“I think these big defined benefit programs from the New Deal, the Great Society are really showing their age. They don’t give you a good deal, they’re poorly designed. Market forces work so much better, and, you know, this America, why shouldn’t people be free?” — Dean Clancy
Today at noon, FreedomWorks will host grassroots activists at the New Fair Deal Action Day in the Upper Senate Park at the United States Capitol. The day is dedicated to the ideals that are being rolled out as part of the “New Fair Deal” plan, which is based on four basic principles — end corporate welfare, tax fairly, stop overspending, and empowering individuals. The New Fair Deal Action Day will include a number of speakers, including Reps. Justin Amash, Mick Mulvaney, Tom Price, Sen. Mike Lee, Rev. C.L. Bryant, and Julie Borowski.
On Friday, I sat down with Dean Clancy, Vice President for Public Policy at FreedomWorks, to discuss the four pillars of the New Fair Deal and the legislation that will be introduced by the team of House members who are working together to try to get the dozen bills that will be introduced to the floor for a vote.
“The New Fair Deal is a suite of legislation to try to reform and improve our country,” Clancy told United Liberty. “This is not just a ‘Tax Day’ protest — this is a positive reform agenda rally. And we do have folks getting on buses from all over the country and coming to it.”
In describing how the New Fair Deal came about, Clancy explained that some members of Congress came together and decided to introduce the “kinds of ideas that we think would get the conservative, libertarian brand back after this sort of placeholder election.” He described it as a way to “get back on offense” in a way that “appeals to the most common principles that everybody shares; things like getting rid of corporate welfare — ending handouts.”
Republicans have been susceptible to being too friendly to “big business,” Clancy noted, and the members who have formulated the New Fair Deal want to end that.
“FreedomWorks has been working with them. We’ve been kind of at the table with them facilitating,” Clancy said. “It’s about a dozen members writing about a dozen bills, and the first two of the bills will be introduced on Monday, at the time of the rally.”
When asked further asked about the perception of the Republican Party being too friendly to corporations, Clancy explained that the New Fair Deal “is about trying to get K Street out of the equation as much as possible.”
“[T]hese members have targeted a whole bunch of well known, or not so well known, hand outs for elimination,” he noted. “For example, the sugar program, which just drives up the price of food for families and businesses and benefits a few families in Florida, essentially, and the tariffs on sugar.”
“Anything that risks taxpayer money in the marketplace by picking winners and losers; they’re going after these things,” he added. “Congressman Justin Amash from Michigan, who is a member of this New Fair Deal working group, is working on a bill to prevent bailouts in the future in the financial sector area and the government-sponsored enterprises because taxpayers took a hit of hundreds of billions of dollars in the last four years because of bad policies that basically subsidized, favored, these banks and financial entities, and that’s precisely what ending corporate handouts is about in this effort.”
Clancy went on to the second pillar, which is making a fairer, less complicated tax code. He explained the goal is to “sweep away” the existing tax code, getting rid of special interest loopholes and tax breaks and credits. The New Fair Deal would bring a two-rate flat tax as a transition to a true flat tax, which Clancy says “improves American competitiveness by lowering the burden on businesses, but in a way that’s fair to all.”
Clancy also noted that there will be a basic 1% tax, dubbed the “skin in the game tax,” that would apply to every taxpayer, which he said is the “first step to a true flat tax in the future.”
“[T]hat deals with the problem that 47% of the population pays no income tax at all or gets money through the tax code, sort of welfare,” Clancy explained. “And that would all be swept away and in addition to the two-rate flat tax, which would have a big deduction, so for a family $30,000 would be exempt from that, but everybody would pay the 1% “skin in the game” tax from the first dollar, even the poorest person all the way up to the billionaire, 1%, and that’s ensure we all have a stake in that.”
Clancy confirmed that oil and gas companies would not be exempt from the legislation, meaning that their tax breaks would be eliminated as well.
On spending, Clancy explained that the New Fair Deal would reduced outlays by 1% per year until the budget is balanced. While this may seem like an hurdle, Clancy said it would only take 10 years to get the budget back under control.
