How the 1994 'Contract With America' Led to a Republican Revolution

How the 1994 'Contract With America' Led to a Republican Revolution


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A balanced budget amendment. Tax cuts. Welfare reform. Those were just three of the 10 points of the Contract with America, Newt Gingrich's conservative plan, signed by 300-plus Republican candidates and presented at a press conference just six weeks before the 1994 midterm elections.

The proposal by Gingrich, then Speaker of the House, has been credited with the "Republican Revolution" that ensued at the polls, with the GOP easily taking control of the U.S. House and Senate, gaining 12 governorships and regaining control in 20 state legislatures.

Republicans had long been in the minority in Congress and the key to the Republican sweep, says Paul Teske, dean of the School of Public Affairs at the University of Colorado, Denver, was in making the campaigns national.

"The Democrats controlled the House for 40 straight years prior to 1994, with an interesting coalition of northeast/midwest liberals and southern Democrats, who by today have all become Republicans," he says, adding that Democrats had held the House for 58 of the prior 62 years and the Senate for 34 of 40 years prior to 1994. “So, Republicans were not used to having congressional power. Their thought was that by nationalizing the election, it could be a way to get power back."

President Clinton and Hillary Clinton were campaign targets.

Teske adds that Republicans had some easy "targets to attack," from the unpopular, early years of President Bill Clinton, to the Hillary Clinton-led health care proposal to individual corruption cases in Congress.

The overarching goal of the contract involved cutting taxes, reducing the size of government and reducing government regulations, taking aim at Congress, itself, to be more transparent, less corrupt and more open with the public.

"Essentially, it claimed that it would 'drain the swamp'—though they didn’t use that term, in terms of what Donald Trump would later articulate," Teske says. "If successful, the contract specified 10 bills they would bring up for votes in the first 100 days, including a balanced budget amendment, term limits, social security reform and others."

What was not included? Details on how these bills would be executed and what they would cost.

"It probably did not matter that it was vague on costs, and that was even an advantage," Teske says. "The goals were big picture, and ones that many voters could understand, without getting into—and bogged down by—the details of budget costs, specific programs that might go away, etc."

Democrats lost a long hold on Congress.

Democrats, meanwhile, characterized the plan as calling for radical changes and solutions that would make America worse off.

"They highlighted some of the more extreme elements and tried to show the damage it could cause to policies and institutions that had been in place for decades," Teske says. "Some mocked it as the 'Contract on America'—not 'with'—as with a 'hit job'” on the American people."

And while Republicans won big at the ballot box that year, Teske says it was going to be a tough year for Democrats anyway, considering Clinton's unpopularity, a weak economy and the history of midterms favoring the party not held by the president.

"But, the contract did show a coherent opposition plan that probably helped re-capture many of these seats," he notes. "At the same time, pendulums do swing in American politics and after 60 years of pretty dominant Democratic control of both houses of Congress, there was probably going to be a change. But, it is probably fair to say that Gingrich’s contract was in the right place, at the right time, for the Republican party."

The midterms introduced extreme, divisive politics.

As for the contract's lasting impact? Most of its ideas and proposals did not pass Congress, or were vetoed by Clinton, and, according to Teske, the ones that did pass were not radical departures and instead relatively minor in scope. But it did put Republicans back in power in Congress, which they've largely held onto in the years since.

"The Gingrich approach of extreme right ideas, combined with a scorched-earth personal level of politics in attacking opponents—later seen in Clinton’s investigations and impeachment—has also had a major impact on American politics" he says. "It helped bring a much more 'win at all costs' mentality, and a divisiveness that persists today."


How the 1994 'Contract With America' Led to a Republican Revolution - HISTORY

That is why, in this era of official evasion and posturing, we offer instead a detailed agenda for national renewal, a written commitment with no fine print.

This year's election offers the chance, after four decades of one-party control, to bring to the House a new majority that will transform the way Congress works. That historic change would be the end of government that is too big, too intrusive, and too easy with the public's money. It can be the beginning of a Congress that respects the values and shares the faith of the American family.

Like Lincoln, our first Republican president, we intend to act "with firmness in the right, as God gives us to see the right." To restore accountability to Congress. To end its cycle of scandal and disgrace. To make us all proud again of the way free people govern themselves.

On the first day of the 104th Congress, the new Republican majority will immediately pass the following major reforms, aimed at restoring the faith and trust of the American people in their government:

    FIRST, require all laws that apply to the rest of the country also apply equally to the Congress

SECOND, select a major, independent auditing firm to conduct a comprehensive audit of Congress for waste, fraud or abuse

THIRD, cut the number of House committees, and cut committee staff by one-third

FOURTH, limit the terms of all committee chairs

FIFTH, ban the casting of proxy votes in committee

SIXTH, require committee meetings to be open to the public

SEVENTH, require a three-fifths majority vote to pass a tax increase

EIGHTH, guarantee an honest accounting of our Federal Budget by implementing zero base-line budgeting.

Thereafter, within the first 100 days of the 104th Congress, we shall bring to the House Floor the following bills, each to be given full and open debate, each to be given a clear and fair vote and each to be immediately available this day for public inspection and scrutiny.

    1. THE FISCAL RESPONSIBILITY ACT:

    A balanced budget/tax limitation amendment and a legislative line-item veto to restore fiscal responsibility to an out-of-control Congress, requiring them to live under the same budget constraints as families and businesses.

2. THE TAKING BACK OUR STREETS ACT:

    An anti-crime package including stronger truth-in-sentencing, "good faith" exclusionary rule exemptions, effective death penalty provisions, and cuts in social spending from this summer's "crime" bill to fund prison construction and additional law enforcement to keep people secure in their neighborhoods and kids safe in their schools.

3. THE PERSONAL RESPONSIBILITY ACT:

    Discourage illegitimacy and teen pregnancy by prohibiting welfare to minor mothers and denying increased AFDC for additional children while on welfare, cut spending for welfare programs, and enact a tough two-years-and-out provision with work requirements to promote individual responsibility.

4. THE FAMILY REINFORCEMENT ACT:

    Child support enforcement, tax incentives for adoption, strengthening rights of parents in their children's education, stronger child pornography laws, and an elderly dependent care tax credit to reinforce the central role of families in American society.

5. THE AMERICAN DREAM RESTORATION ACT:

    A S500 per child tax credit, begin repeal of the marriage tax penalty, and creation of American Dream Savings Accounts to provide middle class tax relief.

6. THE NATIONAL SECURITY RESTORATION ACT:

    No U.S. troops under U.N. command and restoration of the essential parts of our national security funding to strengthen our national defense and maintain our credibility around the world.

7. THE SENIOR CITIZENS FAIRNESS ACT:

    Raise the Social Security earnings limit which currently forces seniors out of the work force, repeal the 1993 tax hikes on Social Security benefits and provide tax incentives for private long-term care insurance to let Older Americans keep more of what they have earned over the years.

8. THE JOB CREATION AND WAGE ENHANCEMENT ACT:

    Small business incentives, capital gains cut and indexation, neutral cost recovery, risk assessment/cost-benefit analysis, strengthening the Regulatory Flexibility Act and unfunded mandate reform to create jobs and raise worker wages.

9. THE COMMON SENSE LEGAL REFORM ACT:

    "Loser pays" laws, reasonable limits on punitive damages and reform of product liability laws to stem the endless tide of litigation.

10. THE CITIZEN LEGISLATURE ACT:

    A first-ever vote on term limits to replace career politicians with citizen legislators.

Respecting the judgment of our fellow citizens as we seek their mandate for reform, we hereby pledge our names to this Contract with America.

THE REPUBLICAN 'CONTRACT WITH AMERICA': A DEMOCRATIC CRITIQUE

Jan-12-95 (SENATE) THE REPUBLICAN CONTRACT: IT DOES NOT ADD UP
PART CONGRESSIONAL RECORD (SENATE)
DATE January 12, 1995
PAGE S821

Mr. CONRAD. Mr. President, ever since the November 8 election, the Republican majority and the media have been talking about the Contract With America. The contract sets out the Republican agenda for the first session of the Congress, and it has many good elements in it. For example, I strongly support the Congressional Accountability Act, which will ensure that Congress lives by the same rules it imposes on everyone else. That is something that we almost passed in the last Congress and that is something we will pass in this Congress.

I support the unfunded mandates bill, which will make it more difficult for Congress to mandate State and local governments to establish programs unless Congress appropriates funding to pay for them. That also makes common sense. And it is also something we were working on in the last Congress. But when it comes to the budget and tax elements of the contract, there are two big problems.

First, the numbers just do not add up. There has been a lot of talk about what will not be cut, but the specific proposals on what Republicans believe should be cut fall far short of what is needed to balance the budget. And if the math does not work, the contract will balloon our deficits, explode the national debt, slow our economy, and leave future generations to clean up the mess.

Second, the tax cuts proposed by the Republicans are unfair because they are clearly designed to benefit the wealthiest among us far more than average Americans. And the program cuts necessary to finance these tax cuts, or the higher interest rates that will result when the Republicans fail to balance the budget as promised, will hurt the middle class. Let me explain why the contract does not add up and why it is unfair to average Americans.

We first have to look at the current budget outlook. The contract calls for a balanced budget amendment to the Constitution, which would require a balanced budget by the year 2002. I strongly support this goal. Deficit reduction has been at the top of my agenda since I came to the Senate in 1986, and I have spent an enormous amount of time working on the Federal budget, learning about it, and devising plans to put our fiscal house in order. Every year I have been in the Senate, I have offered comprehensive plans in the Budget Committee, or far-reaching amendments in the Budget Committee or on the floor of the Senate, to achieve more ambitious deficit reduction goals.

Unfortunately, the rest of the Republican contract that is before us makes it far more difficult to meet the balanced budget goal. According to the Congressional Budget Office, it will take more than $1 trillion in cuts over the next 7 years to reach a balance by the year 2002. That is what this chart shows. This is what is necessary to achieve balance by the year 2002 - over $1 trillion in budget cuts.

This is not millions of dollars this is not billions of dollars - this is a trillion dollars, one thousand billion dollars. And that is only if we do not do anything to make the problem worse before we start to solve it.

But the contract makes things far more difficult because it promises hundreds of billions of dollars in tax cuts, most of which would benefit the wealthy far more than average Americans.

The Republicans call it the Contract With America. I call it a Contract on the Middle Class. In order to pay for the tax cuts, the Republicans will have to cut an additional $364 billion in the next 7 years, much of it from programs that benefit middle income families. So let me be clear. If we do not do anything to make the problem worse before we begin to solve it, we need $1 trillion in cuts over the next 7 years to S 822 achieve a balanced budget. But the Republicans suggest the first thing we do is not to cut the spending, but to cut taxes by $364 billion over 7 years. So they have dug the hole deeper. Instead of a $1 trillion problem to solve, they present us with a $1.4 trillion hole to fill.

