private sector. is good for the nominee The 2010 election whoever he or she may be. made a difference as Moreover, if Republicans have begun Republicans take a reactive to move the country in a approach, they do little more more positive direction. than give Hillary Clinton Since December 2010, David Winston and her supporters an 10.6 million jobs have unfettered ability to define been created, the US If Hill Republicans can keep the focus the political agenda for the has become the number on jobs and the economy through next year. This election, one energy producer we can’t wait for the party’s in the world, and the legislative and policy initiatives, presidential standard bearer deficit has been cut in especially in these crucial months before to offer up the GOP policy half. This was the result the GOP presidential nominee is chosen, agenda, especially when of keeping most of the the crowded field means 2001 and 2003 tax cuts the party has a huge opportunity to the nominee may not be in place, creating a more expand its majority coalition for the apparent until long into the positive legislative and foreseeable future. process. regulatory environment A post-convention issue for energy expansion, strategy simply doesn’t work in today’s news environment, and bringing some fiscal discipline to government dominated by social media and 24/7 real time political spending. coverage or with an impatient electorate that wants America There is a lot more that needs to be done before voters to work again. are satisfied, but that progress gives Republicans the People want politicians of both parties to stop the blame opportunity to make a strong case to voters now: Think game and give them better value through better policy how much worse the last four years could have been with RIPON FORUM May 2015

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a Democrat-controlled House and think how much better As Keynesian theories failed to address an economy in it can be with a Republican president and a Republican near free-fall, candidate Ronald Reagan proposed a totally Congress working together to turn the country around. different economic approach called “supply side” economics. The voter’s clear choice on the approach Republicans in Armed with this reinvigorated economic argument, he went Congress should take was evident in the New Models 2014 on to decisively win the election and his reelection four years post election survey, as 71% said Republicans should be later. proposing policies to improve the economy, while only 23% President Reagan’s economic plan led to a remarkable said they should be a check and balance on President Obama. comeback. At one point, his policies generated four straight But that approach will only be successful if Congressional quarters of 8% growth or higher (the 2nd quarter of 1983 Republicans focus on trying to move forward now, developing through the 1st quarter of 1984.) And while Reagan didn’t policies that address the country’s challenges and showing invent the concept, he wisely adopted it. voters the positive impact But who planted a Republican economic the legislative seeds agenda can have on that would eventually people’s lives. become Reagan’s great Without a proactive economic turn around? economic policy House Republicans five agenda or a presidential years earlier. In 1975, candidate to espouse a U.S. Rep. Jack Kemp national agenda, we risk (NY-38) authored letting Democrats and the legislation called the media control the issue Jobs Creation Act that debate. Republicans was the precursor to need to get into the game supply side economics on better turf and that legislation. means talking in specifics Then, on February about how we will bring 23, 1977, U.S. Rep. Shelley Moore Capito celebrates her historic victory last November, when the economy back and John Rousselot (CAshe became the first woman elected to the Senate from West Virginia. help create the jobs that 26) offered a budget go with real recovery. substitute that changed If Congressional the economy policy If the 2010 and 2014 elections taught Republicans can keep the direction of the us anything, it is that in this political focus on the economy for Republican Party. the next 12 months, we This substitute would climate, you win elections by will have a huge strategic eventually become the winning issues. advantage because basis for the historic despite the election of Kemp-Roth tax cut Barack Obama twice and a constant drumbeat on the Left proposal, which drove the economic rebound of the 1980’s. for a European style economy, this remains a center right The lesson learned? While presidential primary politics country, unshaken in its belief that economic growth is still are playing out over the next 12 months, Congressional the answer to most of our problems. Republicans can help create a winning general election Still, the argument over whether a Republican- environment by legislating a dynamic growth agenda, an controlled Congress can make a difference in the presidential actionable agenda on issues people care most about. In contest goes on. History, however, is on the side of those doing so, they can also put the party and eventual nominee who believe in the ability of House and Senate Republicans on a path to a majority coalition. to make a big difference in what may be the election of a If the 2010 and 2014 elections taught us anything, it is generation. It shows us that congressional Republicans can that in this political climate, you win elections by winning help lay the groundwork for a presidential win, in the years issues. What do Americans want? A plan to bring America leading up to the 1980 election to be exact. back – not next July in Cleveland but starting now. RF In the late 1970’s, under President Jimmy Carter, the US economy was struggling through a similarly difficult period. David Winston is the president of The Winston Group, a In the 1976 presidential race, Carter defined the state of the strategic planning and survey research firm. He has served economy by using a “misery index” based on the inflation and as a strategic advisor to the Senate and House Republican unemployment rates. In his reelection campaign, however, leadership for the past 10 years, and was formerly the Director Carter found the phrase turned on himself. of Planning for Speaker of the House Newt Gingrich. 8

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How Congress Can Shape the 2016 Campaign…

