Peter Morici: Republicans must move to the middle to win in 2022

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In the recent elections, Democrats ran on a platform to make our government more representative—more women and people of color with their fingers on the buttons of power—and programs to lessen economic inequality.

Voters dumped President Donald Trump because he bungled the pandemic and voters can only handle so much of his narcissism. The electorate is more moderate and aren’t nearly as inclined to radical solutions as progressives presume—defunding the police proved an albatross for Democrats in Minnesota and restoring affirmative action flopped in California.

In the CNN exit poll, 38% of voters identified as conservative and only 24% as liberal. Republicans won in Texas and Florida by attracting Latino votersgained about 10 House seats and held state legislatures critical for redistricting

When markets don’t deliver

Yet, Democrats flipped House seats in North Carolina and Georgia, and the $15 per hour minimum wage passed in decidedly anti-socialist Florida.

Even with Republicans controlling more statehouses, 30 states have enacted higher minimum wages than the federal standard, and many are moving to protect Americans with pre-existing conditions should the Supreme Court strike down the Affordable Care Act.

Voters may reflex from politicians labeled by opponents as socialists but are willing to sacrifice free-market principles when the facts on the ground convince them markets don’t work well enough.

President-elect Joe Biden is more in the position of George W. Bush—who faced tough opposition in Congress but made big gains in his first congressional midterms—than Presidents Bill Clinton and Barack Obama—who hoisted ideas then considered too radical and got trounced in their midterms.

Cooperate with Biden

To prevail in the midterms, Republicans would be better off moving to the center on several of the above-mentioned issues and offering to cooperate with Biden.

When the federal minimum wage was set at $7.25 per hour in 2009, it stood at 33% of the average for all hourly workers. Updating that to 40% would take the federal minimum to $12 and help Republicans appeal to most Americans’ sense of fairness and to Black and Latino voters in particular.

House Democrats have a bill to link U.S. drug prices to those charged in other high-income countries. Trump recently issued an executive order that would move Medicare outpatient drug purchases (Part B prescription medications) in this direction.

Americans pay 50% more for health care than the Germans and Dutch, who have similar insurance systems but drug prices are just part of the health-care-cost problem. When Biden proposes increasing the number of Americans with health insurance by boosting subsidies, Republicans should insist on benchmarking drug prices, medical services and hospital fees to German and Dutch norms. Their governments regulate prices but are hardly considered socialist.

The gas tax was last raised in 1993. Adjusting it for inflation and imposing a mileage fee on electric vehicles could raise about $50 billion annually—only a down payment on a decent infrastructure program. But bottlenecks and congestion are costing more than $400 billion in lost output, and the taxes gained from fixing that could help retire the necessary additional debt.

Investments that pay

That requires bigger deficits—an anathema to many Republican senators. But if borrowing to help private firms modernize and boost sales is good business, then the same goes for improving roads, rails and wires businesses would use to move goods and boost incomes.

The federal government guarantees 90% of student debt but the most fundamental problems are too many young people going to college and runaway tuition.

About half of new college students never complete a four-year degree or pursue a major that does not lead to a decent paying career. They earn no more than the average high school graduate but end up saddled with a lot of debt. And easy student loans have permitted universities to jack up tuition.

Forgiving student debt should be contingent on linking universities’ access to student loans to lowering tuition and their students’ record of debt repayment, and broad expansion of the Labor Department’s successful apprenticeship programs. Those cover a wide range of occupations, and graduates earn more than the average new college graduates.

Republicans must deal with the economy and voters as they find them, not as conservative ideologies hypothesize. Professors’ models of perfect competition are fine for Econ 101 but the real world is a much messier place.  

Peter Morici is an economist and emeritus business professor at the University of Maryland, and a national columnist.

More from Peter Morici:

Here’s exactly where Biden will find common ground with moderate Republicans

Trade will be the toughest test for Biden’s foreign policy

Biden’s next task will be to get millions of people back to work

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