This chart shows that. The blue indicates the $1 trillion necessary to bring the budget into balance. And if you add the $364 billion of tax cuts Republicans have called for, you then see we have a $1.4 trillion problem to solve.

In fact, the effects of these tax cuts will be worse than it appears from these charts. By design, the tax cuts are structured so that the adverse effects are not readily apparent until after the end of the 5-year budget window that Congress uses to measure the effect of proposed changes in taxes and entitlements. In the first 5-year period the tax cuts would cost $197 billion. But between fiscal years 2001 and 2005, their cost more than doubles to $514 billion. Over the 10-year period, those tax cuts cost $712 billion.

This is at a time when we already have a $1 trillion problem to solve over the next 7 years. Without going further on that point, let me just say this means we will have to make additional cuts after 2002 to keep pace with the growing cost of these giveaways to the wealthy and corporate America.

In addition, the contract calls for more spending on defense. Everyone wants a strong national defense, but the world has changed. We now spend more on defense than the next top 10 countries combined, even though there is far less danger to defend against than just a few years ago. In fact, we are the only remaining superpower in the world. Certainly we see this to be true when we look at the Russian Army that cannot even effectively deal with one element of its country that is in revolt.

The extra $82 billion the Republican defense buildup will add to our budget will raise the total cost necessary to reach balance by 2002 to a staggering $1.48 trillion - $1.48 trillion. So we start with a $1 trillion problem and the Republicans immediately proceed to add $364 billion of tax cuts and $82 billion of additional defense spending, making the hole deeper, making the problem bigger, and making the prospects of success more remote.

Just to put that in context, the entire Federal budget this year for everything but interest on the Federal debt is $1.36 trillion. That is, to reach balance by 2002, to pay for all of the proposals in the Republican contract, will require the equivalent of eliminating every Government program - except interest payments - for more than 1 year.

That would be a tough enough problem to address and to solve even if the Republicans in their contract did not do other things to make it even more difficult. But after all the Republican goodies are added on top of our current fiscal problems, we need to cut nearly $l.5 trillion in order to reach a balanced budget by 2002. Clearly that will not be easy.

You have heard our friends on the other side of the aisle suggest over and over that they are going to close this budget gap by cutting agriculture, maybe eliminating farm programs completely and by cutting welfare. Mr. President, that is less than 5 percent of the Federal budget. They have a long, long way to go. The only thing they have come up with so far is welfare, foreign aid, and agriculture, a small fraction of overall spending.

This chart shows where the money is going in the 7 years leading up to 2002. We are going to be spending - if we do not make changes - and clearly we must - some $13.2 trillion over the next 7 years. Where is the money going? Interest is just over $2 trillion, and defense is just over $2 trillion. In fact, we are going to be spending more on interest than we are going to be spending on defense over that 7-year period. Medicaid will be about $1 trillion. Social Security will be almost $3 trillion. Foreign aid will be $162 billion, a little sliver of the spending pie. Domestic discretionary spending will be $2 trillion. Medicare will be nearly $2 trillion. And agriculture, that I hear the other side talking about so loudly, is far less than 1 percent of the budget over this period, only $87 billion. This little tiny sliver here on the chart is agriculture. All other Federal spending over that period will be about $1 trillion.

Mr. President, it`s clear we cannot balance the budget just by cutting agriculture programs, cutting foreign aid, and cutting welfare. That is less than 5 percent of what we spend. That is not going to do the job. Once again, we have public statements that sound good but just do not stand up to budget reality. They just do not add up. What we have is a Republican credibility gap.

Unfortunately, instead of giving us a detailed plan that tells us what they are going to cut in order to reach their goal, the Republicans have been telling us what they will not cut. First, they say we cannot cut interest payments on the Federal debt. Of course, that is true. If we did try to cut interest payments, the Federal Government would default and the economy would be thrown into turmoil. This takes over $2 trillion off the table of the $13 trillion we are going to be spending over the next 7 years.

Second, the contract authors say they are not going to cut Social Security. That takes an additional $2.9 trillion off the table.

Third, the contract authors have promised to increase rather than decrease defense spending. So cuts in defense spending are also off the table. That removes another $2.1 trillion from consideration. In fact, after the contract authors have finished making their promises, more than half of the budget is off the table. More than half of the budget cannot be considered in order to solve the budget problem that we face.

On the other side of the ledger, the Republicans have detailed only $277 billion in spending cuts over the next 7 years. Mr. President, I earlier outlined the extent of the problem. If we are going to balance the budget over the next 7 years we have to make cuts of $1.48 trillion, almost $l.5 trillion. The Republicans have so far identified $277 billion of cuts. That leaves the Republicans with a credibility gap of $1.2 trillion - not million, not billion, but trillion. The size of the problem is $1.5 trillion but they have identified less than $300 billion of budget cuts. That means somewhere out there is $1.2 trillion of budget cuts our Republican friends have failed to identify.

We have heard the good news from our Republican friends. But as Paul Harvey would ask, `What is the rest of the story?` They have only two choices. Either the Republicans detail Draconian cuts in programs to close this gap or they fail to balance the budget by 2002.

This failure to talk about specific spending cuts sounds like deja vu all over again. We have heard it all before, Mr. President. History reminds us of the failed trickle down economics of the 1980`s. They can say it is a new Contract With America. They can put new clothing on it, but it is the same old trickle down theories, the same old voodoo economics.

History also tells us that faced with a choice between making tough specific spending cuts to pay for their proposals and letting the budget run out of control, the Republican Party will balloon the deficit and run up more and more red ink.

In the 1980`s President Reagan came to town promising huge tax cuts, increased defense spending, and a balanced budget. Does it sound familiar? Well, it is. It did not work then. It is not going to work now.

Instead, during that period the average annual deficits under Presidents Reagan and Bush were five times that under President Carter. The national debt tripled under President Reagan, from $900 billion to $2.6 trillion, and grew by half again under President Bush to $4 trillion.

Mr. President, all we have to do is go back and look at what happened when we previously relied on this economic theory. Here is the budget deficit line. From 1940 to 1980, the national debt of the United States was relatively stable. But the Republicans came to town in 1980 with this theory that they could cut taxes, increase defense spending, and somehow the budget would be balanced - even though it was not balanced when they began. It proved to be a complete fraud and hoax. Mr. President, this is what happened. We very nearly destroyed the economy of this country by creating a fourfold increase in the national debt. S 823

Mr. President, these debts did not finance investment in our future. Instead, they reduced our national savings. The result was record high real interest rates.

This chart shows exactly what happened to interest rates as a result of those failed economic policies. From 1968 to 1973, real long-term interest rates, the difference between the interest people paid and the rate of inflation, was less than 1 percent. From 1974 to 1979, real interest rates, the difference between inflation and the interest rates people paid was a negative point 6 percent. But look at what happened from 1980 to 1989 to real interest rates. The difference between the level of inflation and the interest rates people paid was 5.5 percent - record high real interest rates. What did that do? It stopped economic growth in its tracks, it killed job creation in this economy, and it weakened us for the future.

Record high real interest rates means that we invested less in the 1980`s than in previous decades resulting in less economic growth for the future, stagnating wages, and a bigger struggle for the average guy to get ahead. It is true. The rich got richer but the middle class got nothing in the 1980`s.

These policies squeezed the middle class while better off Americans, the top 20 percent of earners, saw their incomes increase. In fact, this chart shows the changes in family after-tax incomes by income group from 1977 to 1992.

Here is what happened. The bottom 20 percent in our country, the lowest one-fifth in terms of income, saw their after-tax incomes decline 12 percent. The next 20 percent in our country saw their incomes decline 10 percent. The next 20 percent of the income ladder in this country saw their incomes decline 8 percent.

This is the harsh reality of what occurred under a flawed economic policy and plan. Those 60 percent of Americans in the lowest income categories saw their incomes decline during this period. The next 20 percent of the people in this country saw their incomes rise a modest 1 percent. But look what happened to the top 1 percent. The top 1 percent saw their incomes increase 136 percent.

The facts are startling. Working men without college degrees - about three-fourths of all working men - saw a 12-percent decline in real wages since 1979. It is no wonder they are angry it is no wonder they are upset it is no wonder they are anxious about the future.

Average weekly compensation has actually fallen to its lowest level since 1960. The only reason that real median family income stayed level overall is because families have added additional earners. My family is an example. I was raised by my grandparents and grew up in a middle class, extended family, with three uncles and aunts and their families in my hometown. In our family - like most middle-class families at that time - the mothers were able to stay home until the kids went to school. Now, in my generation, with 13 grandchildren - all with advanced degrees - every single family has both spouses working to maintain the same middle-class existence. This is not just the reality of the Conrad family. It is the reality of every family in America, and it is, in part, because of a flawed economic policy and plan that was put in place in the 1980`s - a plan that proved to be an economic disaster for this country.

Meanwhile when middle-class incomes were falling, the cost of health care, a college education, and homes were rising faster than inflation, squeezing the middle class. Middle-class incomes are buying less and middle-class families are saving less. At the same time, the pay of the average chief executive officer of a corporation, has risen from 29 times as much as the average worker in 1979 to 93 times as much as the average worker today. It is no wonder, I suppose, that a major corporation gave $2.5 million to the Republican Party in the last campaign. They like this policy. This policy is good for them. I understand that. They are looking out for their economic self-interest.

Mr. President, our obligation here in this Chamber is to look out for all Americans, not just the wealthiest 1 percent, not just those at the top of the income ladder, but everyone.

If we look at the tax provisions of the contract, we see more of the same trickle down economic theory. I would like to focus for a few minutes on some of the tax provisions proposed in the contract, because they point so clearly to why the contract is not fair, why it is more of the same old trickle down economics that hurt the middle class in the 1980`s.

Middle-income Americans are being led to believe that the tax changes proposed by the Contract With America are directed primarily at them. Nothing could be further from the truth. In fact, only 46 percent of the contract`s proposals benefit families with incomes under $100,000.

Mr. President, this chart shows that reality. A majority of the benefits - 54 percent - go to families with incomes greater than $100,000, only about 3.5 percent of all Americans. Put another way, only 46 percent of the proposed Republican tax cuts go to benefit the 96.5 percent of Americans who earn less than $100,000, while 54 percent of the benefits go to 3.5 percent of the people who earn more than $100,000 per year. That is the old trickle down economics. That is the way it worked then and that is how it would work now. It is no wonder the middle class got left behind in the 1980`s. And if such a policy is enacted now, they would be the first ones hurt in the 1990`s.

