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Wall Street Journal - Mr. Johnson Goes to Washington

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By Allysia Finley

'I try to forget I had a good life," Wisconsin Sen. Ron Johnson wistfully quips about his career before being elected in 2010--or as good a life as could be had running a business in the midst of an unrelenting regulatory and rhetorical assault from Washington.

Mr. Johnson jumped into the fire two years ago when he toppled progressive Democrat Russ Feingold in one of the year's marquee Senate races. He met with Journal editors this week to discuss what he has learned during his first two years in office and what he hopes to accomplish in the next four. Here's a hint: A lot will depend on this presidential election.

The plain-spoken Oshkosh businessman stands out in the Senate, and not merely because he's unaffected. As Mr. Johnson pointed out in one campaign ad, the Senate in 2010 included 57 lawyers (Mr. Feingold was one) but zero manufacturers and just one accountant. With Mr. Johnson, the Senate gained a manufacturer and an accountant.

The Republican helped start a plastics-manufacturing business with his brother-in-law in 1979, when he was 24 years old. Over the course of three decades, the company grew into one of the world's largest producers of medical-device packaging. It was easier, he says, to build a business when there weren't "30 years of additional rules and regulations that have been piled upon our economy."

Two years ago, the father of three decided to run for the Senate because he was "panicked about the country" and terrified by what ObamaCare would do to small businesses, medical innovation and the next generation. On the campaign trail, he hammered the point that "you've got two paths: growing government and debt or growing the private sector and creating long-term self-sustaining jobs."

Upon arriving in Washington in November 2010 for Senate orientation--the first time he had ever visited the nation's capital--the political neophyte expected to be enormously frustrated, he says, "but it's that and then some." Mr. Johnson may be an outsider, but he wants to work within the system to get things done. That is proving harder than he imagined.

For starters, he says, Congress doesn't operate with anything close to the efficiency of a business: "If you're going to compete against an organization, Congress would be the perfect one to compete against."

He pulls out a pen and draws a diagram of Congress--a big rectangle containing a bunch of incongruent circles. "You've got all of these cookie-cutter offices. They're all stove-piped. They're all siloed. A bunch of cats that don't play well in the same box. It's competitive. You see the exact same piece of legislation with somebody else's name on it. What's that about?"

A business with the same budget "would do a far better job marketing its products. The product here is ideas," he says, "and at selling them--we're not doing a very good job."

There's the rub.

The senator believes the 2012 election is seminal not only because he thinks it's our last chance to make a U-turn on the road to serfdom--"this election is literally about saving America"--but also because it offers Republicans a singular opportunity to educate the public about the country's problems, and in doing so, earn a mandate for fixing them.

"People understand that we're really at this fork in the road. We've actually already forked. We'd better hop on over here while this path is still in sight, while we can still hop back on this path, and people get that," he says. But "far too many Americans have either forgotten--or I'd argue were never taught--the foundational premise of this nation, what our founders did."

Sounding like he's channeling the spirit of Thomas Paine and Benjamin Franklin, he adds: "The government isn't here to solve our problems. We need government. It's necessary. But by and large, it's something to fear because as it grows, our freedoms recede. And as a result, way too many are trading their freedoms . . . for a false sense of economic security."

At this the senator whips out a batch of PowerPoint slides that he has been presenting to audiences in Wisconsin. He refers to these visits, especially his stops at businesses, as "force multipliers" since they can help inform workers, which "our education system isn't going to do."

First up is a line graph that illustrates how federal spending has exploded to 24% of GDP from 2% a century ago. Next, a chart that plots spending and revenue over the past 50 years. Spending has averaged about 20.2% while revenue has trended around 18.1%--regardless of whether the top marginal tax rate was 90% or 28%. "The variation around that mean is tight. We've only gone above 20% four times," he notes.

Then come slides dispelling Democratic myths such as the ones about how Bush tax cuts and the wars in Iraq and Afghanistan blew up the deficit. The tax cuts and war budgets account for just $1.2 trillion of the $5.3 trillion in deficits the Obama administration has run in four years. Republicans during the Bush administration might have been "spending like banshees," he says, but "they did get the deficit down to $162 billion. Far too high for me, but quaint in comparison to Obama's record."

As for the "draconian cuts" that Republicans now supposedly want to inflict, spending even under Rep. Paul Ryan's budget would be $1 trillion higher in 2022 than it is today.

And the idea that asking the wealthy to "pay their fair share," whatever that is, can solve the deficit? The president's so-called Buffett Rule to establish a minimum tax rate of 30% for millionaires would raise about $5 billion a year, while allowing the Bush rates to expire for the wealthy might bring in an additional $67 billion. ("I would like to do a Buffett Rule," Mr. Johnson deadpans. "Just for Buffett.")