Advance Meaningful Tax Reform DAVE CAMP

Elections focus on the real life concerns of the Presidential election. But in the meantime, they do not American people. For most Americans today, the believe we wait until 2017 to take steps to promote a strength of the US economy is a top concern. That stronger US economy. was true in 1980 when Ronald Reagan made reducing Accordingly, they are seeking to find common tax rates to promote a stronger economy a central part ground on business income tax reform, which will of his campaign message. It remains true today when lower the US corporate tax rate – now the highest in the Americans are apprehensive about the lack of jobs and world – and provide effective tax rate relief for “passstagnant wages – wages that Americans depend on to through” businesses whose owners are subject to the pay their mortgage and put individual tax rates. their children through school. The narrowing of the scope The current effort to of near-term tax reform efforts advance meaningful tax reform may well make legislative is all about strengthening action this year more likely. the US economy, making US In a recent joint letter, the two companies more competitive chairmen have asked taxpayers in the global marketplace, and to submit tax reform ideas by making the tax code simpler May 31 of this year. and fairer for individuals. Just Chairman Ryan and as the tax proposals of Rep. Chairman Hatch are Jack Kemp and Senator Bill demonstrating to the American Roth contributed to President people that a RepublicanReagan’s successful campaign, led Congress will take the current Republican-led action to strengthen the U.S. Congress has an opportunity economy and to facilitate the to have a significant impact creation of better paying jobs. on the 2016 elections with the Communicating to the general tax reform effort underway in public these Republican The current Republican-led the House Ways and Means initiatives, as well as Congress has an opportunity explaining the benefits Committee and the Senate of tax to have a significant impact Finance Committee. The reform, will help this become results of that effort could on the 2016 elections with the a winning Republican issue in help shape the campaign for advance of the 2016 elections. tax reform effort underway in a Republican candidate to In recent years, tax reform win the White House and for has progressed from just a the House Ways and Means Republicans to increase their handful of us talking about it, Committee and the Senate majorities in the House and to one of the dominant issues Finance Committee. the Senate. being debated in Washington Ways and Means and around the country. Chairman Paul Ryan and Joining that debate have been Finance Chairman Orrin Hatch recently reaffirmed their a large number of coalitions representing job creators commitment to comprehensive, revenue neutral tax who understand the importance of more and better jobs reform to benefit families and businesses of all kinds. at home and the need for the United States to compete in They said that because President Obama is unwilling to a global economy. In addition, numerous Congressional reduce individual statutory tax rates, some aspects of hearings, bipartisan working groups, discussion drafts, tax reform may have to be deferred until after the 2016 and white papers are serving to lay a solid foundation 10

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At the same time, Chairman Ryan and Chairman for tax reform. As Chairman of the Ways and Means Hatch are sending a clear message that Republicans are Committee, I developed and released a comprehensive committed to comprehensive tax reform that lowers tax proposal to overhaul the tax code for the first time rates for both companies and individuals. Simplifying since 1986 that reflects the years of work undertaken our complicated tax code and lowering the tax burden on this critical issue. for both businesses and American families will spur job Chairman Ryan and Chairman Hatch are now creation and improve continuing the effort the economic security to reform our tax code. Simplifying our complicated of all Americans. This While we don’t know is a positive message whether they will tax code and lowering the tax burden that a Republican complete the first phase for both businesses and American presidential candidate of comprehensive tax can run on and win the reform in 2015, no families will spur job creation and White House in 2016, one should doubt their improve the economic security just as Ronald Reagan commitment to the of all Americans. did in 1980. RF cause. A good sign of this can be seen in the Senate where Chairman Former House Ways and Means Chairman Dave Camp Hatch and Ranking Member Ron Wyden have led (R-MI) is currently a Senior Tax Policy Advisor to Finance Committee members, both Republicans and PricewaterhouseCoopers. The views expressed are his Democrats, to discuss tax reform issues in bipartisan own and are not offered on behalf of PwC or any client working groups, which is an approach I used very of the firm. effectively in the House.

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How Congress Can Shape the 2016 Campaign…

Take the Lead in Keeping America Secure MIKE ROGERS

fact, Saudi Arabia recently entered into a $2 billion, 20 year agreement with South Korea to explore the Strategically speaking, we are ceding ground to construction of two nuclear reactors. the Chinese, Russians, Iranians, and to terrorists. All The UAE is now questioning whether it wants of this has a negative impact on our future. to continue to abide by the 123 Program and Jordan Congress can take some important steps this year has entered into a nuclear deal with Russia.  These to turn back this dangerous are the real consequences of trend threatening America’s sliding away from the original leadership role in the world. objective to prevent Iran from A good start would be an becoming a nuclear power. Authorization for the Use of As for China, the U.S. just Military Force (AUMF) and signed off on selling dualrenewal of the PATRIOT Act use nuclear technology to the to defeat ISIS.  ISIS should Chinese that could provide be confronted with a unified them with quieter ballistic military, diplomatic and legal missile submarines, making strategy that does justice to them harder to track, thus the threat ISIS is: a terrorist shifting the balance of power.  organization with territory The Chinese are pushing the and an army hell-bent on our U.S. and our allies out of the destruction. South China Sea, through Congress should also which 40% of the world’s reject the proposed nuclear trade travels.  And they deal with Iran in order to have taken aim at America’s prevent a highly destabilizing dominance of space, upending Strategically speaking, we are the nuclear and conventional arms previously benign race in the Middle East.  The environment by fielding ceding ground to the Chinese, proposed deal with Iran does missiles capable of destroying Russians, Iranians, and to nothing to stop weaponization satellites. terrorists.  All of this has a or missile development, two Congress can push back of three critical elements on these and other Chinese negative impact on needed to become a nuclear aggressions through the our future. armed power.  As the world’s appropriations and defense most prolific state sponsor of authorization process. terrorism, I can only imagine Finally, the Chinese and the kind of trouble that Iran’s Quds Force would create Russians are eating our lunch in cyberspace.  Not only for the United States and our allies with the security a are they stealing staggering amounts of intellectual nuclear umbrella provides.     property and sitting on our critical infrastructure Unfortunately, Iran is just one player in a greater and financial services networks, they are working to proliferation problem.  The potential for a deal there create a new Internet – one that they control.  These has sparked nuclear interest from Turkey, Egypt, two authoritarian nations have formally agreed not to Jordan, the United Arab Emirates and Saudi Arabia.  In hack each other and to cooperate on technology that us.