All in all, almost one-third of the benefits under the Republican plan go to households with incomes of more than $200,000. That is how the Republicans targeted this plan - with one-third of the benefits going to the top 1 percent.

Mr. President, I think it is useful to look more closely at a few of the tax proposals - the major ones - that our friends in the Republican Party have proposed. Let`s examine them and see who benefits.

The most costly of the tax cuts in the contract are aimed at the very wealthy. For example, 95 percent of the benefits from the expanded IRA provision would accrue to the top 20 percent of income earners, at a net cost of $45 billion over 10 years. This chart shows how that works. Ninety-five percent of the benefits of the IRA tax incentive they have proposed go to the top 20 percent of income earners who are more likely to already benefit from other tax-favored pension and retirement plans, while only 5 percent of the benefits go to 80 percent of the population.

Capital gains tax relief, which has also been proposed, strikes a chord with many Americans, including some of my constituents who are small business owners or farmers. The proposal in the contract is not a reasonable relief measure, however. Again, it benefits primarily the wealthy. In fact, almost half of the benefits from the capital gains provision would accrue to the wealthiest 1 percent of the population.

It should be pointed out that, through indexing and direct exclusion, taxes would be eliminated on most capital gains profits. The overwhelming winners would be higher income individuals who hold stocks and bonds, while no change would be made in the treatment of interest income from the savings accounts that ordinary middle-class Americans hold. For interest earnings, no adjustment for inflation or exclusion from taxation would be provided. This is the reality of the Republican Contract With America.

Mr. President, I do not know what can be more clear. This shows that the top 1 percent of income earners receive 50 percent of the benefits of the proposed capital gains tax cut. The other 50 percent goes to the other 99 percent. This is the Republican idea of equity. It is not my idea of equity, not my idea of fairness, not my idea of an economic plan that is right for America.

Tax cuts that benefit primarily the wealthy are particularly ironic in view of the fact that I mentioned earlier - income for the top 20 percent of the population has dramatically increased over the past 20 years. I am glad to see that. But what happened to the rest of the folks in this country?

As I noted earlier, the next 20 percent saw a 1 percent gain, and the income of the bottom 60 percent in this country actually declined. This is the reality. In fact, the wealthy are taking home the largest share of national income ever. Yet, the contract proposes tax cuts to ensure that the wealthiest become even wealthier. S 824

The problem is further compounded by the certainty that while upper income families are receiving the benefit of the lion`s share of these tax cuts, they secure a much smaller percentage of their income from Government benefits than average families at lower- and middle-income levels. Upper income families would be affected the least by budget cuts necessary to balance the budget and pay for further tax cuts, primarily for their benefit.

We are giving these benefits to the wealthy at a very high price to the country. At a time when we should be focusing on fiscal restraint, further deficit reduction and spending cuts, the Republicans instead are focusing on tax cuts.

The proposals in the contract are simply a recycling of the hollow promises from 1981: large tax cuts, defense spending increases, and a balanced budget. That is what they said then that is what they are saying now. They did not keep their promises then and they can`t do it now.

The Reagan administration predicted the economy would improve from a $55 billion budget deficit in 1981 to a surplus of $5.8 billion in 1985. In reality, the Federal deficit actually rose during that period to $212 billion - another gap between rhetoric and reality. They inherited a deficit of $55 billion and they ran it up to $212 billion, all the while saying they would achieve a surplus.

Mr. President, the contract is just as irresponsible. The contract`s tax cuts will cost $364 billion, and the Republican defense increases will add another $82 billion. That means the Republicans need $1.4 trillion of spending cuts to balance the budget by the year 2002. Let me repeat: The Republicans need $1.4 trillion in spending cuts over the next 7 years to balance the budget after their tax cuts and after their defense increases.

But where are their spending cuts? Where are they? `Where is the beef?` The only specific cuts the contract identified add up to $277 billion over the next 7 years, not even enough to pay for their tax cut proposal, let alone start to balance the budget.

The bottom line is that there is a $1.2 trillion - not million, not billion, $1.2 trillion - Republican credibility gap, the gap between Republican rhetoric and Republican reality. It gives new meaning to the phrase `Don`t ask, don`t tell.` That is the economic policy the Republicans are asking the American people to buy - a pig in a poke. `We will balance the budget.` The problem is $1.4 trillion. They have shown $277 billion of spending cuts. Where is the rest? Where is the other $1.2 trillion?

You really have to wonder what the Republicans are hiding from the American people.

We have seen these sorts of promises before, so we know what is going to happen. These tax breaks for the wealthy will end up busting the budget and the middle class will get stuck with the bill in one of two ways. Either they will be paying through huge cuts in middle class programs, from Medicare to student loans to keeping our highways in good repair, or they will pay with higher interest rates on home loans, car loans, and educational loans, and economic stagnation caused by falling investment in our future.

The Republicans have been enormously successful at selling their contract as a benefit to the middle class.

Mr. President, the reality is that, hidden in the fine print of the contract, are enormously expensive tax breaks for the wealthy that will bust our budget.

Instead of talking about more defense spending and tax breaks for the wealthy, the Republicans need to tell us their specific proposals for balancing the budget. Where are they going to cut the other $1.2 trillion necessary to balance this budget? That is $1,200 billion.

We are waiting to hear from the Republicans. Where are they going to make the cuts specifically? Not these nostrums, `Oh, we will maybe eliminate agriculture funding.`

In closing, let me again say we have heard this all before. There was a credibility gap in the 1980`s between what the Republicans promised and budget reality. Earlier, I said the Contract With America was a contract on the middle class.

I would warn those middle class Americans who listened to the promises of the Republicans in the 1980`s. What happened to you? What happened was the rich got richer, the poor got poorer, and the middle class paid the bill.

Mr. President, political rhetoric in a campaign is one thing. Performing when one has the responsibility of governing is another thing. I call on the Republicans and I challenge the Republicans to come forward with their plan to balance the budget.

What are they going to do to close the gap between the $1.48 trillion necessary to balance the budget over the next 7 years and the paltry $277 billion of budget cuts they have identified? Where is the other $1.2 trillion the Republicans need in spending cuts in order to balance this budget?

We are waiting. The American people are waiting. We wait with great interest to see how our friends on the other side of the aisle will begin to close the gap between rhetoric and reality.

I thank the Chair and I yield the floor.

THE REPUBLICAN CONTRACT WITH AMERICA: A REPUBLICAN EVALUATION AFTER THE FIRST 100 DAYS

Last September, more than 300 Republican House members and candidates stood on the steps of the Capitol and signed the Contract With America. The contract proposed specific legislation to limit government and hold it accountable to the people to promote economic opportunity and individual responsibility for families and businesses and to maintain security both at home and abroad. The contract put in writing what our candidates stood for and what a House Republican majority would accomplish when entrusted with power from the people to act on their behalf. It its first 100 days, the Republican Congress has kept its promises and begun building a better America.

Ending 'business as usual' in Congress

On its first day in office, the new Republican majority began keeping its promise to change the way Congress does business and cut government down to size. With bipartisan support, the House enacted "A Bill of Accountability." The GOP reforms:

* Make Congress more open and accountable. The House voted to live under the same laws it imposes on the private sector, limit committee and subcommittee chairmen to three terms and the speaker of the House to four terms, ban ghost voting in committee and authorize the first full public accounting of the House in history.

* Eliminate waste and inefficiency. The House voted to eliminate three committees, 25 subcommittees, one-third of committee staff slots and all special-interest service organizations.

* Ensure Congress cuts spending. The House voted to require a three-fifths majority to raise income taxes and implement an "honest-numbers" budget so spending increases will no longer be labeled "cuts."

Unfunded Mandates Reform Act:

Ending the fed's shakedown of state & local government

House Republicans ensured that state and local governments (and ultimately taxpayers) will no longer be saddled with costly unfunded federal mandates. The bill establishes procedural roadblocks to keep bills imposing unfunded mandates greater than $50 million from being considered on the House floor, requires federal regulators to consider the cost-benefit impact of new regulation and allows judicial review to ensure compliance.

Eliminating pork from the budget

Congressional Republicans gave the president the authority to eliminate wasteful spending and special-interest tax breaks buried in appropriations bills.

Balanced Budget Amendment:

Reining in the cost of government

The Republican House approved -- for the first time ever -- a balanced budget amendment. By holding federal spending growth to just 3 percent instead of the projected 5.4 percent increase, Congress can balance the budget by the year 2002 without touching Social Security or raising taxes. The Clinton budget projects deficits of $200 billion or more for the next five years, rising to more than $300 billion after that. Although six Senate Democrats -- who voted for the amendment last year -- switched their votes and killed the amendment, congressional Republicans will continue to fight for a balanced budget by 2002.

Creating a citizen legislature

The Republican House held its first-ever vote on term limits. The constitutional amendment needed 290 votes to pass and was defeated by Clinton and the Democrats. More than 80 percent of Republican members voted in favor of term limits more than 80 percent of Democrat members voted against term limits.

Ensuring a Safer, More Secure America Taking Back Our Streets Act:

Taking aim at violent criminals

The House approved six crime bills aimed at correcting serious flaws in the Clinton crime bill.

* The victim restitution bill requires criminals to pay full restitution to their victims for damages resulting from their crimes.

* The exclusionary rule bill allows the use of evidence seized without a valid warrant if authorities acted "in good faith".

* The prison construction bill authorizes $10.5 billion for states to build more prisons.

* The criminal alien deportation bill streamlines the deportation of criminal aliens after they serve their sentences.

* The Habeas Corpus appeals bill limits endless appeals of death-row prisoners.

* The police-or-prevention block grants bill gives local officials maximum flexibility to administer $10 billion for law enforcement programs.

National Security Revitalization Act:

Strengthening national defense

Clinton's FY 1996 budget cuts defense spending $10.6 billion below the 1995 level. Yet, Clinton has deployed U.S. forces on more peacetime and humanitarian missions than ever before, jeopardizing the combat-readiness of the military. The GOP bill:

* Establishes an advisory commission to assess the nation's military needs

* Prohibits the placement of U.S. troops under U.N. command

* Cuts the United States' share of U.N. peacekeeping costs from 32 percent to 20 percent

* Urges that Eastern European countries be assisted in the transition to full NATO membership.

Renewing America's Families

Giving hope to the nation's poor

The comprehensive Republican welfare reform package approved by the House is pro-work, pro-responsibility and pro-family. It ends entitlement status of numerous federal welfare programs, folding the money into block grants to states where services are delivered more effectively, at less cost and with more local concern. The reforms include:

* Ending the Entitlement: Four cash welfare programs, including AFDC, are merged into one block grant to states, eliminating hundreds of pounds of federal regulations and red tape.

