The Kemp manifesto - Jack F. Kemp - On the Right - Editorial

National Review, July 15, 1996 by William F. Buckley, Jr.

The movements of Jack Kemp are always worth watching. For many years he was dismissed as a football jock who had stumbled onto Adam Smith and remained starstruck. But after a few terms in the House of Representatives he won grudging admiration, in part because of his comprehensive grasp of the economic scene, in part because of his rhetorical fluency. Ronald Reagan aside, it has been for many years Jack Kemp who has had the ability to ignite enthusiasm in those whom he addresses.

Kemp's political judgment, however, has never been very good. It is generally agreed by specialists that he could have defeated Governor Cuomo the second time around in 1986 and that if he had done so he'd have been perfectly placed to bid for the presidential nomination in 1988. He gave up his congressional seat to contend for the presidential nomination and, for reasons unknown and unknowable, left his legal residence in New York in favor of Maryland, where he lived while serving as Secretary of Housing and Urban Development for President Bush. If he had stayed in New York he'd have been nominated for governor, would have defeated Mr. Cuomo, and would almost certainly be the candidate for President at the moment.

But his political prescriptions have always been sound, and this week he published in the Wall Street Journal a manifesto of sorts. In it he made an unusual proposal.

But first, the launch. Mr. Kemp argues that the country is wearing itself out with the partisanship that is built into existing economic policies. This is likely to go on with the rough division we have got used to. The Democrats are associated with welfare, the Republicans with tax reform. They argue but without a common vocabulary, says Mr. Kemp. If what is desired is to provide for the underclass, the most painless way to do this is to encourage growth in the economy. That growth can't happen under our suffocating tax structure.

Mr. Kemp asks for a truce on the welfare front. Leave it alone. In return he asks for a solid, architectural reform in our tax policies.

What is especially original in his concrete proposals is his assumption that the President of the United States is empowered himself to take two drastic courses of action.

The first is to instruct the Secretary of the Treasury to index capital gains. The assumption is that indexation is a matter of purely clerical concern, that you should not need a congressional Act to instruct the Secretary of the Treasury to do something as obvious as not to charge for spurious increases in the value of land or stock or other property.

But Mr. Kemp goes further. He would have the new President instruct the Treasury Secretary to "stabilize the dollar value of the nation's gold reserves, say within a $30 band." Such action would "reinstate the dollar/gold link" that was broken in 1971 and that led to the worst inflation in the century.

If we reason backwards, we have a right to assume that if what Nixon did he had the authority to do, then to undo what Nixon did another President would have the authority to do.

Mr. Kemp then says: Look now at what would happen. For every 1 per cent decrease in the interest rate, $50 billion is lopped off the annual burden of the national debt. With capital gains indexed, a flood of realism pours into the marketplace, affecting farms and apartments and portfolios. It is another question how high genuine capital gains should be taxed -- that would be a congressional decision.

And as for the tax code, the new President having used his own authority to take the two measures here outlined, let Congress proceed to work out a new system inspired by the flat-tax principle recommended by the Commission on Economic Growth and Tax Reform that Jack Kemp headed up last year.

Here is a fresh view, filling the lungs with hope and excitement. Mr. Dole is uniquely in a position to act on the Kemp manifesto. He could, just to begin with, endorse the two major proposals for executive action. And, in a spirit of bipartisanship, he could say that he would suspend any call for reducing existing welfare measures, testing whether the fiscal reforms had the effect of diminishing the heavy weight of welfare on the budget. And Mr. Dole could make a second, equally exciting move by announcing that he intended to name Jack Kemp as vice-presidential candidate.