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America’s position in the world is shifting beneath

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can stifle dissent and oppression against their own Congress also needs to weigh in on Chinese and people. Russian efforts to manipulate control of the Internet President Obama’s recent Executive Order that at the United Nations. They are doing this to improve would create a sanctions regimen against foreign their position – at our expense. hackers is an important start, but much more must Congress can take the lead on each of these be done on cybersecurity.  important national security Creating instantaneous, priorities this year.  Doing so voluntary sharing of malicious would improve our standing Congress can take some code between the government in the world today and provide important steps this year to and private sector is a critical a better future for the next first step in protecting this turn back this dangerous generation of Americans. RF nation’s lifeblood: private trend threatening America’s industry.  Right now the leadership role in the government is legally unable Mike Rogers is the former to notify companies of Chairman of the House world. impending attacks or malicious Intelligence Committee. He code and programs sent to is currently the host of a infiltrate their networks. nationally-syndicated talk Legislation passed in the House and pending in the show on Westwood One. He also serves as Honorary Senate would create such a common sense program.  Chairman of Americans for Peace, Prosperity and This is an easy fix that will save intellectual property Security, and as a Distinguished Fellow at the Hudson and the American jobs that come with it. Institute.

RIPON FORUM May 2015 Job Number Publication

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How Congress Can Shape the 2016 Campaign…

Develop a Governing Agenda with Targeted Health Care Reform TEVI TROY

The current Congress is less than a year old, and an important signal that there is congressional support to already it is clear that the new GOP majority will have take on these tough problems. a tough time passing its agenda, let alone overcoming On the health front, President Obama is too committed presidential vetoes to any laws that should happen to pass. to his Affordable Care Act to sign any significant and Such an unfortunate circumstance does not, however, worthwhile changes while he remains in office. The mean that this Congress cannot GOP, however, can begin to have an impact. Even without show how it would deal with the the ability to pass ambitious consistently unpopular ACA by new laws, the GOP Congress proposing targeted reforms to has a real opportunity to shape some of the ACA’s worst and the agenda heading into the most unpopular provisions. One 2016 election and beyond. place to start is with the Medical Lou Cannon has shown Device tax, an unnecessary tax elsewhere in this edition that discourages one of our most of The Ripon Forum how innovative industries. There is Congress helped shape the already bipartisan opposition 1980 campaign. This Congress to this tax, even coming from can do something similar by liberal Senators such as Al establishing a governing agenda. Franken, Amy Klobuchar, Such an agenda would have to and Elizabeth Warren (it is no include three main components: coincidence that these Senators responsible budgeting, health represent states with robust care improvements, and a suite medical device industries). The Tevi Troy of high-tech proposals to get bipartisan opposition to the our economy moving. tax provides a real opportunity On the budget front, our to get a repeal to President The GOP can begin to show national debt of $18 trillion is Obama’s desk. The likelihood how it would deal with inexcusable. While the annual remains that he would veto it, deficit has decreased in recent but such a veto would allow the consistently unpopular years – thanks in large part to a 2016 presidential candidates ACA by proposing targeted GOP House reining in President to tout the fact that they would reforms to some of the ACA’s sign such a provision should Obama’s spending excesses – the debt itself is continuing to they have the opportunity to do worst and most unpopular grow. When you add in long so. provisions. term unfunded entitlement A similarly unpopular liabilities, the situation is even provision is the high cost health more worrisome. The GOP plan excise tax, also known as can and should use its control of both Houses to pass the Cadillac Tax. Like the Alternative Minimum Tax, responsible budgets that establish some kind of glide path this tax, which was sold as one targeted to just high cost towards long term debt reduction and entitlement reform. plans, will increasingly be hitting millions of middle The biggest and boldest steps in this regard must be taken class taxpayers in the years ahead. By the year 2031, by a willing president, but a GOP Congress can provide for example, the Cadillac tax will be hitting the average RIPON FORUM May 2015

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value family health plan. As with the device tax, there is them. These voters want to hear that the GOP has a also bipartisan support for getting rid of this tax. Unions plan for revitalizing our economy and taking advantage dislike the tax as it affects hard fought benefit gains, and of America’s comparative advantage in the area of state and local officials dislike the fact that it applies to technology. Other components of such an agenda could their employees as well. Once again, getting such a bill to include supporting free trade and improving our K-12 President Obama’s desk, even education system by having if he vetoes it, gives the new dollars follow children, rather president another bipartisan than trapping poor kids in nonBy taking these steps, the item to sign into law shortly performing schools. GOP Congress can show after taking the oath of office. By taking these steps, the that it has a hand in shaping GOP Congress can show that it These actions can have another advantage as well. has a hand in shaping the 2016 the 2016 agenda rather than The GOP has been bleeding agenda rather than reacting to reacting to it. young and highly educated it. If these reforms become law, voters in recent elections. they will make things better and Part of the reason for the poor easier for both the next president showing has been the lack of a positive agenda to and for the American people. If, however, they are stopped appeal to tech-savvy voters, such as scientists, hi-tech by President Obama’s veto pen, they can still have an workers, doctors, and even some professors (mainly impact by shaping the contours of the 2016 race. RF those in the hard sciences.) A responsible budget and a pro-innovation tax cut such as the device tax Tevi Troy is President of the American Health Policy repeal can have some appeal among these voters who Institute and a former Deputy Secretary of Health & think that the standard GOP agenda has little to offer Human Services and Senior White House aide.

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How Congress Can Shape the 2016 Campaign…

Help Enterprises Become More Productive, Innovative and Competitive ROBERT D. ATKINSON