* Work Requirements: States must require able-bodied recipients to work or participate in work programs after two years of receiving cash welfare benefits or sooner at each state's option as a condition for receiving benefits.

* Curbing Illegitimacy: The Republican bill seeks to reduce the number of children having children by denying cash welfare benefits received through the block grant to mothers under 18 who have children out-of-wedlock, and denying extra payments to families that have additional children while on welfare. They would remain eligible for food programs, Medicaid and other non-cash assistance.

* School Lunches: Increases funding for school lunches and family nutrition programs by 4.5 percent per year $1 billion more over the next five years than we spend today. States are required to use not less than 80 percent of funds for low-income children.

* Child Care: Consolidates nine different federal child care programs into a single block grant to states so that child care assistance can be provided for the same or greater families, but at savings of nearly 15 percent over five years.

Restoring the American dream

Under the House Republican tax-relief bill passed this week, families will be able to keep more of their own money instead of giving it to Washington bureaucrats. The measures include:

* a $500 per-child tax credit for families with incomes below $200,000 4.7 million working families at the lowest income levels will no longer pay any income taxes.

* relief for married couples from the punitive marriage penalty.

* a $5,000 tax credit for couples adopting children.

* allowing non-working spouses to make $2,000 tax-deductible contributions to their IRAs.

* encouraging families to invest in American Dream Savings Accounts that will allow families to contribute up to $4,000 a year in 'back-ended' IRA-type accounts (contributions are taxable but interest earnings accrue tax free), allowing tax-free withdrawals for first time home purchases, post-secondary education expenses and medical expenses.

Senior Citizens Equity Act:

Addressing the concerns of older Americans

House Republicans passed a bill to ensure older Americans will be able to keep more of their earned Social Security benefits and not be penalized for working. The reforms include:

* repealing the Clinton tax hikes on Social Security benefits with incomes above $34,000 (singles) or $44,000 (couples).

* raising the $11,280 Social Security earnings limit to $30,000, allowing seniors over 65 to work without losing Social Security benefits.

* providing tax incentives to encourage individuals to purchase long-term care insurance coverage.

Creating Jobs Through a Strong Economy

Rolling back the regulatory tide

Because excessive government regulation threatens competitiveness of American businesses, stifles entrepreneurial activity and suppresses economic growth and job creation, House Republicans passed regulatory reforms to cut government red tape. The bill:

* Suspends most regulations issued since Nov. 20 and bars agencies from issuing new rules through the rest of the year.

* Requires federal regulators to prepare a formal "impact" review before any regulation is issued and to assure special relief to small businesses. Federal agencies also would have to conduct cost-benefit reviews of regulations if a rule is estimated to cost the economy at least $50 million.

* Requires the federal government to compensate landowners when regulations cause the value of private property to drop more than 20 percent.

Common Sense Legal Reform Act:

Restoring fairness to the legal system

The Republican legal reforms provide concrete steps to restore efficiency and fairness in the civil justice system. Even though the Clinton administration opposed every one of the reforms, all three bills passed on overwhelming bipartisan votes.

* Securities Litigation Report Act: imposes "loser pays" rules in certain cases, requires stricter standards of proof to prevent "fishing expedition" lawsuits, creates a "safe harbor" from litigation for companies that publish market predictions, limits awards and curbs "professional plaintiffs."

* Attorney Accountability Act: institutes a loser-pays rule to encourage settlements, and requires attorneys who file frivolous lawsuits or engage in abusive litigation practices to compensate their victims.

* Common Sense Product Liability and Legal Reform Act: limits the liability of manufacturers for injuries due to drug or alcohol abuse, imposes sanctions for bringing frivolous product liability suits, caps punitive damage awards in all civil suits at $250,000 or three times actual harm (whichever is greater) and caps pain-and- suffering awards in medical suits at $250,000.

Creating economic opportunity

The Republican tax provisions passed in the House provide businesses with incentives to create job opportunities for working Americans. The measures include:

* lowering the corporate capital gains tax.

* allowing small businesses to deduct the first $35,000 they invest in equipment and inventory.

* expanding the deduction for home office use.

* increasing the value of investment depreciation to equal the full value of the original investment.

Text of Address to the Nation by House Speaker Newt Gingrich

Embargoed until 8:00 p.m. EDT

Good evening. I want to thank you for joining me tonight and for this chance to give you, the American people, a report on the new Congress, what we've been doing, what we hope to do, and how we're working to keep faith with what you sent us here to do.

But first, let me thank the hundreds of thousands of Americans who've written me over the past few months. Your letters, nearly 400,000, are full of good ideas and often moving words of encouragement. This letter, addressed to "Dear Mr. Newt," included a portrait of George Washington. It was sent to me by first grader Steven Franzkowiak from Georgia, and I thank Steven and everyone else who wrote me, even if you didn't include a picture of George Washington.

Last September the House Republicans signed a contract with America. We signed this Contract and made some promises to you and to ourselves. You elected us, and for the last 93 days we have been keeping our word. With your help, we're bringing about real change. We made Congress subject to the same laws as everyone else. We cut congressional committee staffs and budgets by 30 percent. And we voted on every item in the Contract. And I can tell you tonight we're going to sell one congressional building and privatize at least one congressional parking lot.

While we've done a lot, this Contract has never been about curing all the ills of the nation. One hundred days can't overturn the neglect of decades. The Contract's purpose has been to show that change is possible, that even in Washington you can do what you say you're going to do. In short, we wanted to prove to you, and I think to us, that democracy still has the vitality and the will to do something about the problems facing our nation. And it seems to me that whether you're a conservative or a liberal, that is a very positive thing.

And so I want to talk about the Contract tonight, our successes and our failures, but I also want to talk about something much larger, because although I've spent the last six months of my life living and breathing and fighting for what's written in this Contract, I know the American people want more than these 10 items.

So what I want to talk with you about tonight is not just what a new political majority on Capitol Hill has accomplished in 100 days, but how all of us together, Republicans and Democrats alike, must totally remake the federal government, to change the very way it thinks, the way it does business, the way it treats its citizens. After all, the purpose of changing government is to improve the lives of our citizens, to strengthen the future of our children, to make our neighborhoods safe and to build a better country. Government is not the end. It is the means.

We Americans wake up every morning, go to work, take our kids to school, fix dinner, do all the things we expect of ourselves, and yet something isn't quite right. There's no confidence that government understands the values and realities of our lives. The government is out of touch and out of control. It is in need of deep and deliberate change. Americans will be able to sleep a little better at night and wake up feeling less anxious about their futures.

I represent the people who work at the Ford plant in Hapeville, Georgia. The Ford Motor Company, like all the domestic auto industry, faced the need to change in order to keep up with tougher competition. Today they produce twice as many cars per employee at three times the quality. And General Motors and Chrysler are doing the very same thing. So are America's small businesses. They're all rethinking the way they operate. Should government be any different. Of course not.

We sincerely believe we can reduce spending and at the same time make government better. You know, virtually every institution in America except government has re-engineered itself to become more efficient over the last decade. They cut spending, provided better products, better education and better service for less.

But I believe we must remake government for reasons much larger than saving money or improving services. The fact is, no civilization can survive with 12-year-olds having babies, with 15-year-olds killing each other, with 17-year-olds dying of AIDS, with 18-year- olds getting diplomas they can't even read. Every night on every local news we see the human tragedies that have grown out of the current welfare state.

As a father of two daughters, I can't ignore the terror and worry parents in our inner cities must feel for their children. Within a half-mile of this Capitol, your Capitol, drugs, violence and despair threaten the lives of our citizens. We cannot ignore our fellow Americans in such desperate straits by thinking that huge amounts of tax dollars release us from our moral responsibility to help these parents and their children. There is no reason the federal government must keep an allegiance to failure. You know, with good will, with common sense, with the courage to change, we can do better for all Americans.

Another fact we cannot turn our head away from is this: No truly moral civilization would burden its children with the economic excesses of the parents and grandparents. Now, this talk of burdening future generations is not just rhetoric. We're talking about hard economic consequences that will limit our children and grandchildren's standard of living. Yet that is what we are doing for the children trapped in poverty, for the children whose futures are trapped by a government debt they're going to have to pay. We have an obligation tonight to talk about the legacy we are leaving our children and our grandchildren, an obligation to talk about the deliberate remaking of our government.

This change will not be accomplished in the next 100 days, but we must start by recognizing the moral and economic failure of the current methods of government.

In these last 100 days, we have begun to change those failed methods. We outlined 10 major proposals in the Contract that begin to break the logjam of the past. The House passed nine out of 10. First, we passed the Shays Act, which makes the Congress obey all the laws that other Americans have to obey. The House passed it, the Senate passed it and the president signed it. So that's one law signed, sealed and delivered.

We passed the balanced budget amendment in the House with bipartisan support. It has been temporarily defeated in the Senate by one vote. Although constitutional amendments are harder to get through Congress because they require a two-thirds vote rather than a simple majority, don't be discouraged. Senator Dole has said he will call it up for another vote. The momentum is with us. And with your help and your voice, I believe it is possible this amendment will pass later in this Congress.

As promised, we introduced a constitutional amendment on term limits, but we failed, even though 85 percent of House Republicans voted for it again, that two-thirds vote. There have been 180 bills introduced to limit congressional terms over America's history, but not one of them ever made it to the House floor until last week, when we brought term limits to a vote. I pledge to you that term limits will be the first vote of the next Congress. So keep the pressure on. Keep your hopes up.

In both the House and the Senate, we passed the line-item veto, just as you asked. It's remarkable that a Republican House and a Republican Senate are giving such a strong tool to the president of the other party. I believe it shows our good-faith determination to cut spending.

Other Contract proposals have passed the House and are being worked on in the Senate. We passed regulatory reform, legal reform and welfare reform. We passed a $500 tax credit per child. We passed an increase in the earning limit for senior citizens so they won't have their Social Security checks cut if they earn extra money. We passed a capital gains tax cut and indexed those gains to spur the savings and investment that creates jobs.

Even with all these successes and others, the Contract with America is only a beginning. It is the preliminary skirmish to the big battles yet to come.

The big battles will deal with how we remake the government of the United States. The measure of everything we do will be whether we are creating a better future with more opportunities for our children.

New ideas, new ways and old- fashioned common sense can improve government while reducing its costs. Let me give you an example. The United States government is the largest purchaser of vacuum tubes in the western world. This is a Federal Aviation Administration tube, based on good solid 1895 technology. This is actually the updated mid-1950s version. When you fly in America, vacuum tubes in the air traffic control system keep you safe. Our purchasing rules are so complicated and so wasteful that our government has not been able in seven years to figure out how to replace vacuum tubes with this. This is a microchip. It has the computing power of 3 million vacuum tubes. So today's government operates this way.

