
Kudlow warns the current GOP strategy is defensive. Without tax reform, spending cuts, and inflation-indexed capital gains, he says the party won't energize voters.
Larry Kudlow is questioning whether Republicans have a budget strategy that can energize the party's base. In a new column, the former Trump economic adviser argues the current approach is too defensive.
Avoiding a government shutdown or passing a continuing resolution is not enough, Kudlow said. What is missing, he wrote, is a package that pairs pro-growth tax reform with real spending cuts.
Kudlow pointed to two specific areas. On spending, he noted the work by Medicare chief Mehmet Oz and Vice President Vance on waste and fraud in the healthcare and Medicaid programs has not yet produced concrete results. "Where are the budget cutting results that will show genuine change to drain the swamp at Washington?" he wrote.
On taxes, Kudlow asked why Republicans are not pushing to inflation-index the capital gains exemption, at least on home sales. Inflation has risen 108% over the last 30 years, he noted. "Why should middle-class home owners have to be taxed on President Biden's inflation?" he wrote.
Kudlow acknowledged the political reality. Democrats led by Chuck Schumer and Hakeem Jeffries are working to block every item on the GOP list, he said. A government shutdown at the end of September is a real possibility, and Democrats believe it will damage the economy and help them keep majorities in the midterms. Kudlow predicted they would be wrong on that.
The core of his critique is that even well-intentioned Republicans are not offering a transformative budget. "Without budget reforms and tax reforms and a growthier approach to fiscal policy," he wrote, "the best-intentioned Republicans are not going to have a Big Bang budget package that would generate serious interest from the grass roots come November."
Kudlow's question hangs over the debate: where is the big bang?
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