Feature:Opinion

Boehner’s pro-growth message: is a mighty stock rally next?

Photo of Larry Kudlow
Larry Kudlow
Senior Contributor, CNBC

It’s a bit too early for House Republican leader John Boehner to measure the drapes and pick out new wallpaper. But the Intrade pay-to-play prediction markets are now showing a 76 percent chance of a GOP House takeover in November, along with a 60 percent probability that Republicans will capture at least seven new Senate seats.

So Boehner’s lengthy broadside attack on Obamanomics at the City Club of Cleveland this week takes on special meaning. Headlines following the speech were all about Boehner’s call for the resignation of Obama policy generals Larry Summers and Timothy Geithner. But the more substantive question is this: What might a newly ascendant congressional Republican majority actually stand for?

Republican leaders are expected to publish a governing agenda next month, probably an updated version of the bold and successful Newt Gingrich/Dick Armey “Contract with America” of 1994. John Boehner is a key alumnus of that effort. But folks around the country are waiting to see if congressional Republicans will make a strong and aggressive case for a true economic-growth and jobs agenda now, in 2010.

The stock market, for example, has known for months that the GOP will capture the House. But investors are not yet confident that the GOP will focus on GDP, instead of mere ambiguous generalities, trying to be all things to all people. Indeed, if the Republicans borrow heavily from the tea-party “Contract from America” — and its call for constitutional limits to government, tough spending restraint, free-market reforms, and supply-side tax policies — stocks could mount a mighty rally in the weeks ahead.

Well, Mr. Boehner’s speech was a very promising beginning to all this.

Near the top he said, “Right now, America’s employers are afraid to invest in an economy stalled by ‘stimulus’ spending and hamstrung by uncertainty. The prospect of higher taxes, stricter rules, and more regulations has employers sitting on their hands.”

His first proposal to break that uncertainty? Boehner said, “President Obama should announce he will not carry out his plan to impose job-killing tax hikes on families and small businesses.” In other words, extend all the Bush tax cuts. To this end, Boehner quoted former President John F. Kennedy: “An economy constrained by high tax rates will never produce enough revenue to balance the budget, just as it will never create enough jobs.”

And Boehner was just getting started.

He called for an Obama pledge to veto any lame-duck congressional actions that would damage the economy, including the union card-check bill and a national cap-and-trade energy tax.

He called for the repeal of Obamacare’s job-killing 1099 mandate that would require small-business paperwork to show any purchases of more than $600.

He slammed Obamacare in general, noting the creation of more than 160 boards, bureaucracies, programs, and commissions, and the 3,833 pages of new regulations already in place.

He called for an aggressive spending-reduction package that would rollback non-defense discretionary expenditures to 2008 levels, before the stimulus plan was put in place.

  • brettrow

    Sounds great. I am all for defense spending, but it seems to me we could cut some defense spending somewhere, dont you think?