After we remake it, the government of the future will operate this way.

My point is this. The same reliance on the obsolete pervades most of the federal government, not just in regard to computers but in regard to its thinking, its attitudes, its approaches to problems. It's one thing if we're talking about vacuum tubes, but this backward thinking is entirely something else if we're talking about human lives. The purpose of all this change is not simply a better government. It is a better America.

A truly compassionate government would replace the welfare state with opportunity, because the welfare system's greatest cost is the human cost to the poor. In the name of compassion, we have funded a system that is cruel and destroys families. Its failure is reflected by the violence, brutality, child abuse and drug addiction in every local TV news broadcast.

Poor Americans are trapped in unsafe government housing, saddled with rules that are anti-work, anti-family and anti-property. Let me give you some statistics on this failure. Welfare spending now exceeds $300 billion a year. Yet despite all the trillions that have been spent since 1970, the number of children in poverty has increased 40 percent.

On this chart, you'll notice that welfare spending goes up and so does children born outside marriage. Year by year they track each other. The more tax money we spend on welfare, the more children who are born without benefit of family and without strong bonds of love and nurturing. If money alone were the answer, this would be a paradise.

Since money is not the answer, it should be clear we have a moral imperative to remake the welfare system so every American can lead a full life. After all, we believe that all men and all women are endowed by our creator with certain unalienable rights, among which are life, liberty and the pursuit of happiness. We are determined to remake this government until every child of every racial background in every neighborhood in America knows that he or she has all the opportunities of an American.

I believe we have to do a number of things to become an opportunity society. We must restore freedom by ending bureaucratic micromanagement here in Washington. As any good business leader will tell you, decisions should be made as closely as possible to the source of the problem. This country is too big and too diverse for Washington to have the knowledge to make the right decisions on local matters. We've got to return power back to you, to your families, your neighborhoods, your local and state governments. We need to promote economic growth by reducing regulation, reducing taxation and reducing frivolous lawsuits. And everywhere I go, Americans complain about an overly complicated tax code and an arrogant, unpredictable and unfair Internal Revenue Service.

This summer we will begin hearings on bold, decisive reform of the income tax system. We're looking at a simplified flat tax and other ways to bring some sense to the disorder and inequity of our tax system.

You know, another reason for optimism is the tremendous opportunities being created by the new information technologies. Tremendous is a big word, so let me show you an example. This is a traditional telephone cable. This -- I hope you can see it it's pretty small -- is a fiber-optic cable. You can barely see it. This almost invisible fiber-optic cable -- with some pride I can tell you it's made in Norcross, Georgia -- is equal to not one of these -- to 64 of these big, bulky, traditional cables. Now, that is a tremendous opportunity. With these breakthroughs, the most rural parts of America can be connected electronically to the best learning, the best health care and the best work opportunities in the world.

Distance learning can offer new hope to the present inner-city neighborhood, the poorest Indian reservation and the smallest rural community. Distance medicine can bring the best specialist in the world to your health clinic and your hospital.

Furthermore, the breakthroughs in molecular medicine may cure Alzheimer's, eliminate many genetic defects and offer new cures for diabetes, for cancer and for heart disease. These breakthroughs, combined with preventive care and medical innovations, can create better health care for all Americans. And we will pass a reform so that when you change jobs, you can't be denied insurance even if you or your family have health problems.

We will improve Medicare by offering a series of new Medicare options that will increase senior citizens' control over their own health care and guarantee them access to the best and most modern systems of health research and health innovation. My father, my mother and my mother-in-law all rely on Medicare. I know how crucial the Medicare system is to senior Americans. And we will ensure that it continues to provide the care our seniors need with more choices at less cost to the elderly.

All around us, opportunities for a better life are being developed, but our government all too often ignores or even blocks them. We need those breakthroughs which create new jobs, new health and new learning. They give us the opportunity and the economic growth to deal with our budgetary problems. We must get our national finances in order. The time has come to balance the federal budget and to free our children from the burdens upon their prosperity and their lives.

This is a Congressional voting card. This card goes into a box on the House floor and the computer records the members vote. The Congressional voting card is the most expensive credit card in the world. For two generations it has been used to pile up trillions in debt that our children and grandchildren will eventually have to repay.

Now a big debt has a big impact. To make such numbers real, let us give you an example. If you have a child or grandchild born this year, that child is going to pay $187,000 in taxes in their lifetime to pay their share of the interest on the debt. Yes, you heard me right, $187,000 in taxes, in their lifetimes--that's over $3,500 in taxes every year of their working lives just to pay interest on the debt we are leaving them. That's before they are taxed to pay for Social Security or Medicare, education or highways or police or the national defense. You know and I know, that's just not fair.

It was once an American tradition to pay off the mortgage and leave the children the farm. Now we seem to be selling the farm and leaving our children the mortgage.

By 1997, we will pay more for interest on the debt than for the national defense. That's right, more of our tax money will be spent to pay interest on government bonds than we'll pay for the Army, the Navy, the Air Force, the Marine Corps, the intelligence agencies and the defense bureaucracy combined.

Okay, Social Security. I want to reassure all of you who are on Social Security, or will soon retire, that your Social Security is fine. No one will touch your Social Security, period. But we must make sure that the baby boomers' retirements, which are coming up in the next century, are as secure as their parents'. Because the money the government supposedly has been putting aside from the baby boomers Social Security taxes is not there. The government has been borrowing that money to pay for the budget deficit. The Social Security trust fund is simply I.O.U.s from the U.S. Treasury. So when the baby boomers get set to retire, where's the money to pay them going to come from? Well, can't the government just borrow more money? The honest answer is no.

No system, no country is wealthy enough to have unlimited borrowing.

But the answer is clear. The key to protecting the baby boomers Social Security is to balance the budget. That way by the time the baby boomers retire the government will be financially sound enough to pay them. The problem is not Social Security. After all, Social Security would be fine if the federal government would stop borrowing the money. The government can stop borrowing the money when we balance the budget. It is just that simple.

Our goals are simple. We don't want our children to drown in debt. We want baby boomers to be able to retire with the same security as their parents. We want our senior Americans to be able to rely on Medicare without fear.

These are the reasons why, as Franklin Delano Roosevelt said, "Our generation has a rendezvous with destiny." This is the year we rendezvous with our destiny to establish a clear plan to balance the budget. It can no longer be put off. That is why I am speaking to you so frankly. Next month we will propose a budget that is balanced over seven years. The budget can be balanced even with the problems of the federal government. It can be balanced without touching a penny of Social Security and without raising taxes. In fact, spending overall can go up every year. We simply must limit annual spending increases to about 3% between now and 2002.

The key is the willingness to change, to set priorities, to redesign the government, to recognize that this is not the 1960s or '70s but the 1990s and we need a government to match the times. As I've said, Social Security is off the table. But that leaves a lot on the table--corporate welfare, subsidies of every special interest. Defense is on the table. I'm a hawk, but a cheap hawk.

As the budget battle rages over the coming months, you will hear screams from the special interest groups. I'm sure you've already heard the dire cries that we were going to take food out of the mouths of school children. That we were going to feed them ketchup. The fact of the matter is that all we did was vote to increase school lunch money four and a half percent every year for five years and give the money to the states to spend, because we thought they would do a better job than the federal government of ensuring that the children's meals were nutritional.

We believe that if local parents, local school boards and local state legislators visit their children's local schools, they will know firsthand about their children's lunches. Our critics believe that if the school hires a clerk, who doesn't cook anything, to fill out a report to go to the state clerk, who doesn't cook anything but fills out a report so that the national clerk in Washington, who doesn't cook anything, can write you a letter about the school they didn't visit in the country they've never been able to reassure you about the lunch they've never seen. That is the difference in our two approaches.

All I ask is that as we work to balance the budget that you verify the facts on both sides. And then you decide which approach is best.

Whatever the arguments this remains a country of unparalleled possibilities. I was talking the other day to a fellow who does business in Europe. he said what impresses people overseas is that the U.S. can change faster than anybody. That's why we're competitive once again in the world. We as a people have the natural ability to respond to change. That is what we do best when the government is not in the way. Our potential is as great and prosperous as it's ever been in our history. From now on all roads lead forward.

This job can't be done in Washington. We need your participation in a new dialogue. I hope every high school and college student will spend some class time in April or early May looking at the impact of the deficit on their young lives. We are making this speech and our briefing on the budget available though the Library of Congress at Thomas on the Internet. Both are also available from your congressman or congresswoman's office. We want every American to have the facts and participate in the new dialogue.

If I had one message for this country on this day when we celebrate the act of keeping our word, it would be a simple message: Idealism is American. To be romantic is American. It's okay to be a skeptic, but don't be a cynic. It's okay to raise good questions, but don't assume the worst. It's okay to report difficulties, but it's equally good to report victories.

Yes , we have problems, and of course it's going to be difficult to enact these things. That's the American way. And of course, we're going to have to work hard, and off course we're going to have to negotiate with the President, and of course the American people are going to have to let their will be known. But why should we be afraid of that? That is freedom.

I am here tonight to say that we're going to open a dialogue, because we want to create a new partnership with the American people, a plan to remake the government and balance the budget that is the American peoples' plan--not the House Republican plan, not the Gingrich plan, but the plan of the American people. And it is in that spirit of committing ourselves idealistically, committing ourselves romantically, believing in American, that we celebrate having kept our word. And we promise to begin a new partnership, so that together we and the American people can give our children and our country a new bit of freedom.


Real and significant change

The takeaways from the 1994 GOP victory about what works and what doesn’t in campaign politics are important. But it’s what Republicans did with the victory that matters more as we reflect on the contract’s 25th anniversary. For Republicans after the election, the contract gave them the means to deliver a record of accomplishments that were real and significant and showed the value of conservative economic principles.

In their first two years, Republicans slowed the expansion of government and Clinton in his 1996 State of the Union famously acknowledged, “The era of big government is over.” It was a remarkable moment for Gingrich and his caucus, leaving many in the press to comment that Clinton sounded more like a Republican.

This achievement was shortly followed by welfare reform. Then in 1997, Republicans pushed through tax cuts that reflected many of the principles laid out by another conservative thinker, Jack Kemp. Not surprisingly, critics said it would increase the deficit by $400 billion over ten years.

But the tax cuts didn’t push the country into bankruptcy. To the contrary, in 1998, the budget was balanced for the first time since 1969 and stayed in balance through 2001. In fact, the country actually ran a surplus of $236 billion in 2000.

