GOP-controlled House must curb fed power

The drama is over. With Republicans finally installing Rep. Kevin McCarthy of California as speaker of the House of Representatives, that body can get going on a reform agenda.

Although left-wing pundits decry divided government, one of the best things about the GOP running the House is it can hit the brakes on the Democrats’ excessive spending sprees of recent years that have raised the national debt to a staggering $31 trillion.

The largesse, in turn, pushed up inflation to the highest levels in four decades. As the late, great economist Milton Friedman once said, “Inflation is taxation without legislation.” While all Americans have been impacted by inflation, the burden falls hardest on poor and middle-class families and individuals, who see the value of their wages and savings evaporate rapidly.

High inflation forced the Federal Reserve to raise interest rates nearly 5 percentage points, which brings with it some economic pain. The result for housing, reported Jonathan Lansner in this paper, meant “plunging sales 44% to a record low as house payments jumped 53% or more” in Los Angeles and Orange counties.

Crucially, Republicans will stop any new taxes funding expansive new programs. Even now, minority Democrats in the House are proposing “some of the biggest tax increases in decades,” reported SmartAsset, in particular raising the top tax rate on capital gains from 20% to 25%. That’s the last thing needed as the country descends into a recession. Higher taxes would discourage investing in new companies and jobs creation.

And remember, capital gains taxes, unlike income taxes, are not indexed for inflation. That means 2022’s 7.1% annual inflation rate (as of November) effectively taxes phantom gains.

The halt on the Democrats’ big-spending agenda, however, is likely to be the primary and much-needed benefit of a Republican-controlled House.

The Republican House also is planning to begin long-needed investigations into American intelligence agencies, beginning with the FBI and its interference with Twitter and other social media.

The model should be the 1975 Church Committee, which ferreted out abuses at the Central Intelligence Agency and led to crucial reforms. It was headed by Sen. Frank Church, D-Idaho, and revealed among other things, the MKUltra program in which the CIA illegally drugged and tortured  people as a means of figuring out how to brainwash or extract confessions out of people.  Also revealed were assassination plots against foreign leaders and the FBI’s COINTELPRO project involving the infiltration of civil rights and dissident groups.

The House Freedom Caucus has pushed for investigation into “weaponized government,” with their specific interest being in how conservatives have been targeted. If the House is going to look into such matters, they should look into “weaponized government” more generally. They are sure to be able to find allies on the left by doing so. Failure to do so risks the whole thing devolving into partisan theatrics rather than the bipartisan, important effort the Church Committee was.

Democracy needs an alternation of the parties in power so they can check each other’s excesses. We urge the new Republican majority to live up to its promises to curb government power. The people will be watching.