Notwithstanding America’s tepid economic recovery, need to stand not with incumbents but with innovators. the U.S. economy faces a myriad of structural challenges. Congress could require the Federal Trade Commission Productivity is growing at 40 percent the rate of a decade to produce an annual report on state laws and regulations ago. New business formation is at its lowest levels in that unfairly protect incumbents against digital innovators. 30 years. Despite the improvement in our energy trade Another key area is to open up higher education to disruptive balance, the U.S. trade deficit remains high at over $400 innovation. Florida Senator Marco Rubio has proposed billion. Business is investing less in basic and applied several ideas to open up higher education including better research. And U.S. firms reporting of student outcomes face tough challenges as they by institution, making it easier compete against mercantilist to earn college credits with free state capitalist systems. online courses, and reforming These problems call out for a the college accreditation process. new, bold approach to economic Hopefully, the Senator will also policy focused first and foremost campaign on these ideas now on helping enterprises and highthat he is a candidate for the growth start-ups become more White House. productive, innovative and Of course, there are many competitive. To paraphrase Bill other regulatory steps. Given Clinton’s campaign slogan, “It’s that Federal Communications the enterprise, stupid.” And not Commission wants to regulate just any enterprises: technologybroadband like 20th Century based, global, and fast growing telephone service, it’s not enterprises are the key. This too early for Congress to focus should be the north star begin the rewrite of the 1996 of Republican economic policy. Telecommunications Act, Robert D. Atkinson Congressional Republicans including provisions to not can play a key role in this by regulate broadband like phone To paraphrase Bill Clinton’s promoting legislation over the service. next year that a GOP presidential Congressional Republicans campaign slogan, “It’s the candidate can run on in 2016. can also modernize our overall enterprise, stupid.” And This will require action in a regulatory system. One place not just any enterprises: number of key areas, including to start is the Start Up Act (H.R. improving the tax and regulatory 962 and S. 181). Introduced by technology-based, global, climate for productivity, Congressman Robert Dold (ILand fast growing enterprises innovation and competitiveness 10) and Senator Jerry Moran and ensuring that we step (KS), the bill would require are the key. up actions against foreign the Office of Management “innovation mercantilism.” But and Budget to incorporate it will also require Republicans to support the right kind of a screen for new business formation in its review of public investment to help spur innovation. federal legislation. But legislation should go beyond Let’s start with regulation. One key barrier to innovation that and require OMB to include a review of impacts on is incumbent opposition to change. Taxi companies fight competiveness and innovation as ITIF has proposed. Uber. Universities resist MOOCS (massively open online Republicans should also continue to push for STEM courses). Realtors resist online competition. Republicans worker immigration reform. It makes no sense to not welcome RIPON FORUM May 2015

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the world’s best scientists and engineers to our shores. Not only do we need the talent, but by welcoming them here we deprive our competitors of this key resource. Here, too, the Start Up Act would be of value. The measure would allow up to 50,000 foreigners who earned a master’s or doctorate degree in a science, technology, engineering, or mathematics field to remain in the U.S. indefinitely if the person is engaged in a STEM field. Republicans can also help drive productivity, innovation and competiveness with reform of the tax code. Although some advocate that the tax code be completely neutral with regard to business behavior, Republicans should want the tax code to favor innovation and new investment. Toward that end they can support overall corporate tax reform that not only lowers corporate rates but expands two key investment incentives, the R&D tax credit and the modified accelerated credit recovery system (MACRS). For example, S.537 , offered by Senator Pat Toomey (PA), would increase the R&D tax credit from 14 percent to 25 percent. Doing this would move America from having the 27th least generous R&D credit in the world to 12th. Finally, creating policies to help the private sector drive productivity, innovation, and competitiveness will require a new look at public investment, particularly scientific research. In their focus on cutting the national debt, Republicans shouldn’t be increasing the future “investment debt.” To that end,

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Congress should follow the lead of Senators Lamar Alexander (TN), Ron Johnson (WI) and Moran, who have supported increasing funding for basic research. As Newt Gingrich writes with respect to increasing NIH funding, increased investment in research can “transform our fiscal health.” But we need to go beyond just basic research to helping spur commercialization. One idea is to pass legislation cosponsored by Senator Lindsey Graham (SC) to create a system of national “manufacturing universities” that would commit to doing more research and teaching related to manufacturing issues. Likewise, Congressman Hultgren (IL) and Senator Rubio have proposed legislation (called the America Innovates Act) to modernize the Department of Energy labs to make them more effective engines of technology commercialization. In summary, there is no shortage of ideas for ensuring that American enterprises can be more productive and competitive. The question is whether a Republican – be it Senator Rubio, Scott Walker, or another candidate for President -- will run on these ideas as part of their platform next year. If they do, they will not only be running on a platform of innovation and reform. They will also be running on a platform that will help them win. RF

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Politics & Perspective

What Every Candidate Should be Asked in 2016

“Do you support the Convention of States?” TOM COBURN In 1984, Ronald Reagan assured us he wouldn’t done in Washington, DC, Congressmen and Senators can exploit Walter Mondale’s “youth and inexperience.” In only do so much. I saw from the inside that Washington, 1988, Lloyd Bentsen declared Dan Quayle was no Jack DC was never going to fix itself. Instead of remaining in Kennedy. In 1992, George H. W. Bush checked his watch, the bureaucratic morass that is the federal government, I and Admiral Stockdale asked “Why am I here?” In 2000, thought it was important to work on something that could Al Gore sighed. actually save the republic. Something that could work. For concerned citizens across America, a Presidential When I announced my retirement, I said, “As debate is the Super Bowl dysfunctional as of politics. Millions tune Washington is these days, in as the candidates line up change is still possible on stage, shirts starched, when ‘We the People’ shoes shined. How will our get engaged.” Well, the Presidential candidates Founders gave the people brand themselves? What a way to engage in a way “gotcha” topics will the that could actually change moderator bring up? What things. Keen observers fights will break out? of human behavior, Over the years, the the Founders knew the same topics seem to come day would come when up repeatedly. Entitlements. the government would Debt. That wall that never become so bloated and quite seems to get built. drunk with power that But there’s one topic that they wouldn’t restrict will come up in next year’s themselves. That’s why presidential campaign that they slipped something will be new. Well, it’s really into Article V that would As much work as I’ve done in not “new.” In fact, it’s such an give Americans the Washington, DC, Congressmen old concept that it is actually opportunity to rein in written in our Constitution. federal spending and and Senators can only do so Every candidate in 2016 stifle federal power grabs much. I saw from the inside will have to answer this in a way that bypasses that Washington, DC was never question: “Do you support Congress and the the Convention of States?” President. That’s why going to fix itself. For you armchair I’ve dedicated my postpoliticos watching at home, Senate life to this cause. here’s a primer: Article V allows The federal government has long overreached its citizens – through their state legislators – to call a Constitutionally-established boundaries. It’s corrupt, Convention of States to return the country to its original too big, inept, and even has started politically-motivated vision of a limited federal government, and the idea has harassment of its own citizens. For 10 years, I created gained national momentum. Three states have passed the a “Wastebook” that documented the ridiculous ways that application for a Convention of States (Georgia, Florida the government spends taxpayer money. The annual and Alaska), and in a historic first, 36 additional states have publications got a lot of attention, caused a lot of eyerolls, introduced concurrent resolutions in the 2015 session. Of and – in some cases – even caused politicians to stop course, these grassroots movements inevitably get the their wasteful expenditures. But as much work as I’ve attention of political leaders and candidates. So here we 20

