In 1977, Democrats had a 149-seat majority in the House (292-143), 61 votes in the Senate, and Jimmy Carter as president. The country was in decline. It was the worst economy since the Depression, far worse than it is today. The mainstream economists and the DC establishment were woefully unable to deal with the defining issue of that era: inflation. If there was ever a time to despair, it was then.
Jack Kemp, serving just his 4th term, didn’t sit on a committee relevant to economic policy, yet is the namesake of the most consequential (in a positive way) legislation in perhaps 50 years. Kemp proposed across the board tax cuts, knowing a surging economy would help tame inflation. Kemp was not deterred by the Democrat’s stronghold, nor fazed by the establishment saying his views were outside the mainstream. What did he do? How did he do it? And, importantly, what can we learn that is relevant to the selection of the next Speaker of the House?
- Attempt #1: February 23, 1977
Kemp offered his “across-the-board tax reduction for every American” as a substitute to the first budget resolution for FY 1978 (Jimmy Carter’s $50 rebate). His effort went down 148-258. But, it was a new beginning. It stopped the pendulum’s swing.
By using the official forum of the House Floor to sell the benefits of economic growth, Kemp established that tax cuts and growth should be part of the national narrative. Media coverage and public engagement followed. Strategically, he walked out with a scorecard and 148 more votes than he had the previous day.
Will our next Speaker allow a vote on something leadership deems to have no chance to pass? Under Speaker Boehner, it’s doubtful a Kemp-Roth type bill would have seen the light of day. Will the next Speaker welcome such “new beginnings”?
- Attempt #2: March 15, 1978
Kemp offered Kemp-Roth as an amendment to the Humphrey-Hawkins full employment bill (which gave the Fed its dual mandate). Depending on one’s perspective, he lost again 194-216, or he won 46 more votes.
- Attempt #3: May 3, 1978
Kemp-Roth, combined with limits on the growth of spending, passed the House of Representatives as the Holt amendment to the first budget resolution for FY 1979. Leadership was furious and forced eight members to change their votes. On the recount Kemp-Roth went down 197-203. The following month, Proposition 13 in California, a property tax cut that the establishment opposed, but Reagan supported, passed. In addition, the Steiger-Hansen bill, which cut the capital gains tax from 49% to 28%, also passed in June, despite being deemed as having no chance just months earlier. The pendulum was in full counter-swing.
- Attempt #4: Early August 1978
A Kemp-Roth amendment to a Ways and Means tax bill went down 177-240.
- Attempt #5: August 16, 1978:
The Holt amendment to the second budget resolution lost 201- 206.
- Attempt #6: Early October 1978:
A Kemp-Roth amendment to a Senate Finance Committee tax bill lost 36-60.
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Photo Credit: Martin Falbisoner