Will Senate Republicans Betray the House GOP?

By any stretch of the imagination this ought to be the moment for which the Republicans have been waiting. The country is teetering between a recession, or worse, and what could be a magnificent recovery. It is going to come to a head in the battle brewing in the Congress in respect of the budget. A good way to get into it is Larry Kudlow’s courageous columns, in the Sun and on Fox Business Network, in respect of the current crisis.The thing about Mr. Kudlow is that he has been on this story since his pre-journalistic days (he started out at the Federal Reserve Bank of New York). Not only is he fluent in the economic issues but he knows better than almost any writer on this beat how to — as the late editor of the Atlanta Constitution used to phrase it — put the hay down where us mules can get to it. Right now Mr. Kudlow is warning of a Republican Party that has become unmanned.As does the junior senator from Kentucky, Rand Paul, who warns that, having “completely and totally abdicated the power of the purse,” Republicans “are emasculated.” He contends the GOP “have no power and they are unwilling to gain that power back.” Mr. Kudlow is urging the GOP solons to “get your manhood back” and stop the runaway omnibus spending bill brewing on Capitol Hill, even if it requires shutting down the government. Rarely has the lame-duck session of the Congress become so bitter between members of the same party. In acceding to the so-called “bipartisan, bicameral” framework brewing between Senators Leahy and Shelby, the sense in the Republican caucus in the House is that Mr. Shelby has disgraced himself in his last weeks in office. This whole matter, they argue, should be delayed until the 118th House is seated with Republicans in control.Mr. Kudlow also reminds Republicans of the political opportunity open to them if they look more closely at what’s going on at the Federal Reserve. After first suggesting the worst inflation in 40 years was “transitory,” the central bank is now attempting to drive the economy into a recession in its drive “to get 7 percent inflation down to its 2 percent target,” as Mr. Kudlow puts it. “You know, there might be a better way,” he says. Mr. Kudlow’s advice is to heed Milton Friedman’s definition of inflation as “too much money chasing too few goods.” He concedes the central bank, by ratcheting up interest rates, “is doing its job now absorbing excess money.” What’s missing are supply-side measures to address the “too few goods.” That’s where, he says, a GOP agenda of “limited government, lower spending, reduced tax rates,” less regulation, and more energy production would help.The thing that infuriates Mr. Kudlow — and Senator Paul — is that the Republicans can prevail in the Senate fight if they can block cloture, which can be accomplished if 41 Republican senators stand together. We understand that will open them to charges of favoring a default. Our answer to that is that with a collapse in the value of the dollar to barely more than an 1,800th of an ounce of gold, the default has already occurred. If Congressman Kevin McCarthy and the House Republicans, in league with visionary senators like Rand Paul, want to seize the lead in this fight, they’re going to have to offer positive, uplifting goals. Certainly supply-side, pro-growth measures — smaller government, tax cuts, de-regulation — a major part of the equation. The real home run, the great opportunity for the 118th House, is to send the Senate a program for monetary reform.No point in saying it can’t happen. Within weeks of becoming speaker in 2015, Paul Ryan sent the Senate just such a package — only to see it buried in the Banking Committee. That committee was then chaired by, in Richard Shelby, the same senator who is trying to sell the House Republicans, taking them — and Rand Paul and other Senators — for granted in the “bicameral, bipartisan” deal he is trying to hatch with Senator Leahy.The thing to remember is that Senators Leahy and Shelby will soon be gone. That will give Mr. McCarthy and other conservatives a chance to advance a plank that has been in nearly every Republican party platform for a generation — the creation of a monetary commission to examine the record of the Fed and propose how to move to a metallic standard — the one time-tested safeguard against the runaway spending and inflation that threatens our future today.

Will Senate Republicans Betray the House GOP?

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