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are – at the precipice of what might be the last great hope nation, undermine the legitimate authority of the states, to put America back on track.Rand Paul has already gone and steal the liberty of the people. Without an intervention, on record and said he believes Article V could be helpful future generations will be burdened with reckless debt, for Congressional term limits and a balanced budget. Sarah unable to enjoy the benefits of liberty. Palin and Mike Huckabee As Americans, we have have endorsed an Article a profound opportunity – Article V allows citizens – through V Convention. It is also I would say “duty” – to consistent with the values do more than watch the their state legislators – to call a of Marco Rubio, Ted spectacle that plays out Convention of States to return Cruz, and Scott Walker – on the political stage. In strong proponents of states Presidential debates, we’ve the country to its original vision rights – though they have seen the posturing, the snide of a limited federal government, not publicly endorsed a remarks, the good one-liners, and the idea has gained national convention.  How will and the spin. Jeb Bush respond to the Now we need to see momentum. grassroots groundswell change. The Convention of support for a limited of States gives citizens the government? power to demand it. Help me make it happen at www. Regardless of a candidate’s position just yet, every ConventionOfStates.com. RF serious politician will need to make a statement on the Convention of States. Never has our nation needed it more. Tom Coburn, MD, represented the 2nd District of Oklahoma Let’s face it. In 2016, there should be no more in the U.S. of Representatives from 1995-2001. He was “armchair politicos watching at home.” Unless citizens elected to the U.S. Senate in 2002 and served two terms, act, the federal government will continue to bankrupt this before retiring at the end of 2014.

CONVENTION OF STATES Additional background:

“Article V of the U.S. Constitution provides two methods by which the nation’s founding charter may be amended. The first, Amendment by Congressional Proposal, requires the adoption of an amendment or amendments by a two-thirds vote in both houses of Congress; the second, generally referred to as the “Article V Convention” method, authorizes the states to apply to Congress for a convention for proposing an amendment or amendments. If the legislatures of twothirds of the states, 34 at present, do, in fact, apply for a convention, Congress is obliged to convene one. Both methods then require the approval of three-fourths of the states, 38 at present, in order to become part of the Constitution…” “The first method has been used by Congress to submit 33 amendments to the states, beginning with the Bill of Rights in 1789. Of these, 27 amendments were approved by the states; 26 of them are currently in effect, while one, the 18th Amendment that prohibited the “manufacture, sale, or transportation of intoxicating liquor,” was ultimately repealed by the 21st Amendment. The Article V Convention option has yet to be successfully invoked, although not for lack of activity in the states. Three times in the 20th century, concerted efforts were undertaken by proponents of particular amendments to secure the number of applications necessary to summon an Article V Convention. These included conventions to consider amendments to (1) provide for popular election of U.S. Senators; (2) permit the states to include factors other than equality of population in drawing state legislative district boundaries; and (3) to propose an amendment requiring the U.S. budget to be balanced under most circumstances. The campaign for a popularly elected Senate is frequently credited with “prodding” the Senate to join the House of Representatives in proposing what became the 17th Amendment to the states in 1912, while the latter two campaigns came very close to meeting the two-thirds for an Article V Convention in the 1960s and 1980s, respectively.” Source: Congressional Research Service RIPON FORUM May 2015

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The Roots of Ripon Republicanism (Editor’s note: this is the second in a series of essays being published this year to commemorate the 50th anniversary of The Ripon Forum.) LEE HUEBNER “We were tired of apologizing to people on our Britain’s Bow Group, a moderate, policy-oriented affiliate campuses for being Republicans, and tired of apologizing of the UK’s Conservative party. Our central proposition to some Republicans for being on a college campus.” initially was that the country deserved two major political This was the comment that some of the founders parties with lively academic resources – and proud ties to of The Ripon Society liked to make when asked what centers of learning. And we shared a deep aversion to the prompted the launching of the organization. The remark common stereotype among young people at the time that is best understood in the context (historically) of 1962 and the Republicans were “the stupid party.” (geographically) of Cambridge, Massachusetts. It was the It didn’t have to be this way, the group believed, and height of the Kennedy we set out to prove era, and the great it by developing buzz word of the day over the next several was that the Kennedy years a series of Administration was policy proposals uniquely tapping into addressing great public the world of exciting challenges, but in new ideas. The cloud ways that emphasized hanging over the traditional Republican Republican Party was themes – including the recollection of the marketplace incentives, recent McCarthy era – private initiatives, which had widened a decentralized growing gulf between power, streamlined the country’s centers of government and learning and the GOP. broadly-based There was one set of policy concerns This was not to international that came to define and motivate the say that Republicans engagement. Over could not cite their time, most of Ripon’s Ripon Society more than any other – and own strong intellectual early agenda (revenue that was a renewed commitment to the roots; well into the sharing, welfare twentieth century, reform, a volunteer advancement of Civil Rights. in fact, the party of army, minority business Lincoln had as much enterprise, school or more support among the so-called “educated classes” as desegregation, government reorganization, affirmative did the Democrats – and that affinity had been strengthened action, a new opening to China and other initiatives) was during the Progressive Era. But the traumas of the Great reflected in the policies of the Nixon administration. Depression and two World Wars, along with the appeal But there was one set of policy concerns that came to of the New Deal and the excesses of both witch-hunting define and motivate the Ripon Society more than any other extremism and isolationist nationalism had changed older – and that was a renewed commitment to the advancement patterns of party identification. of Civil Rights. Those who first came together to launch the Ripon Among the members’ strong convictions was that Civil organization in 1962 were mostly students, recent students, Rights was a matter on which the party of Lincoln should or young faculty members – in the Boston area at first, and exercise particularly strong leadership. It was a part of then across the country. We drew on the model of Great the party’s DNA at the time, we thought, stretching back 22