The tax revenue would be a pittance, given that the deficit this year is $1.1 trillion and the national debt is $16 trillion--which, Mr. Johnson notes, will explode under ObamaCare. The Congressional Budget Office projects that the health law will cost $1.7 trillion over the next 10 years. The senator says that's a lowball estimate and that the gnomes at the CBO are underestimating the incentive for employers to drop their workers onto government-subsidized exchanges.

"Do I pay $15,000 and try to comply with 15,000 pages of law and regulations? Or do I pay the two- or three-thousand-dollar penalty" and make workers eligible for a generous subsidy?

He recalls asking if there was "anybody there in CBO land that has actually worked in the private sector, that has actually bought health care, somebody who might actually put some input into what the real decision might be? Nah. All you've got is a bunch of Keynesian economists."

The senator flips to another couple of slides that show how wildly successful the Obama administration's economic policies have been. Since the president took office, middle-class incomes have dropped by an average of $4,520 while health-care premiums have risen by about $3,000.

"I just lay out the case," he says of his PowerPoint presentations back in Wisconsin. "After that 45 minutes, people come up to me. 'God bless you, senator, thank you. Boy, I so enjoyed that.' " He shakes his head, he says, and wonders: "What kind of masochist are you?"

Although everything he says sounds very depressing, Mr. Johnson delivers this cross-of-debt speech with a disarmingly sunny demeanor, not unlike Mr. Ryan. "As pointless as it has been and pointless as it may be," the senator says, "I'm not willing to give up hope on this country."

The November election offers a clear choice, he says, between "Mitt Romney, who is committed to fixing the problems and willing to take the risk of picking Paul Ryan--who's willing to take risks," and Mr. Obama, who "either doesn't understand" the problems, "which is possible, or he just thinks he can continue to sell the snake oil and hoodwink the American public."

Mr. Johnson notes that the number of times Mr. Obama has met with Senate Minority Leader Mitch McConnell "you can count on a couple fingers. I don't think he has much of a working relationship with Democrats." In the two years since Republicans took control of the House, "he hasn't governed at all. I'd argue he hasn't even made an attempt. . . . So just from a standpoint of governing, I don't think anything will get done with another four years of President Obama."

By contrast, a President Romney--with or without Senate control--would immediately stimulate the economy by sending the message that "America is open to business," Mr. Johnson says. Merely celebrating success and talking about making "America an attractive place for global investment, for global expansion--that would take $2.5 trillion off the sidelines."

A Romney presidency would also offer at the very least a hope of tax reform that lowers rates and closes loopholes, which some Senate Democrats like Jon Tester of Montana and Joe Manchin of West Virginia have backed.

Mr. Johnson wouldn't "lay out the exact plan" for tax reform. Instead, he says, "you leave room for negotiation. You say 'here are the principles, and the principle is you've got to address the entitlements,' " which the Simpson-Bowles plan ignores. That's why the senator rejected it. Also, he says, the plan's expectations of three dollars in spending cuts for every dollar in new revenue are "illusory."

Oh and by the way, "if you're gonna get revenue, the revenue you get is the old-fashioned way--by growing the economy."

Mr. Johnson is optimistic that in the election Republicans can take the Senate, and if they do, he sees a real opportunity to pass Medicare reform a la Paul Ryan's premium-support plan, as well as move Medicaid to block grants and undertake a Social Security overhaul that includes some means-testing.

Does he really hope to do all three entitlement reforms at once? "As long as you're doing it, rip the Band-Aid off, get it over with," he says.

Such reforms will be a heavy lift even if Republicans pick up in the best-case-scenario seven Senate seats, bringing the GOP total to 54. But what if Republicans stay in the minority and, heaven forbid, Wisconsin's Madison liberal Tammy Baldwin and Massachusetts' warrior princess Elizabeth Warren win their races?

Mr. Johnson can't bear to contemplate the prospect. But Republicans will have to work with the other side and build a political consensus regardless of how many Senate seats they win--much like Ronald Reagan did with his 1986 tax reform.

"It's about making the case in a simple enough fashion for people to understand it and then selling it. It's a political process. You have to inform, persuade, and then actually legislate," he says. "I wouldn't recommend jamming anything through. I believe in the power of leadership and information."

Hence, the senator thinks it's crucial that Republicans use the November election to educate the public about economic growth, which as he says, is "the fun way" to reduce the deficit.

"It's the unpainful way. It's what President Obama doesn't have a clue about. I think Mitt Romney and Paul Ryan know about that. And besides that, I think both men are inherently optimistic, which would be helpful. Don't you think?"


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