On top of that, economic growth was 4 percent or higher from 1997 through 2000, an extraordinary four consecutive years, and unemployment rates, which had been above 7 percent at the beginning of the decade, fell to under 5 percent in 1997. By the end of 2000, the rate was under 4 percent. For three consecutive years, 1997 through 1999, the economy produced more than 3 million jobs each year, a record that still stands.

The policy accomplishments of the Republican-controlled 104th Congress were remarkable. Convincing the Democratic president to get on board with a center-right Republican approach to economic growth produced one the most robust economic periods in American history.


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Review

“An indispensable guide.” —George F. Will

“A talented reporter with a keen sense of history, Major Garrett convincingly argues that in 1994, when Republicans ended forty years of Democratic control of the House of Representatives, a new kind of conservative changed the dynamics of Congress and then the trajectory of American politics. This book is an indispensable guide to the transformed political terrain that continues to shape what Republicans want to do and what Democrats can do.”—George F. Will, Pulitzer Prize–winning columnist

“Major Garrett covered the events leading up to the Contract with America and the historic achievements that followed as aggressively as anyone in Washington. Now he has produced the most historically accurate account of the Republican Revolution, placing the reader in the middle of the action. He obliterates the Left’s attempts to explain away its policy failures by reporting how implementation of the Contract changed Washington politics and policy to the benefit of the country.” —Newt Gingrich, former Speaker of the House

“Major Garrett brings the Republican Revolution vividly back to life in this highly informed account of not only how it came about but also how its consequences reverberate to this day. A must-read for anyone interested in what is indeed the enduring revolution of our time.” —Charles Krauthammer, Pulitzer Prize–winning columnist

“Until I read The Enduring Revolution I thought I had lived and understood the Contract with America from start to finish. But this book is full of revelations even for those of us who thought we knew all about it. Most important, Major Garrett has explained the enduring legacy of the Contract.” —Dick Armey, former House Majority Leader

“A revelation. Major Garrett, one of America’s best reporters, has produced a truly honorable and significant study, based on smart analysis and rock-solid research.” —Douglas Brinkley, director of the Eisenhower Center for American Studies, University of New Orleans

“A veteran and fair-minded Washington reporter, Major Garrett presents a provocative and important thesis: the 1994 congressional elections and the Contract with America fundamentally reshaped U.S. politics and marked a cultural and political revolution that reverberates today. Whether one agrees or not with his argument, Garrett offers a valuable behind-the-scenes look at critical and dramatic events that helped define the divisive politics of twenty-first-century America.” —David Corn, Washington editor of The Nation

“This book is a revelation. The political establishment needs to read it, but that may be too much to hope for. Too bad for them. They will be missing a terrific read. The inside story of the government shutdown of 1995 alone is worth the price of the book.” —Brit Hume, host of the Fox News Channel’s Special Report with Brit Hume

The Enduring Revolution shows how the Contract with America has reverberated through our politics ever since 1994, shaping how Democrats as well as Republicans approach issues ranging from taxes to missile defense. It is also a crackling good read.” —Michael Barone, coauthor of The Almanac of American Politics

From the Inside Flap

To most observers - including many conservatives - the so-called Republican Revolution of 1994 was anything but revolutionary, and the Contract with America that propelled the GOP into power was just a gimmick.

But in The Enduring Revolution, Fox News national reporter Major Garrett turns this conventional wisdom on its head, revealing how the Contract with America and the Republican Revolution have changed our lives in startling ways. The Republicans have fundamentally altered our approach to taxes, national defense, terrorism, welfare, entitlements, health care, education, abortion, gun control, and crime, among other issues. Quite simply, America is a vastly different place after the Contract than it was before it.

If you think the 2004 elections re?ected a political realignment in this country, think again. That realignment occured a decade earlier the Republicans' victory in 1994 made George W. Bush's election and reelection possible.

Based on exclusive interviews with more than fifty key players from both sides of the aisle, and complete with more than thirty pages of crucial, previously unpublished confidential documents, The Enduring Revolution offers the dramatic behind-the-scenes story of how the Contract with America came into being and how this one document has defined American politics for a decade. Garrett's exhaustive research and remarkable access enable him to tell a story that will surprise even the most seasoned political observers.

In The Enduring Revolution, you'll learn:

*How George W. Bush and John Kerry built much of their 2004 presidential campaigns around the Contract with America

*How conservatives angered by the recent growth of the federal government have overlooked critical Republican victories on spending

*How Bill Clinton's supposed great achievements, welfare reform and a balanced budget, resulted directly from the Contract with America - and actually reflected his weakness as a leader

*How the Republican majority made the 2003 Iraq invasion possible years before our military campaign began

*How our intelligence community's problems in the War on Terror would have been much worse had there been no Republican Revolution

Undeniably, Republican leaders from Newt Gingrich to Dennis Hastert have made critical mistakes - and Garrett provides the inside story on how and why those failures occurred. But he also reveals how the usual focus on setbacks ignores the jaw-dropping changes the Contract with America has produced.

The Enduring Revolution is a stunning reassessment of a crucial but misunderstood episode in our political history.

About the Author

Excerpt. © Reprinted by permission. All rights reserved.

The 104th Congress, of 1995󈟌, was the most important Congress of the twentieth century. Quite possibly it was the most important Congress in American history.

Most Americans don’t think much about Congress. And it’s not just the general public. Historians love to rank presidents, but they never rank Congresses. Why? Because Congress typically doesn’t matter. That is, Congress typically doesn’t matter as much as the president with whom it interacts—the leader who can set the nation’s agenda even if he can’t pass the laws. Whereas the president is an individual with a clear vision and often with the ability to rally Americans behind that vision, Congress is a hulking, plodding legislative body. Congress is not generally responsible for new, provocative ideas rather, it is where such ideas go to be watered down by endless compromises and attached to other costly programs by politicians eager to impress their constituents.

That is how it normally works, anyway. Even when Congress has had big clashes with presidents, it has almost always been when Congress has resisted bold new ideas or resented efforts to uproot or challenge protected industries or orthodoxies. In 1832, Congress resisted Andrew Jackson’s effort to kill the National Bank. In 1903, Congress resisted Theodore Roosevelt’s attempts to tame the trusts. In 1919, Congress dealt a crushing blow to Woodrow Wilson’s League of Nations by refusing to ratify the Treaty of Versailles. A series of Congresses used political intimidation to prevent Presidents Truman, Eisenhower, and Kennedy from proposing civil rights legislation.

But the Congress sworn in in January 1995 was anything but typical. In fact, this new Congress was hailed as bringing a “revolution” to American politics. Part of it, of course, was that for the first time in four decades the Republicans had taken control of Congress. And in truth, the Democrats’ dominion over the House of Representatives extended back much further than to 1954, the election in which the Democrats regained the numerical advantage in the House they had lost in 1952. Democrats had really seized the levers of government in 1930, at the dawn of the Great Depression, and spent more than six decades consolidating that power—through the New Deal, Truman’s Fair Deal, the civil rights era, the Great Society, and the large, liberal, and activist Watergate class of 1974 that redefined Democratic congressional power for the next twenty years. The Democratic Party controlled the House of Representatives for sixty of the sixty-four years between 1930 and 1994, and the Senate for fifty-four of those sixty-four years. The Republican Congress elected in 1952, on Dwight D. Eisenhower’s coattails, was, in essence, an accidental majority—the Democrats regained power in the next election. The same could be said for the Republican majority that was elected in 1946: Republicans offered no coherent political alternative to President Truman’s efforts to expand the New Deal, which allowed Truman to run for reelection in 1948 against the “Do Nothing” Republican Congress. Divorced from an agenda and a political plan to consolidate gains, the Republican majority disappeared as quickly as it had appeared. (So uncertain of their majority status were House Republicans in 1946 and 1952 that GOP leaders kept the offices they held while in the minority, ceding the larger and more ornately decorated real estate to their Democratic betters.)

Yet something more was happening in the 1994 election. This time the Republicans would not quickly cede the ground they had taken, as they had after 1946 and 1952. Here was a different breed of Republican. The Republicans of the 104th Congress were first and foremost about ideas. Ideas drove the politics. Ideas drove the reforms. Ideas drove the agenda. Ideas drove President Clinton away from the leftist congressional barons who had hijacked the centrist agenda he campaigned on in 1992 and turned it (at times with far too much Clintonian complicity) into an unrecognizable hash of tax increases, pork-barrel stimulus spending, nationalized health care, costly and timid welfare reform, drastic defense cuts, and no middle-class tax cut—for even while Clinton publicly demonized the new Republican majority for his short-term political benefit, he was adapting to the new center-right political terrain defined by the 1994 election, and defined by the Republicans’ ideas. Ultimately, the Republicans’ ideas profoundly reshaped our nation—and continue to shape it to this day.

These ideas were codified in the Contract with America, which Republicans publicly unveiled at a September 1994 event on the West Front of the U.S. Capitol. Many Americans remember the ceremony on the Capitol steps, as 337 Republicans who either were in the House already or were campaigning to win seats gathered to sign the Contract. But the Contract was not designed just for that one-day press event. It offered a detailed, comprehensive agenda touching everything from internal congressional reform to national defense, welfare to economic growth, term limits to balancing the budget, crime control to tort reform.

The Contract started with a unified set of principles for which these 337 Republicans stood: individual liberty, economic opportunity, limited government, personal responsibility, and security at home and abroad. From these principles arose a two-part agenda: The first part laid out eight “major reforms” that were “aimed at restoring the faith and trust of the American people in their government.” These reforms applied to the management of Congress for instance, the Republicans called for changing the rules in Congress so lawmakers had to live under all major federal regulations, cutting the number of House committees and the size of committee staffs, and requiring a three-fifths majority vote to pass a tax increase. The second part, a ten-point legislative agenda, was even more important. As this book will reveal, it was the result of intense intraparty debate, and the culmination of years of work on the part of numerous Republicans both inside and outside of Congress. And to show their commitment to the agenda, the Republicans vowed that if they took the majority, they would vote on all ten planks of the Contract within the first hundred days of taking power. “If we break this contract, throw us out. We mean it.”