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to its earliest days. It was an issue on which Democratic in 1854. The Ripon Society held one of its first public administrations through the years had been compromised press conferences there, on the grounds of the “Little by their strong dependence on southern Congressional White School House” where the Party’s leaders first and Electoral College support. Civil Rights was a cause called themselves “Republicans.” (The School House still that had been advanced in adorns the nameplate of the 1950’s by Republican The Ripon Forum.) And Among the members’ strong leadership on the Supreme the Society adopted as its Court of the United States – logo – marking its stationery convictions was that Civil Rights and enforced most recently and a growing flow of press was a matter on which the party by a Republican president. releases, reports and other of Lincoln should exercise (And it would, in fact, soon documents – a silhouette of be advanced much further, Abraham Lincoln. particularly strong leadership. through 1960’s federal The Republican Party legislation which would has experienced a vast array draw more support from Republicans than from Democrats of ups and downs since that time—but the Lincoln legacy in the United States Congress.) still represents an ideal Party lodestar. This anniversary Ironically, however, Civil Rights also became the one occasion is surely an appropriate time for remembering and issue which most clearly separated the Ripon Society from advancing that legacy. RF the nascent New Conservative movement as it emerged in the 1960’s and 1970’s. Lee Huebner served as the Ripon Nonetheless, it was support for Civil Rights which Society’s second president from 1967 to most forcefully galvanized the Ripon founders. Perhaps 1969. He later served as a speechwriter the first reflection of that fact came when the group in the Nixon White House and now is adopted the name of the Wisconsin town where the party a professor at the George Washington had first been organized, with strong abolitionist support, University.

The Ripon Society

Ideas that matter since 1962. “Over the course of the 50 years that Ripon has existed, it really has been very helpful in terms of shoring up our party – frankly helping to broaden our party.” SPEAKER JOHN BOEHNER JANUARY 22, 2013

Founded 1962.

www.riponsociety.org RIPON FORUM May 2015

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Red Governors in Blue States

Why tax reform may be the key to their success JARED MEYER Republican governors elected on platforms of Illinois -- Picking winners and losers is done through economic growth through tax reform are running the carve-outs, where tax exemptions or credits are given economies of three traditionally blue states. Can Illinois to specific industries or businesses. Illinois has been Governor Bruce Rauner, Massachusetts Governor Charlie notorious for handing out generous tax breaks to specific Baker, and Maryland Governor Larry Hogan deliver on corporations. Tax breaks passed out in 2011 to just two their promises? companies, Sears Holding Corp. and CME Group Inc., cost The economies that the governors inherited were the state over $330 million a year. Illinois policymakers stagnating. In addition to budget shortfalls and longjustified the handout by claiming that major companies term problems from unfunded pension liabilities, would leave if they were not given a deal. However, any Illinois, Maryland, and tax carve-out reduces the Massachusetts all had tax base, which requires lower GDP growth than an unfair increase of the the U.S. average in 2014. tax rate for everyone In the newly-released else in order to maintain American Legislative consistent revenue for Exchange Council report the state. It is far better Rich States, Poor States, for states to lower their Massachusetts is ranked rates and allow for an 35 in the Economic equal playing field. Performance Rank (1 Residents and is best and 50 is worst). businesses in Illinois Maryland receives are getting a break in a ranking of 31, and 2015, since temporary Illinois is only ahead of tax increases passed in Rauner, Hogan, and Baker were all 4 other states at 46. 2011 partially sunset. These findings The individual rate elected to restore sanity to their states’ are echoed by the dropped from 5 percent tax codes. non-partisan Tax to 3.75 percent, and Foundation’s 2015 State the corporate rate fell Business Tax Climate from 9.5 percent to 7.75 Index. The index evaluates states’ business climates based percent. Rauner’s predecessor and election opponent Pat solely on tax variables, and reveals a similar picture of Quinn (D) pushed the Illinois legislature to make the Massachusetts, Illinois, and Maryland, which all have temporary increases permanent because of the substantial below-average rankings of 24, 31, and 40, respectively.  deficits faced by the state, which are caused by runaway Lowering tax rates would help spur the states’ spending. economies, which is a necessary step for states to shore Massachusetts -Massachusetts foregoes up their finances. Lower rates deliver better results than nearly  $14 billion  in tax revenues due to individual provisions that benefit individual, often politicallyincome tax credits. These tax carve-outs comprise 23 connected, industries or companies. Government percent of the state budget. More revenue is lost through bureaucrats and politicians are simply incapable of tax credits for specific favored industries, such as film. A correctly picking winners and losers through grants small tax base, high tax rate environment is a disincentive and special tax treatment, and doing so does not lead to for entrepreneurship and business development and sustainable growth. hampers economic growth. Let’s look at each state: Property tax burdens in Massachusetts are the 6th RIPON FORUM May 2015