“They way you get there is you have to hold the line on annual appropriated spending, which is about a third of the budget, and that actually is not that hard to do,” he explained. “Even the Democrats right now are willing apparently to do that; keep it under about $1 trillion a year.”
But Clancy pointed out that “autopilot spending” — including entitlements, which he said are “growing like gangbusters” and pointed out that they are the “main drivers of federal deficits and debt” — will eventually have to be reformed.
“You have to reform those programs — Medicare, Social Security, Medicaid, farm programs, student loans, and on and on,” Clancy explained. “So the New Fair Deal says let’s do that, and it has bold reforms in those areas. It also has budget process reforms, by the way, like trying to make sure that a lot of these budget gimmicks are taken out of the process in Congress.”
And that leads into the final part of the New Fair Deal — empowering individuals, which Clancy says is about “help[ing] enable people to pursue their dreams.”
“So, for example, let’s take the entitlements and make them voluntary for individuals,” he said. “Medicare, for example, you should be able to pick a private plan over original Medicare or even drop out of Medicare altogether, just have a private plan.”
“I think these big defined benefit programs from the New Deal, the Great Society are really showing their age,” Clancy surmised. “They don’t give you a good deal, they’re poorly designed. Market forces work so much better, and, you know, this America, why shouldn’t people be free?”
Clancy was careful to note that the members of Congress who are a part of this group do not want to eliminate entitlement programs, but rather give Americans freedom once again to decide what’s best for them by empowering them to purchase their own health insurance coverage, if they so choose.
The New Fair Deal would offer the same kind of freedom for Social Security.
[T]he group is looking at letting younger workers opt-out altogether, an irrevocably opt-out; just basically saying, ‘Thank you, I don’t want Social Security. I’ll save you that money,’” Clancy noted. “But, in exchange for doing that, younger workers would have to take their share of the payroll tax money that they normally pay into the system and put that into a special IRA or 401(k). We call it the ‘Freedom IRA,’ and that would be tax advantaged.”
Clancy explained that the Freedom IRA would be much more beneficial for younger workers than the current system. These workers would truly own the money they put into the program and be able to pass it along to loved ones.
“Today’s Social Security, if you die at the age of 64 and 11 months, you get zip, your loved one — your children — get zip. It’s really a bad deal,” he said. “But with a Freedom IRA, you can pass it on, and it will build up [a] much larger amount of money than traditional Social Security could ever give you.”
Clancy conceded that the plan isn’t as voluntary as we might like, but he called it a “step towards the freedom that we really want for people to have.”
And that’s the key to the New Fair Deal, according to Clancy. He said that the plan is “about moving towards more choice, more freedom for individuals, cutting overspending, and more fairness.” He also expressed his feeling that the Tea Party and Occupy movement “have a similar diagnosis of the problem, which is that the system is broken.”
While the two movements disagree on solutons, they all agree that corporations and lobbyists have too much influence. “Why not reform and try to get rid of that?” Clancy asked.
But there will be hurdles in Congress, a point that Clancy doesn’t hide or downplay.
“[The political atmosphere in Washington] is very tough,” he acknowledged. “But these members want to be on offense and they want to be arguing for this positive vision. Make the other side explain why they are for corporate handouts. Why they’re for taxing unfairly. Why they’re for not empowering individuals.”
Clancy said that FreedomWorks is hunkering down for a long-term push, and added that the New Fair Deal just builds upon previous grassroots.
“You may have to have changes of personnel in future elections, but the goal of the project at this point is to get these bills to a vote in the House,” he said. “This is long-term campaign, and it builds on other grassroots campaigns that FreedomWorks has been involved in, like the Contract from America in 2010, which was a kind of crowd-sourced platform for the Tea Party movement, and the Tea Party Budget in 2011, which kind of lives on today as the Rand Paul budget plan. So all of these ideas, these sort of liberty-minded ideas, are now carrying forward into the New Fair Deal.”
If you’re interested in helping push the New Fair Deal, go to FreedomWorks.org, where you can sign up for regular updates. Clancy said that they will be setting up a page to track legislation pertaining to the plan and view co-sponsors. He also said that they will have page setup that will help activists reach out their representatives. This is an important point because the more co-sponsors the bills have, the better chance the House will voted on them.