In the ten planks, the Republicans called for:

1.A balanced-budget amendment and a legislative line-item veto to restore fiscal responsibility to Congress

2.A strong anti-crime bill that expanded the death penalty and required longer jail sentences for felons

3.A “personal responsibility act” that would reform welfare by forcing able-bodied recipients off public assistance after two years and reduce welfare spending

4.A “family reinforcement act” that would, among other things, provide tax incentives for adoption and establish an elderly dependent-care tax credit

5.A $500-per-child tax credit, a reduction of taxes on married couples, and the creation of tax-free savings accounts available to help families cover the cost of college tuition, first-time home purchases, or medical expenses

6.A strong national security defense bill that would protect defense spending from further cuts, eliminate any possible United Nations command of U.S. troops, and call for the swift development and deployment of a national ballistic missile defense system

7.Allowing seniors to earn more without losing Social Security benefits

8.Eliminating federal unfunded mandates (that is, federal laws that require states or communities to take particular actions but do not provide the funds necessary for the actions) and passing other reforms to create new jobs and increase wages, such as reducing the capital gains tax and providing incentives for small businesses

9.Reducing damages awarded in civil cases and making other “commonsense legal reforms”

10.Term limits on senators and congressman

The legislative language behind each and every plank of the Contract with America was already written before the Contract was unveiled—pages and pages of legislation, in fact. This may sound like a minor matter, but actually it is the most significant part of the story. The Contract was much more than an easy-to-read political manifesto. To be sure, the ten planks were reduced for public consumption to catchy, focus-group-tested phrases, much as other campaign manifestos are constructed. But Contract task forces produced a complete bill for each plank, one that voters could scrutinize before the election. It was an arduous process persuading lawmakers who had never been in the majority to stop thinking about issues from the perspective of Republicans playing off Democratic proposals and start thinking of bills they wanted to become law. Operating as the minority party, Republicans created a political agenda they believed would give them real legislative power. By painstakingly turning “issues” into legislative documents, the Republican authors of the Contract made it impossible for their agenda to disappear after Election Day 1994, as so many election-year manifestos do. With tax cuts, welfare reform, defense spending, ballistic missile defense, prison and crime reforms, and the line-item veto, Republicans changed the country through the power of ideas and the unshakable desire to implement them. Unlike any other political document in American history, the Contract lived a more important life after the last ballot was counted than it did before the first vote was cast.

Two other Congresses of the twentieth century can claim the mantle “historic”—the first New Deal Congr.


Congress runs into 'Republican Revolution' Nov. 8, 1994

On this day in 1994, the Republicans won control of both houses of Congress for the first time in 40 years.

The newly empowered GOP united under the “Contract with America,” a 10-point legislative plan to cut federal taxes, balance the budget and dismantle a host of welfare programs enacted and expanded during the decades of Democratic rule.

The Republicans named Rep. Newt Gingrich of Georgia as speaker, replacing Rep. Tom Foley of Washington, one of the incumbents defeated in the 54-seat swing from Democrats to Republicans.

Within the first 100 days of the 104th Congress, the Gingrich-led House enacted every bill cited in the Contract with America, except a proposed constitutional amendment mandating term limits for members of Congress.

In furthering what the press quickly dubbed the “Republican Revolution,” Gingrich and his newly emboldened conservative allies capitalized on the perception that the House Democratic leadership had engaged in corrupt practices, as well as on broad dissatisfaction among independent voters with the policies of President Bill Clinton.

No Republican incumbent lost in the midterm election.

Foley became the first speaker to fail to win reelection since the Civil War. Other major upsets included the defeat of such powerful long-serving representatives as Ways and Means Committee Chairman Dan Rostenkowski (D-Ill.) and Judiciary Committee Chairman Jack Brooks (D-Texas).

In all, 34 incumbent Democrats were defeated, although several of them, including Reps. David Price (N.C.), Ted Strickland (Ohio) and Jay Inslee (Wash.), regained seats in subsequent contests.

Evangelicals played a major role in the massive swing toward the Republicans. One national poll showed 27 percent of all voters identified themselves as a born-again or evangelical Christian, compared with 18 percent in 1988.

GOP House candidates outpolled Democrats among white evangelicals by 76 to 24 percent.

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How the 1994 'Contract With America' Led to a Republican Revolution - HISTORY

As Republican Members of the House of Representatives and as citizens seeking to join that body we propose not just to change its policies, but even more important, to restore the bonds of trust between the people and their elected representatives.

That is why in this era of official evasion and posturing, we offer instead a detailed agenda for national renewal, a written commitment with no fine print.

This year's election offers the chance, after four decades of one-party control, to bring to the House a new majority that will transform the way Congress works. That historic change would be the end of government that is too big, too intrusive, and too easy with the public's money. It can be the beginning of a Congress that respects the values and shares the faith of the American family.

Like Lincoln, our first Republican president, we intend to act "with firmness in the right, as God gives us to see the right." To restore accountability to Congress. To end its cycle of scandal and disgrace. To make us all proud again of the way free people govern themselves. On the first day of the 104th Congress, the new Republican majority will immediately pass the following major reforms, aimed at restoring the faith and trust of the American people in their government:

FIRST, require all laws that apply to the rest of the country also apply equally to the Congress

SECOND, select a major, independent auditing firm to conduct a comprehensive audit of Congress for waste, fraud or abuse

THIRD, cut the number of House committees, and cut committee staff by one third

FOURTH, limit the terms of all committee chairs

FIFTH, ban the casting of proxy votes in committee

SIXTH, require committee meetings to be open to the public

SEVENTH, require a three-fifths majority vote to pass a tax increase

EIGHTH, guarantee an honest accounting of our Federal Budget by implementing zero base-line budgeting.

Thereafter, within the first 100 days of the 104th Congress, we shall bring to the House Floor the following bills, each to be given full and open debate, each to be given a clear and fair vote and each to be immediately available this day for public inspection and scrutiny.

1. THE FISCAL RESPONSIBILITY ACT

A balanced budget/tax limitation amendment and a legislative line-item veto to restore fiscal responsibility to an out-of-control Congress, requiring them to live under the same budget constraints as families and businesses.

2. THE TAKING BACK OUR STREETS ACT

An anti-crime package including stronger truth-in-sentencing, "good faith" exclusionary rule exemptions, effective death penalty provisions, and cuts in social spending from this summer's "Crime" bill to fund prison construction and additional law enforcement to keep people secure in their neighborhoods and kids safe in their schools.

3. THE PERSONAL RESPONSIBILITY ACT

Discourage illegitimacy and teen pregnancy by prohibiting welfare to minor mothers and ending increased AFDC (Aid to Families with Dependent Children) for additional children while on welfare, cut spending for welfare programs, and enact a tough two-years-and-out provision with work requirements to promote individual responsibility.

4. THE FAMILY REINFORCEMENT ACT

Child support enforcement, tax incentives for adoption, strengthening rights of parents in their children's education, stronger child pornography laws, and an elderly dependent care tax credit to reinforce the central role of families in American society.

5. THE AMERICAN DREAM RESTORATION ACT

A $500 per child tax credit, begin repeal of the marriage tax penalty, and creation of American Dream Savings Accounts to provide middle class tax relief.

6. THE NATIONAL SECURITY RESTORATION ACT

No U.S. troops under U.N. command and restoration of the essential parts of our national security funding to strengthen our national defense and maintain our credibility around the world.

7. THE SENIOR CITIZENS FAIRNESS ACT

Raise the Social Security earnings limit which currently forces seniors out of the work force, repeal the 1993 tax hikes on Social Security benefits and provide tax incentives for private long-term care insurance to let Older Americans keep more of what they have earned over the years.

8. THE JOB CREATION AND WAGE ENHANCEMENT ACT

Small business incentives, capital gains cut and indexation, neutral cost recovery, risk assessment/cost-benefit analysis, strengthening the Regulatory Flexibility Act and unfunded mandate reform to create jobs and raise worker wages.

9. THE COMMON SENSE LEGAL REFORM ACT

"Loser pays" laws, reasonable limits on punitive damages and reform of product liability laws to stem the endless tide of litigation.

10. THE CITIZEN LEGISLATURE ACT

A first-ever vote on term limits to replace career politicians with citizen legislators.


'Pledge' doesn't come close to the 'Contract with America'

The predictions of big gains for the GOP in November's elections have brought on inevitable comparisons to the Newt Gingrich-led Republican revolution of 1994, and those comparisons got stronger today with the House Republican leadership's release of its "Pledge to America," an obvious echo of the "Contract with America" of 16 years ago. But if the "Pledge" is an echo of its predecessor, it is a weak one. Putting aside the question of whether the ideas espoused in either GOP document are good ones, it is clear that the current Republican promise to voters is far less specific and bold than the one the party made in 1994.

The "Contract with America" was just over two pages long, but it packed in some big ideas. It began with an eight-point plan to reform the way Congress operates, such as requiring that all laws apply equally to members of Congress and the American people, putting limits on the length of service of committee chairs, opening committee meetings to the public and requiring a three-fifths majority for a tax increase. It was followed by 10 bills the Republicans promised to vote on within 100 days of taking over the majority, including a balanced budget amendment a line-item veto for the president an anti-crime bill to provide more money for prisons and less for social programs welfare reform child tax credits and the repeal of the marriage penalty tort reform and term limits for Congress. The text of each bill was made public from the beginning.

The "Pledge to America" is 21 pages long, and while some of the philosophy behind it mirrors the "Contract with America" in its emphasis on smaller government and lower taxes, the medicine it calls for isn't nearly so strong. Rather than proposing a balanced budget amendment, the pledge calls for a freeze on many, but not all, domestic programs, saving about $100 billion next year or approximately 7.7 percent of the projected $1.3 trillion budget deficit. The pledge also calls for a federal hiring freeze — but excludes defense or public safety-related jobs. And the current GOP version of a freeze wouldn't actually shrink the size of government, as it would allow the replacement of workers who leave. When it comes to the real drivers of the nation's long-term budget problems — Medicare and Social Security — the GOP offers a solution no more specific than "reviewing them regularly."

The savings promoted in the pledge are dwarfed by the expense of the tax cuts it contains. A key plank is making permanent all of the Bush tax cuts, which are set to expire Jan. 1. That will cost more than $3 trillion over the next decade. Just keeping the tax cuts for the wealthy, which President Barack Obama opposes but Republicans favor, would cost $700 billion over the next 10 years. Republicans are also proposing a new tax break for small businesses and some increased expenditures, including more spending for a ballistic missile shield.

The Republicans are releasing their pledge on the day when some popular elements of President Obama's health reform legislation take effect, including those that prevent insurance companies from dropping coverage after someone gets sick, allow young adults to stay on their parents' policies until they are 26, and eliminate lifetime caps on benefits. The Republican pledge calls for a repeal of health care reform and replacing it with a patchwork plan that would do little if anything to reduce the number of uninsured. The GOP would include some of the goodies in the Obama plan, such as preventing people from being denied coverage because of pre-existing conditions, but not the elements that make those benefits possible, such as the requirement that all Americans have health insurance — which, back in the 1990s, was a Republican idea. (Without that requirement, people would have no incentive to get coverage until they're sick, destroying the whole concept of insurance.)