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highest in the nation. Removing tax carve-outs, such as those of “impervious” surfaces on their land, such as rooftops for solar and wind power, would allow Governor Baker to and driveways. Maryland voters rejected this approach, make Massachusetts’s property taxes more competitive and overwhelmingly chose Hogan over O’Malley’s handwith other states’ rates, possibly reversing the trend of picked successor, Anthony Brown. net income leaving Massachusetts from when residents Rauner, Hogan, and Baker were all elected to restore move to other states, sanity to their states’ which exceeded $10 tax codes. To succeed, To succeed, the new governors must billion  from 2000 to the new governors must 2010 (the latest data focus their attention on focus their attention on eliminating available).  eliminating tax carvetax carve-outs and promoting simple, Maryland -- In outs and promoting Maryland, Governor simple, neutral tax neutral tax systems, with rates levied Hogan needs to focus systems, with rates across a broad base at lower rates. on lowering the state’s levied across a broad individual income tax base at lower rates. This, rates, the  45th most burdensome  in the United States. combined with targeted spending cuts, would go a long way Doing so would benefit many more residents than creating towards improving the states’ troubled budgets. If the firstadditional carve-outs. From 2000 to 2010, Maryland lost term governors can succeed in tax reform, all three states net income totaling $5.5 billion from residents moving to will improve their economic rankings, and the stage will be other states, including $3 billion to income tax-free Florida.  set for long-term economic growth. RF Maryland’s previous governor, Martin O’Malley (D), was notorious for increasing taxes. He raised tax rates on Jared Meyer is a fellow at the Manhattan Institute for everything from personal and corporate income, to sales, Policy Research. He is coauthor of the book Disinherited: cigarettes, alcohol, and gasoline. He also created a “rain How Washington Is Betraying America’s Young. You can tax” that is assessed to property owners based on the amount follow him on Twitter @JaredMeyer10.

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News & Events

“THE THREAT IS GROWING, NOT DIMINISHING.”

Chairman McCaul, Reps. Katko & McSally Discuss Work of Homeland Security Committee and the Challenges Facing America Abroad

WASHINGTON, DC – Homeland Security Committee Chairman Michael McCaul (TX-10) appeared before a breakfast meeting of The Ripon Society on April 16th, delivering remarks in which he not only discussed his panel’s agenda for the coming year, but stated that the threat America is facing from terrorists around the world “is growing, not diminishing.” McCaul was joined at the meeting by two of his Subcommittee Chairs: U.S. Rep. John Katko (NY-24), who serves as Chair of the Transportation Security Subcommittee; and, U.S. Rep. Martha McSally (AZ-2), who serves as Chair of the Subcommittee on

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Emergency Preparedness, Response, and Communications. The three leaders pointed to several key areas where the Committee is working to strengthen America’s security, including a bipartisan measure  the panel unanimously approved earlier this week to better prepare us for cyber attacks online. “Cyber is an area where the probability of attack is high and the potential for severe damage is very high as well,” McCaul stated.  “We have great offensive capabilities to shut things down; so does Russia, and so does China.  Iran is also demonstrating great capability. Iran shut down 30,000 hard drives in Saudi Aramco, and is hitting our financial

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sector on a daily basis. What this bill does is build on the success that we had in authorizing the Department of Homeland Security cyber security operations that President Bush put in place. It’s working, but they don’t have the liability protections needed to have full participation by the private sector.” According to McCaul, the legislation approved by his Committee provides liability protection to any company that voluntarily shares information about malicious codes and other cyber threats.  “In turn,” he added, “we share information with them.  Most importantly, because about 85% of this threat information resides in


the private sector, we allow them Iraq. This radical Islamist movement days, and the screening process is to share private-to-private and give -- and you have to call it that because lax at best. “Atlanta, for example, had them liability protection. We think that’s what it is – is spreading like this will be transformational in terms wildfire across northern Africa and 64 different entry points for of defending our networks in the the Middle East.  We pulled out of employees, and they weren’t private sector and also in the federal our embassy in Yemen and pulled getting screened.  That’s pretty government, which I would argue is out of Libya.  Where there’s a power scary. It all came to light because very vulnerable.” vacuum, terrorists prey -- that’s a fellow from Atlanta got caught McCaul was elected to Congress where they breed.  The threat is carrying a backpack with 16 loaded in November 2004 and has served as growing, not diminishing.  And as guns getting off an airplane in New Chairman of the Homeland Security it grows overseas, so too does the York, two of which were automatic weapons and all of them loaded. Committee since January 2013.  In threat to the homeland.” He said that was the his remarks, he also tenth trip he took doing touched on another that.  We found out that serious threat facing a low level employee the U.S. that is in Atlanta would carry rapidly growing – the them through a secure threat posed by the area, give him the Islamic State of Iraq backpack, and the guy and Syria. would get on the plane. “I was briefed on That’s how the whole ISIS probably a year thing happened.   and a half ago before “So I said, ‘Let’s it hit the news,” the call a subcommittee Texas lawmaker hearing and investigate said, “It has escalated it.’  I had representatives over that time. It was from the airlines and the really the product airport associations.  I of a couple errors thought they would say, in judgment.  There “The threat is growing, not diminishing. ‘No, we don’t need any was sort of a false And as it grows overseas, so too does the changes.’  And this is narrative that Al threat to the homeland.” what I learned -- simply Qaeda was on the run. by identifying the right I was at Fort Hood Chairman McCaul issue and calling a last week awarding hearing on it, we made a Purple Hearts to the 12 soldiers who were killed Katko echoed Chairman gigantic change in the way security by Major Hasan, who was talking McCaul’s comments, and pointed to is done nationwide at airports, to Anwar al-Awlaki in Yemen, another area where U.S. security can because they came not to fight us, but with plans presenting what they asking for permission to do what – and is being -- improved. he did.  That was downplayed as “It became apparent when I wanted to change.  “It was a very valuable lesson to workplace violence.  Benghazi was was getting ready to work on the blamed on a video.  Al Qaeda was Committee that airports across me -- that if you do your homework on the run.  After the killing of bin the nation have gigantic security and your staff does their homework, Laden, it was supposed to be over gaps,” he stated.  “The prime fear is you can really bring about change. because that was the narrative.  But that one of these tens of thousands You have to identify the right it’s not, unfortunately.  I wish it was, of workers at the airports who is issues – it can’t be fluff. But when but it’s not over.  disgruntled about something could you identify the right issues, you “It wasn’t until the beheadings do something very bad.  I realized can bring about change simply by occurred that the American people that none of them were getting having a hearing.   And we’re going woke up to the fact that this screened when they go into work to do that.  We’re doing everything narrative is false and the threat is every day.  They could access secure we can to make this country as safe still real.  It’s not just in Syria and areas of the airport even on their off as it possibly can be.” RIPON FORUM May 2015

