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DeMint: Banking Reform Is Latest Government Failure

When it comes to solving our nation’s problems, politicians should borrow the doctors’ oath: “First, do no harm.” 

The big-government politicians ruling Washington love finding ways to spend taxpayer money on programs to cure whatever seems to be ailing the country that day. More often than not, they end up doing more harm than good. 

Americans have learned this the hard way.

President Barack Obama’s stimulus bill robbed the wealth-creating private sector to grow government jobs. His health care takeover is killing business. And both massive spending bills are certain to cost families, investors and taxpayers more of their hard-earned tax dollars.

Meanwhile, the economy is frozen in fear of the financial sucker punch that’s coming. To stave that off, voters are demanding that their government stop micromanaging problems and return to its original purpose of maintaining a predictable set of laws that allows freedom to thrive and Americans to prosper.

Otherwise, the uncertainty and apprehension that are ruling our markets now will become the norm. Just as financial instability created a credit freeze, legislative chaos in Washington has put a freeze on jobs, innovation and entrepreneurship. 

Obama’s health care takeover is 2,309 pages full of new rules. The Democratic 1,500-page financial regulation bill is equally, if not more, complex. Hardly anyone who voted for these bills fully understands the requirements or implications of them. But once they are signed into law, it’s left to small-business owners, health care providers, insurance agencies, families and all of those who are forced to abide by the new laws to figure them out. 

While Americans struggle to understand what these new laws will mean, the unemployment rate remains stubbornly high, and investors are understandably reluctant to take risks on new ventures. 

The U.S. economy needs certainty, and Republicans and Democrats should work together to stabilize the dollar by reducing spending and debt. The national debt will soon surpass $13 trillion, and the unfunded liability to pay for future entitlements in the future exceeds $100 trillion. 

To stop our nation from driving off a fiscal cliff, we must force lawmakers to give up their pet projects and rein in reckless spending. An earmark ban would force politicians to cast votes based on the merits of legislation, not how much pork has been stuffed into it to fund pet projects and reward special interests and donors to their campaigns. Because the more earmarks are put into a bill, the more votes it gets. The 2008 bank bailout failed on its first vote in Congress but passed easily after a hefty dose of earmarks was added. The stimulus was chock-full of parochial projects that helped its passage. Obamacare was doomed in the Senate until the “Cornhusker Kickback” was added. 

Adding a balanced-budget amendment to the Constitution would jump-start the process toward much-needed budget reform. Washington politicians will never get serious about cutting debt and spending unless law forces them to balance the budget. Forty-nine states have balanced budget amendments on their books, and the federal government should, too. This would protect taxpayers and provide confidence to the market by sending a signal that the U.S. government is taking action to avert the fiscal disaster ahead. 

To abide by the balanced-budget amendment, deep cuts will need to be made to the budget and entitlement spending. That process can start by undoing some of the damage that’s been inflicted by the Obama administration. Obamacare, which the Congressional Budget Office says will cost $2.5 trillion, should be repealed. So should unspent stimulus and Troubled Asset Relief Program funds. The endless bailouts being fed to government-owned mortgage giants Fannie Mae and Freddie Mac should be shut down. Freddie and Fannie have consumed more than $145 billion in bailout money since the government took them over. It’s time to shut down the bailouts and start winding Freddie and Fannie down.

Congress should also examine the tax code. The explosion of taxes anticipated to pay for all the spending that’s occurred is paralyzing the economy as well. Rather than making the tax cuts that were enacted in 2001 and 2003 permanent, Congress has been trying to supplement them with a shoddy patchwork of temporary tax credits and breaks. The 2001 and 2003 tax cuts, scheduled to expire this year, should be made permanent. Other measures should be made to simplify the tax code and make it easier for Americans to navigate as well. 

A stable government, predictable laws and fair rules make a nation and its democracy strong. Obama isn’t providing this, and Americans are sick to their stomachs over his bailouts, pork-stuffed spending bills and takeovers.

Americans are morally opposed to a government that abuses its power to pick winners and losers and inflict unfair, unforeseen rules. Obamacare and the new financial regulation package are certain to do more harm than good. 

Voters are craving a smaller, smarter government this election cycle. And they have been quick to support candidates who recognize the government must do less, not more. The next step is sending those candidates to Washington to replace those who don’t. 

Sen. Jim DeMint (R-S.C.) is ranking member of the Banking Subcommittee on Economic Policy.

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