In a nod to the tea party concern that Congress is acting well beyond the powers the Founding Fathers intended to give it, the pledge calls for requiring legislators to cite the specific section of the Constitution that authorizes any given action. This is pretty meaningless. Just because a congressman says a bill falls under the authority of the Commerce Clause doesn't make it so. In fairness, some of the other ideas the Republicans have for reforming congressional operations are good, at least in theory, and address issues of the day in much the same way the original contract did in 1994. The Republicans are proposing to post bills online three days before they're voted on, to allow debate and votes on amendments to cut spending from either party, and to end the practice of attaching unrelated pieces of legislation to "must-pass" bills.

The fact that it took months of debate within the Republican caucus about whether to advance even so milquetoast a proposal is telling. In 1994, more than 100 congressional Republicans and candidates signed the "Contract with America" in a rally on the Capitol steps. Today, the "Pledge to America" was given a soft rollout at a hardware store in Virginia, and there is no push to have candidates sign on. The Washington Post reported today that House Minority Leader John Boehner and his lieutenants concluded that they needed to prove they were ready to govern and would adopt an "80-20" approach to the election — meaning, the campaign would be 80 percent about criticizing Mr. Obama and the Democrats and 20 percent about telling voters what they would do if they win.

Say what you will about the Gingrich revolution, but the Republicans elected in 1994 came to Washington with a mission. The current crop of Republicans may be just as successful in capitalizing on voters' anger, but the "Pledge to America," wordy as it is, does little to transform the "Party of No" into the "Party of Ideas."


Let the States Do It

The Republicans have touted their strategy as turning more power over to the states to design and administer social programs. Past performance gives little cause for comfort at this prospect. The federalization of social welfare programs in the United States occurred in response to a collapse of the capacity of the states to handle distress during the Clutch Plague. With luck we will never again experience such a crisis. Recessions, however, are a fact of life indeed, regional recessions have become common in recent decades even when the national economy is prospering. States simply do not have the resources of the federal government to increase spending when their economies go sour. Federal entitlement programs provide countercyclical benefits to the nation that boost the economy during hard times and even out the economic fortunes of different regions. To assume that states can or Congress will provide the extra aid that is needed in as timely and as well targeted a fashion is fantasy.

Whether state legislators are as warm hearted as their federal counterparts is not the issue. States compete with each other to attract business investment. Low taxes are widely believed to be an important selling point, and the same people who argue that social welfare policy should be left to the states regularly argue on the state level that taxes and social spending should be reduced to make the state more "competitive." This conventional understanding of how best to compete for jobs acts as a brake on the more generous impulses of state legislatures and exerts a steady downward pressure on social spending.

The recent history of welfare benefits demonstrates the problem. States presently set AFDC benefit levels and completely control their own General Assistance programs, which serve destitute people not covered by federal programs. Over the past two decades states have permitted average welfare benefit levels to erode to approximately half their former value, and General Assistance programs have recently been the target of a flurry of draconian budget cuts. In Michigan, where General Assistance for "able-bodied" persons was entirely eliminated, only 20 percent of the program's former recipients found work lasting most of the year following the termination of their benefits and 25 percent reported being homeless seven months after their benefits ended.


The Enduring Revolution : How the Contract with America Continues to Shape the Nation

To most observers—including many conservatives—the so-called Republican Revolution of 1994 was anything but revolutionary, and the Contract with America that propelled the GOP into power was just a gimmick.

But in The Enduring Revolution, Fox News national reporter Major Garrett turns this conventional wisdom on its head, revealing how the Contract with America and the Republican Revolution have changed our lives in startling ways. The Republicans have fundamentally altered our approach to taxes, national defense, terrorism, welfare, entitlements, health care, education, abortion, gun control, and crime, among other issues. Quite simply, America is a vastly different place after the Contract than it was before it.

If you think the 2004 elections re?ected a political realignment in this country, think again. That realignment occured a decade earlier the Republicans’ victory in 1994 made George W. Bush’s election and reelection possible.

Based on exclusive interviews with more than fifty key players from both sides of the aisle, and complete with more than thirty pages of crucial, previously unpublished confidential documents, The Enduring Revolution offers the dramatic behind-the-scenes story of how the Contract with America came into being and how this one document has defined American politics for a decade. Garrett’s exhaustive research and remarkable access enable him to tell a story that will surprise even the most seasoned political observers.

In The Enduring Revolution, you’ll learn:

•How George W. Bush and John Kerry built much of their 2004 presidential campaigns around the Contract with America

•How conservatives angered by the recent growth of the federal government have overlooked critical Republican victories on spending

•How Bill Clinton’s supposed great achievements, welfare reform and a balanced budget, resulted directly from the Contract with America—and actually reflected his weakness as a leader

•How the Republican majority made the 2003 Iraq invasion possible years before our military campaign began

•How our intelligence community’s problems in the War on Terror would have been much worse had there been no Republican Revolution

Undeniably, Republican leaders from Newt Gingrich to Dennis Hastert have made critical mistakes—and Garrett provides the inside story on how and why those failures occurred. But he also reveals how the usual focus on setbacks ignores the jaw-dropping changes the Contract with America has produced.

The Enduring Revolution is a stunning reassessment of a crucial but misunderstood episode in our political history.


The Republican Revolution at 10: Lasting Legacy or Faded Vision?

How have the promises and peformance of the Republican Revolution played out over the last decade? Former House Speaker Newt Gingrich, architect of the Contract with America assesses the past 10 years in Congress.

"We figured we had a 3 to 5 year cycle in which to carry out our program," former Speaker Newt Gingrich said of the Republican revolution launched in 1994 with the Contract with America. As it turned out, according to Gingrich, the revolution culminated with the balanced budget agreement struck between congressional Republicans and President Bill Clinton in 1997. Gingrich stepped down as House Speaker the following year at the end of the 1998 session. Gingrich said the GOP takeover of Congress in 1995 was the result of long years of planning, recruiting, and training candidates. "We were able to accomplish both political change and a change in ideas simultaneously in 1994 because we were standing on the shoulders of Ronald Reagan" and the ideas he brought to the fore on cutting taxes, reducing the role of government, strengthening our defenses, and reforming welfare.

Vic Fazio, a former Democratic House member from Sacramento, California, entered and exited the Congress the same years as Gingrich (1978 and 1998). Fazio said he had the "misfortune" of being chairman of the Democratic Congressional Campaign Committee (DCCC) when Republicans began picking up seats in the House, and then being chairman of the House Democratic Caucus for the two congresses of the Gingrich speakership. "Newt's efforts and the Contract worked. They brought together candidates to run on common ground and thereby nationalized a mid-term election." Fazio added that the effort captured the attention of the press who tended to empathize with the Republicans' complaints about 40 years of Democratic rule in Congress. Republicans exploited the House bank and post office scandals, and were able to block Clinton's healthcare initiative because "some committee chairs cared more about their committees' jurisdictional turf than they did about getting things done." Fazio said the Republicans also managed to use the 4.3 cents per gallon gas tax increase in Clinton's reconciliation package to electoral advantage, even though they have not bothered to repeal it in the 12 years since.

While the panelists agreed that Republicans had managed to change the nation's policy agenda over the last decade with different priorities than the Democrats, they have been less successful in changing the way Congress does business, even though congressional reform and accountability were a big part of their Contract and campaign themes. Fazio gave Gingrich credit for cutting some committees and staff and changing some jurisdictions, but on other reforms there has been backsliding. Instead of the openness promised, more and more committee decisions are made behind closed doors, without the participation of or consultation with minority Democrats, and majority and minority members are increasingly being denied the ability to offer House floor amendments, Fazio noted.

Political scientist Sarah Binder says the Republicans' procedural tactics are simply an extension of the tactics used by previous Democratic Speakers like Tip O'Neill (Ma.), Jim Wright (Texas), and Tom Foley (Wash.), "though Republicans have ratcheted things up a bit" in terms of the frequency and intensity of their governing techniques. Binder said the trend is a natural outgrowth of the move away from committee government to party government in Congress begun in the mid-1970s.

Former Speaker Gingrich warned, though, that "The House is too tight and the Senate is too loose," and Republicans will ultimately hurt themselves by running roughshod over the minority even on unimportant matters. "There will be little chance to appeal for bipartisanship on important issues if the Republicans have so alienated and angered the minority at practically every turn," Gingrich observed.

However, Binder said there was little chance Republicans would expand the rights of the minority with their majority margin so small. "Even if Republicans are more divided on policy matters now than before, their electoral goals have held them together. I am struck by how much Republicans have adapted to the old ways of doing things." Fazio agreed, saying, "they have concluded that absolute control is the only way to preserve a Republican majority. Keeping power is more important than any other value or priority."

LA Times reporter Janet Hook agreed that the locus of power in the House had shifted from the committees to the party leaders. "It used to be if you wanted information on legislation or the decision making process, you'd go to the committee chairs like Danny Rostenkowski at Ways and Means or John Dingell at Commerce. Today if you want to know what's going on, you go the party leadership." Hook added that she was "astonished that the term limits on committee chairs is still on the books." The three-term limit (six years) was set in House rules in 1995, and there has subsequently been a complete turnover in chairmanships. Hook said the term limits are one reason the leaders have remained powerful since they now pick the chairmen, sometimes without regard to seniority, as they just did with the Appropriations Committee. This keeps the chairs loyal to the leaders and party caucus. Hook said the change has been salutary for the system because "you do get new blood."

Hook observed that the legacy of the Republicans today is not what they set out to achieve in 1995. "In 1994 they ran on smaller government. You don't hear much talk about that today. Maybe it's because they get to make decisions on where the money is spent and on what programs. Maybe it's partly the result of 9/11 and the need for more government to address the terrorist threat."

Fazio concluded that Republicans have gone back on so many of their original goals and promises that they have little credibility today. He mentioned the recent changes in ethics rules passed by Republicans to protect their whip from being removed from leadership if he is indicted (a rule they reversed course on after the election). Even the so-called "Congressional Accountability Act," which aims to apply private sector labor laws to Congress, is being eroded by leadership attempts to argue in the courts that Congress is protected by the "speech or debate" clause against employee discrimination suits, Fazio noted.

Gingrich concluded that if the Republicans in Congress are perceived by the people as a political machine instead of a political party of the people, then they could be vulnerable in 2006 or 2008. "If Democrats move more to the center and become a reform party, they could be a formidable threat." Gingrich said the issues that could turn off the Republican base and change the current political balance are if things get worse on the economy or Iraq as the election approaches.


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Comments:

  1. Tojagami

    Excuse, I have thought and have removed the idea

  2. Wright

    Happiness has changed me!

  3. Jarret

    What phrase... super, magnificent idea



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