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McSally concurred, and touched on her own experience as a 26-year combat veteran in the U.S. Air Force, where, she explained, she also learned a valuable lesson – about missed opportunities and the importance of making sure the policy is right. “As a Colonel, I was running our counter terrorism operations in Africa,” she revealed. “I saw up close how flawed some of our policies had been and how we watched these al-Qaeda affiliates and Islamic extremists grow and metastasize all over the world.  We watched Al-Shabaab, AQIM, West Africa, Boko Haram,

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take advantage of ungoverned spaces. AQIM was kidnapping westerners in order to build up their coffers so they could continue to buy the weapons and arms that they did once Libya fell into chaos. “We watched thousands of terrorists being trained in terrorist camps by Al-Shabaab and we repeatedly went up the chain of command and asked, ‘Please, we’ve got to do something about this.’  These guys are going to go harm our interests in the region.  They want to build the caliphate, grow it, and take down the West.   We would tee up

RIPON FORUM May 2015

potential operations, and they just repeatedly would say, ‘No, it’s not in our national interest. It’s not our problem.  We don’t care about it.  This is a regional issue.’   “We now see what’s gone on with the students in Kenya and the mall. This is Al-Shabaab.  And I’m telling you, in 2008, 2010, we watched these guys.  They’re likely some of the graduates from these camps that we knew about and let go because we failed to take military action.  And I agree this is a generational threat and we’ve got to counter the ideology.  But we’ve got to kill a lot of them, too.”  RF


An Open Letter to Congress

Dear Congress, The nation deserves a comprehensive, forward-looking national energy policy that takes into account America’s new role as a global energy leader. Our unprecedented shale development and refining capacity have provided the necessary feedstock to power an American manufacturing renaissance. But, this continued success is dependent on a regulatory scheme that achieves our shared energy security, environmental and safety objectives; in a way that enhances business certainty, eliminates unnecessary costs and avoids conflicting regulations. Only then can our nation look forward to a future of energy independence and growth. Sincerely, American Fuel & Petrochemical Manufacturers

About AFPM AFPM, the American Fuel & Petrochemical Manufacturers is a trade association representing high-tech American manufacturers of virtually the entire U.S. supply of gasoline, diesel, jet fuel, other fuels and home heating oil, as well as the petrochemicals used as building blocks for thousands of vital products in daily life. AFPM members make modern life possible and keep America moving and growing as they meet the needs of our nation and local communities, strengthen economic and national security, and support 2 million American jobs. RIPON FORUM May 2015

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Name: Cory Gardner Occupation: United States Senator for Colorado How has your life changed since election night? Most importantly, my daughter Caitlyn was born just a few weeks after election night, in December of 2014. She was just days old when I was sworn into office. Keeping up with her, in addition to my two other kids, has been the biggest change for me over the past few months. And that’s to say nothing of going from representing my Congressional district to representing the whole state! In addition to your victory in November, Republicans took over the state Senate and won nearly every statewide office. What did election night say about Colorado voters? As I said on election night, the people of Colorado are not red, are not blue, but they did deliver a message that was crystal clear: that they want their elected officials to get the job done and get out of the way of the American people. I believe voters were fed up with the inactivity and bickering in Washington, and they elected people to get stuff done and let America work. Colorado is now one of 23 states that have legalized marijuana in some form. Is this a trend limited to these states, or something that reflects the changing demographics of America? I think that Colorado and these other states are functioning as the Constitution intended for states to function: as laboratories of democracy. I’m closely monitoring what’s happening in each of these cases, and I think all Coloradans and Americans are trying to figure out where exactly the right balance lies between personal responsibility and personal freedom. Along with you, 52 current Senators have also served in the House. How do you believe bicameral experience will help your time in the Senate? It’s great to be able to build on the progress I made on various issues in the House while in the Senate, and to rely on the relationships I developed there to help craft legislation here. While the Senate and the House are obviously quite different institutions with different rules and traditions, I believe that the time I spent in the House helped me develop knowledge on a variety of issues, and certainly gave me a chance to engage in frequent collaboration with my colleagues. You successfully fought off the left’s “war on women” attacks against you during the last election. What can other Republicans learn from your response? I think voters around the country are searching for a positive message. They want to hear what your plan is, and they want to hear how you’re going to get it done. The constant negativity, the personal attacks, all of those things eventually just turn voters off. If Republicans are able to get their good ideas out, refuse to let their opponents define them, and keep up a relentless positive message, voters will respond. Staying on offense, not on defense, helped us fight back when our opponents “jumped the shark.” Let’s talk about issues for a moment. What are your top three priorities for the coming two years? I have just one more than three; I’m going to continue to pursue the Four Corners plan that I presented during the campaign. My focus is going to be Economy, Energy, Education, and the Environment. And if you could have the President sign any piece of legislation today, what would it be? A balanced budget that, of course, would repeal and replace Obamacare.

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RIPON 2015 RIPON FORUM FORUM Spring May 2015


DEEP WATER

UNCONVENTIONALS

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MEETING TODAY’S ENERGY CHALLENGES

THE RIGHT WAY.

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