- The Washington Times - Saturday, August 28, 2004

Sen. Hillary Clinton, New York Democrat, and House Speaker Dennis Hastert, Illinois Republican, sure make strange political bedfellows. A recent New York Post article, bouncing off Mr. Hastert’s new book, “Speaker,” recounted his mini-gripe that Mrs. Clinton and her colleague Sen. Charles Schumer were obsessed with bringing home the bacon for New York right after the September 11, 2001, terrorist attack.

Mr. Hastert, however, never opposed the $20 billion aid package for New York. He reconfirmed for The Post that: “All the tragedy was converted into dollars and cents. People kind of lost the sense of the depth of the tragedy itself.”

He could have added some have lost the true meaning of September 11, which launched the U.S. war against radical Islamists. As Norman Podhoretz recently wrote in Commentary magazine, we are now in World War IV. Do the Kerry Democrats completely grasp this essential point? Vietnam is over.

But there’s a more compelling disagreement between Mr. Hastert and Mrs. Clinton, one included in the back of The Post’s article. It may well set the tone for the political battles ahead.

In 1994, when Mrs. Clinton as first lady pushed her grandiose plan to nationalize health care, Mr. Hastert suggested medical savings accounts were a much better approach to reform. Mrs. Clinton disagreed. She argued people are inherently greedy and couldn’t be trusted to make decisions for themselves. In Mr. Hastert’s words, “She went on to say that she felt if money goes to individuals and they have control over it, then that is money government doesn’t have. People wouldn’t spend their money as wisely as the federal government would.”

Well, now. The difference between liberal and conservative couldn’t be clearer. Liberals believe tax dollars belong to the federal government — and that the nanny state will spend the people’s money more wisely than the people because ordinary folks are too greedy, stupid or irresponsible. Conservatives, on the other hand, believe tax dollars are the people’s money. Government works for them, not the other way around.

What we have here is a wedge issue in domestic policy — one we can hope President Bush will exploit in his Republican Convention speech this week. The president believes people should take personal responsibility in such matters as retirement, health care and education — reinforcing that he believes in individual liberty, free-market competition and economic freedom. The Democrats, however, believe in government planning monopolies — a dependency society that celebrates economic “equality” rather than economic growth, to paraphrase former House Majority Leader Dick Armey.

Like Hillary Clinton, John Kerry opposes health savings accounts that would give consumers their own pre-tax cash to buy health care. These HSAs would create an incentive for Americans to be good health-care shoppers and would transfer power from the federal government to individuals.

Money in an HSA not used in a given year could be channeled into a market-investment nest egg to create wealth over time. Mr. Kerry and Mrs. Clinton call this elitist, thinking only rich people invest in the market. Of course, the 95 million strong investor class, where the majority of shareholders make less than $75,000 a year, would strongly disagree.

Mr. Kerry also opposes personal savings accounts as an alternative to the moribund Social Security system. He prefers Social Security tax dollars still be used to finance federal spending, while beneficiaries make do with a submarket investment return below 1 percent yearly. He is saying, Let them eat cake, while we smart Ivy Leaguers run the country.

The Democratic vision of Mr. Kerry and Mrs. Clinton is one of state-coerced equal results, a short stone’s throw from Karl Marx’s original vision of 150 years ago. The Republican vision of Mr. Bush and Mr. Hastert is that equal opportunity allows free people to make their own decisions and exercise their God-given talents in a competitive free-market economy. History suggests this is the best way to grow a larger economic pie. Some will always do better than others, but prosperity and wealth will steadily rise for everyone.

Mr. Bush and Mr. Hastert see an ownership society, including personal savings accounts to reform Social Security, health savings accounts to reform our medical system, new savings opportunities through retirement savings accounts (RSAs) and lifetime savings accounts (LSAs), and education savings accounts that propel school choice.

In effect, this approach moves toward a consumed-income-tax reform plan ending the multiple taxation of scarce saving and investment — a capitalist society’s seed corn of economic growth. This is a Republican agenda that speaks of economic liberty and rejects the Democrats’ heavy bootprint of government control. This clash of ideas should be front-and-center in this year’s election debate.

Lawrence Kudlow is a nationally syndicated columnist and is chief executive officer of Kudlow & Co., LLC, and CNBC’s economics commentator.

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