Five things Republicans must do now as next budget battle approaches

With a fiscal deal now in place, some might think America’s budget and debt crisis is over:  they would be wrong.

We will back on the precipice again in just 60 days if we don’t get serious about solving our fiscal problems and restoring faith in the American economy.

For Republicans, hindsight has shown that the strategy of shutting down the government and risking default to force defunding of ObamaCare was doomed from the beginning.

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President Obama will never abandon his signature issue, no matter how flawed and unworkable it might be.

The real solution here is not to bring the economy to the brink of default, but to win elections so we can implement the policy changes we all know are needed.

Simply put, no political party can govern from the House of Representatives alone.

House Republicans should have learned last December that only by unity can we achieve our objectives -- and that you don’t achieve party unity by opposing the Speaker and the Leadership.

Last December’s “fiscal cliff” standoff led to a deal between the Obama administration and Senate Republicans that left the House GOP majority sitting splintered on the sidelines. It was a near-perfect roadmap for what has just taken place.

Democrats who believe they’ve achieved a “victory” should think again: nobody wins a standoff like this, as evidenced by polls that show Congressional Democrats’ ratings in the low 30s, while Obama’s  has sunk to 43 percent -- one of the lowest of his presidency.

The whole situation resembles the closing scene in "Rocky II," with Rocky and Apollo Creed both lying on the canvas, each struggling mightily to regain his footing as the count approaches 10.

In the negotiations to come, Republicans can get off the mat by focusing on real, achievable solutions that promise a positive impact.

As Rep. Paul Ryan (R-Wis.) has urged, Republicans must return to primary objectives: growing the economy and bringing our long term spending under control with long-overdue entitlement reforms -- principles that were virtually lost in the dreary debate of the last several months.

Two salient facts should guide Republicans’ thinking right now:  first, 11 million of our fellow citizens are out of work; and second, we are now four years into the slowest economic “recovery” in our history.

The Obama administration has no answers to these problems.

Republicans must use the upcoming negotiations to re-establish a laser focus on job creation and economic growth, just as so many Republican Governors and state legislatures have done around the country.

Republicans need to advance the following five following policies:

1. Tax reform. Everyone agrees that lowering rates and closing unproductive loopholes would result in higher levels of economic growth.   Republicans should push for a long overdue overhaul of the Tax Code.

2. Approve the Keystone Pipeline. The Obama administration has dragged its feet on this vital project to create jobs and enhance American energy independence.  Republicans must use this opportunity to leverage the strong bipartisan support for its approval.

3. Entitlement Reform. While the budget caps implemented as part of sequestration temporarily reduced the deficit relative to the Gross Domestic Product, the red ink will soon resume an upward trajectory because of entitlement costs.

Congress needs to look at modest, sustainable reforms that will guarantee these programs for generations to come.

Since even the Obama administration has endorsed the concept of entitlement reform, Republicans might consider offering Democrats changes in the sequester levels as a tradeoff for structural entitlement improvements that will have a far more profound impact in the years to come.

4. ObamaCare. The shutdown has obscured the dismal failure of the launch of the ObamaCare health exchanges.

It’s not just computer software design flaws that are keeping people from signing up: Americans don’t like this law, and its complexity alone is discouraging people from enrolling.

Meanwhile, costs are exploding, employers are dropping coverage options for workers, and thousands are being reduced to part-time jobs because of it. ObamaCare requires major surgery, as both sides are coming to recognize.

Unfortunately, major changes can only be made when there is a new occupant in the White House.

5. Repeal the Medical Device Tax.  This punitive 2.3% gross receipts tax stifles job creation and hampers American medical innovation -- all to the harm of the patients who need these devices to stay alive.

There is a large bipartisan majority in both Houses to kill this tax, and Republicans need to advance its repeal (full disclosure: my firm represents device companies).

With Obama’s economy badly under-performing, Republicans now have the chance to use this next round of negotiations to offer constructive, achievable policies that will finally put our economic house in order.

We won’t achieve every item on our agenda, but we must nonetheless do everything within our power to lessen the worst impacts of Obama’s economic malaise.