4 ways House Republicans want to reshape the US economy in 2023

The rollout this week of the House Republicans’ “Commitment to America” intentionally echoed its famous predecessor, 1994’s "Contract with America."

Back then, Newt Gingrich, who would go on to become Speaker of the House, stood alongside fellow Republicans and outlined his promises on Sept. 27, 1994. While Gingrich’s proposal included a 196-page book outlining 10 specific bills, this week’s effort offered vaguer fare, fitting on a single page.

Nonetheless, it's a glimpse into Republican plans if they retake at least one chamber of Congress, as some experts predict they will do. Up until now, Republicans have heavily focused on potent political issues such as immigration, crime, and education, but this week’s rollout includes hints of economic plans, too.

"What the commitment is is a plan, a plan for a new direction," House Minority Leader Kevin McCarthy said during a Republican rally Friday alongside his colleagues in Monongahela, Pennsylvania. "It's about you, it's not about us."

Here are four key economic takeaways from this week's unveiling, which touch on blaming Democrats for high inflation; increasing fossil fuel production; China; and the question of whether Republicans will alter the "third rail" of Medicare and Social Security.

Inflation, Inflation, Inflation

Inflation remains the top GOP message.

At the event in Pennsylvania on Friday, McCarthy focused on the American Rescue Plan passed last year as a key driver of inflation. "These Democrat policies have already taken one month of your wages," he said before vowing to repeal the newly passed Inflation Reduction Act as soon as Republicans take control.

Republicans have long blamed Washington spending for inflation, while most economists point to a broader array of factors behind stubbornly high prices. Still, many experts view last year's American Rescue Plan — which provided direct relief to Americans — as a key driver of skyrocketing prices. Meanwhile, the Inflation Reduction Act won't likely affect prices either way despite its name, according to a widely cited study by the University of Pennsylvania's business school.

In reality, Republicans would have a tough time repealing the Inflation Reduction Act, largely because Biden would be sure to veto any bill to undo his signature accomplishment that aims to fight against climate change, reform health care, and shore up the Internal Revenue Service.

Republicans also promise new “pro-growth tax and deregulatory policies” to fight inflation, with Rep. Patrick McHenry, who would lead the House Financial Services Committee, saying "the No. 1 thing is to stop digging the ditch" when it comes to fighting inflation. The second priority? Keeping an eye on the Biden administration.

A coming election debate on Medicare and Social Security

Entitlements merited only a single line in this week's plan and it didn’t come up at all during Friday’s event, but they're likely to take center stage as a key talking point this fall.

House Republicans promised this week to “save and strengthen Social Security and Medicare.” They didn't offer further details but the mere mention of the two programs sets up a fight with eager Democrats.

Biden's party has focused on these entitlements since Senate Republican campaign chair Rick Scott released a plan in February requiring Congress to review “all federal legislation” — including Social Security and Medicare — every five years. GOP candidates around the US have also suggested privatizing Medicare.

“The difference with older voters could not be more stark,” Democratic Congressional Campaign Committee chair Rep. Sean Patrick Maloney (D-N.Y.) said Thursday. “Your choice is between one party that says we may take away your Social Security and Medicare every five years.”

Biden is also set to highlight the issue again next Tuesday with a trip to Florida — a key swing state that's home to many older voters — on the books to deliver a speech on lowering health care costs and strengthening Medicare and Social Security.

A focus on fossil-fuel production

The GOP also signaled a focus on increasing fossil fuel production in 2023 with the promise to “maximize production of reliable, American-made energy” and “cut the permitting process time in half to reduce reliance on foreign countries, prevent rolling blackouts, and lower the cost of gas and utilities.”

On Friday, House Republican Whip Steve Scalise said he was committed to sending a bill to lower energy prices to Biden’s desk. "We are going to give him that dilemma; we are going to give him that opportunity to wake up," he promised.

Still, Sen. Joe Manchin (D-WV), a close ally of the energy industry, is pushing his own effort to reform the energy permitting process. While Republicans are usually inclined to support energy reform efforts, many have lined up against Manchin's proposal alongside liberal Democrats ahead of a likely vote next week.

Supply chains and China

Republicans also plan to home in on China next year.

"China has too much control of our supply chain; we are going to bring that back to America," McCarthy said. In an op-ed this week, he added that the GOP plan "modernizes outdated regulations to expand American manufacturing, strengthen our supply chain and end our dependence on China for critical goods."

Republican leaders reportedly have conducted polling shows 23% of independents called China their “top issue.” Still, details on a possible bill are scant. Lawmakers have recently launched bipartisan efforts around supply chains — mostly tied to medical supplies — without agreement yet on a large-scale bill.

Also Friday, House GOP leaders promised to hold hearings on the origin of COVID and China's role in the pandemic if they take control next year and are able to set the agenda.

Ben Werschkul is a Washington correspondent for Yahoo Finance.

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