5/6/98

CONTACT: Kathleen O'Toole, News Service (650) 725-1939;
e-mail kathleen.otoole@stanford.edu

Gingrich discusses Social Security, other reform ideas at Hoover

Newt Gingrich attacked the "European statist model" of government and the academics and media elites who support it during a luncheon speech at the Hoover Institution on Friday, May 1.

The speaker of the house also made repeated references to the Internet as a tool for gaining more participatory democracy and said he would like to dissolve the Department of Energy.

The 56-minute speech and question-and-answer session was part of a luncheon series that Hoover hosts for invited guests. The Republican politician from Georgia arrived as dessert and copies of one of his books were being served on red, white and blue tablecloths in Stauffer Auditorium. He began by thanking Hoover scholars for their "working relationship" with him, specifically mentioning George Shultz's criticism of the International Monetary Fund and Michael Boskin's efforts to reform the way the government calculates the consumer price index. Shultz and Boskin are Hoover fellows and Stanford professors.

Gingrich, who holds a doctorate in European history from Tulane University, returned repeatedly to criticism of what he called the outdated "European statist model" of government, which he associated with the Democratic Party in the United States. The model, he said, is based on "obsolete 19th-century German bureaucracy" and a belief that people receive rights from God through a king. "That's why Brussels will be worse than the IRS," he said, referring to the headquarters city of the European Union and the tax collection agency of the United States.

"How come [European countries] have 12 percent unemployment? How come they can't create new jobs? How come a third of their 25-year-olds are out of work?" he asked rhetorically. "Maybe there is a hint here: Big government, big bureaucracy and high taxes is not going to work in the information age with a world market. It is a model of the past."

Many in academia and the media still support the European statist model, he said. "There's no question that a major percentage of tenured faculty don't have a clue as to how the world works . . . and large parts of the news media are like tenured faculty." He referred to them as "this little class of 3 million people who read the New York Times editorials and watch the Sunday talk shows."

Asked about reducing the size of government and federal regulations, Gingrich said he would like to see Republicans focus on eliminating one or two Cabinet positions. "My personal favorite would be the Department of Energy. It was created at a point of panic over a problem that didn't exist and established to oversee solutions which it failed to produce."

The Republican congressional leadership faces a dilemma on reducing federal regulations, he said, because there are so many regulations it would have to create another bureaucracy to review them.

"We need to work out a system where there is a paperless, automatic availability of every proposed regulation on the Internet for every citizen to look at. People can say, 'Well, let me tell you what they haven't thought about in this one.'"

About 200,000 people looked at last year's tax bill on the Internet the same afternoon it was posted, he said. "You had citizens at home calling their lobbyists and asking them, 'What about section 12?' faster than the lobbyists were getting printed copies of the bill to see what they were talking about."

Asked about the looming Social Security funding problem, Gingrich again advocated the creation of an Internet-based retirement commission for a national discussion of the issues. He also proposed returning the federal budget surplus to taxpayers for individual Social Security savings accounts. "The amount they will earn in the free market will reduce the government's unfunded liability much faster," he said. "Also, there is a big side effect: If every single type of taxpayer ends up with a saving and investment fund, we will have ended class warfare by creating one class."

Asked about the proposed government settlement of lawsuits against tobacco companies, Gingrich said he won't vote for a higher cigarette tax unless the money is returned to taxpayers, and he suggested using it to eliminate taxes that some Americans pay on the income they use to buy health insurance. Massachusetts Sen. Ted Kennedy and other Democratic senators, he said, are "using the smokescreen of anti-teen smoking" provisions in the proposed settlement to raise $560 billion more for government spending.

Asked about the possibility of bipartisan support for environmental action, Gingrich insisted any plans must be based on free enterprise rather than government regulation. "The same applies to education. You can design an entrepreneurial free-enterprise, incentive-based model of education."

Gingrich expressed less certainty about the possibility of simplifying tax laws. "In the middle of a campaign, the other side communicates in 30-second spots only the downside" of any tax change proposal, he said. He added that he favored a flat tax or sales tax to replace the income tax but wouldn't risk putting forth such a proposal until a Republican was elected president.

The last speaker of the house to speak on campus was Democrat Thomas "Tip" O'Neill at the 1987 commencement exercises, shortly after his retirement.

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By Kathleen O'Toole