In one fell swoop, the outcomes of Georgia’s U.S. Senate runoffs on January 5 changed the landscape for the entire nation, at least for the next two years.
Two Republican incumbents – neither of whom had held political office until the U.S. Senate – were unseated by two Democratic candidates, neither of whom have held political office. Thirty-three-year-old Jon Ossoff replaces Sen. David Perdue. Raphael Warnock, a Baptist pastor, won the two years remaining in the six-year term of retired Sen. Johnny Isakson after ousting Kelly Loeffler, appointed to the vacated seat in December 2019 by Gov. Brian Kemp.
Democrats already were the majority in the U.S. House of Representatives; the Georgia wins give Democratic President-elect Joe Biden a Senate majority, too, for the ambitious, costly national agenda he announced on the campaign trail. According to the Tax Foundation, Biden’s tax plan would reduce the economy’s size by 1.62% in the long run, reduce the overall wage rate by a little over 1%, and lead to about 542,000 fewer full-time equivalent jobs.
Additionally, Biden has announced plans to undo much of the Trump administration’s deregulatory agenda, a move that will be facilitated with compliant majorities in both chambers. President Trump’s executive order required two regulations be removed for every regulation added; Biden will possibly revoke the “two for one” order immediately, Susan Dudley, director of the Regulatory Studies Center at The George Washington University, told Government Executive.
“Biden’s campaign website promised to institute regulations for ‘climate-friendly farming’ and lobbyists’ disclosures,” Government Executive noted, adding that he also promised to reverse 100 of the Trump administration’s environmental and public health regulation rollbacks. In July 2020, The Washington Post called Biden’s policy agenda “a significant move to the left from where Biden and his party were only recently,” including “building 500 million solar panels, slashing U.S. carbon emissions within 15 years, and rapidly expanding a government-sponsored health care plan. He wants to overhaul the way policing is conducted on American streets and the way success is measured in primary schools.”
Biden’s ambitious agenda is certain to expand further with majorities in both chambers. All is not lost, however, for states who prefer to continue on a fiscal conservative track. Georgia, first to open its economy and to keep it open after COVID-19 struck, is one.
First, the state Legislature has governed mostly like fiscal conservatives. Legislators relinquished their promise of a tax rate cut for Georgians, but their largely commonsense fiscal approach and Gov. Brian Kemp’s prescient tightening of the budgetary belt, despite vocal protests, became Georgia’s saving grace.
The American Legislative Exchange Council ranked Kemp a five-star governor, noting he “has maintained fiscally strong spending, reserves, welfare, union, debt, and education policies. Georgia’s low levels of spending per (gross state product) and robust economy will benefit future budgets.” Today, Georgia’s unemployment rate is 5.7%, lower than the national rate of 6.7%. Unexpectedly high state tax revenues continue despite the pandemic, bearing testament to the state’s sound approach. It’s one that Georgians would like to see continue.
Second is the matter of the Tenth Amendment, which ensures federalism – the right of the state to choose its way on matters not assigned to the federal government: “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.”
The usual way to be encumbered by the federal government and its mandates is via federal purse strings. For education, transportation, energy and environment, housing, healthcare and more, the state can continue to be fiscally responsible and independent by resisting federal funding as much as possible. The feds’ carrot-and-stick approach forces states to adopt federal regulations and the federal agenda to access federal funds, whether the agenda fits or not. Worse, the federal government has no funds but what it takes from the states’ taxpayers (or borrows); it takes from one hand to put it in another.
The next two years could see the political landscape change again. In the meantime, much damage could be handed down by the progressive, tax-and-spend Biden administration. Georgia would do well to steer clear and continue to chart its own path.