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Zeal for Reform Was Bound to Produce Collisions

When Barack Obama talked about dramatic changes in the way Washington, D.C., does business, and then proposed sweeping changes in ethics and lobbying restrictions for his appointees, it was clear that he would end up taking some serious flak.

[IMGCAP(1)]First, his goal of changing the culture would inevitably conflict at times with his goal of creating the best team of people, mixing new blood and experience, to implement his policies and run his administration. There would be top-flight people who shared his policy goals and vision and who knew how to make government. But many of them had served as lobbyists or at least had worked to influence government on behalf of major interests, or had worked intimately with interests that would be affected or harmed by the Obama policies; to exclude them all from key positions would be at best counterproductive.

That is why I encouraged and then applauded a waiver provision in special cases, even though I knew it would itself be a target for journalists, some reformers and Obama’s political adversaries. And it is why I focused far more on the tough exit provisions limiting post-employment lobbying as the best way to change a culture where too many people come into government seeing it as a springboard to future riches.

Second, Obama’s pledge to transcend the culture of corruption that had plagued Washington for a long time (not to mention Springfield, Ill.) would have its own glitches, as inevitably nominees going through the ultra-strenuous and thorough vetting process would uncover problems — tax issues, nanny issues, personal issues — that would conflict with the high standards set by the president. In most cases, given the quality of people chosen by Obama from a huge pool of high-quality people willing to serve, those problems would be minor in the larger context — careless preparation of tax returns, ignorance about tax liabilities, which only show up with a full scrubbing.

But these would be bigger in the context of confirmation hearings in a highly charged political environment and with reporters eager to jump at any hint of hypocrisy. And bigger still at a time of economic turmoil when most Americans are hurting, when tales of people making millions but having to explain “mistakes” in taxes that amount to more than most families earn when they are working raise populist ire.

So perhaps it is inevitable there would be casualties, now including Bill Richardson, Nancy Killefer, nominated to be chief performance officer, and of course Tom Daschle. The first draft of this column, written Monday night, was a vigorous defense of Daschle. I have known Daschle since the 1970s, when he was a staffer for South Dakota Sen. Jim Abourezk (D). He is a truly nice guy, sensitive, honest, with high moral character, self effacement and decency.

I thought none of the tax issues rose to the level of malevolence, or an attempt to evade taxes or avoid the rules. I thought, given that nearly all Senators who have known him agree with my assessment of his character, and that most believe that he has a unique combination of qualities to put together a major reform of our troubled health care system, that he would be confirmed.

I am stunned and saddened at his withdrawal. I hope it does not lead to a feeding frenzy that discourages other good and experienced people from going through the meat grinder to serve. And I hope even more that somehow Obama can find a person half as prepared in knowledge of our political process, understanding of the health care system, relationships with other key figures in the administration and Congress, and with the full confidence of the president, to run the behemoth Department of Health and Human Services and to manage through the necessary reforms.

Now let me write about another Senator who gets and deserves the respect and admiration of his colleagues and others: Dick Lugar (R-Ind.). Last week, Lugar wrote an opinion piece in the Washington Post advocating a serious and meaningful gas tax hike — a position that is viewed by most of his colleagues (and by the White House) as anathema, not because it is wrongheaded but because it is politically unpopular. Bill Clinton and Al Gore got battered when they proposed a significant gas tax hike as part of their economic recovery plan in 1993. It has been off limits ever since.

It is in fact a compelling idea, the best and simplest way by far to reduce the amount of money we send to despots like Hugo Chávez, Vladimir Putin and Mahmoud Ahmadinejad that they recycle to undermine our values and interests, and to reduce our addiction to fossil fuels and encourage even more use of alternatives. We know it works: When prices get higher than $3.75 a gallon, behavior changes significantly in terms of car and truck purchases and driver behavior. When the price comes down, we revert to unfortunate form.

Producing more oil is great, but it is only through changes on the demand side that we achieve the true positive balance of policy objectives. While Lugar’s article made reference to Charles Krauthammer’s support for the idea, it is still relatively rare for a conservative Republican to give vocal backing to the concept — in major part because conservative Republicans hate to use the word “tax” without the modifier “cut.”

To be sure, Lugar does not advocate a stand-alone gas tax hike; he supports the concept of a revenue-neutral gas tax, perhaps using Krauthammer’s formula of a dollar-for-dollar substitute of gas tax hike with payroll tax reduction, or via another compensating tax cut, along with some formula to make the burden of a gas tax fair for those who have to travel great distances by car.

Good for Dick Lugar. Here is a suggestion: Next year, when the Bush tax cuts are set to expire, is the perfect time to consider a truly sweeping review of our tax system. Let’s set a reasonable revenue level, given the commitments we have made as a society through government, to prevent a deficit/debt disaster from engulfing our children and grandchildren, and construct a tax system that provides the most sensible route to get that revenue. Substituting a gas tax for a solid slice of the payroll tax or for a good share of the income tax would be a great place to start.

Norman Ornstein is a resident scholar at the American Enterprise Institute.

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