Bill Roth, a Natural Supply-Sider Jude Wanniski December 21, 2003

Memo To: Website Fans, Browsers, Clients
From: Jude Wanniski
Re: A Memorial

When former U.S. Senator Bill Roth of Delaware died last week, I was so preoccupied with the capture of Saddam Hussein that I completely missed the news of his passing. How completely consistent this would be with his political career, as he always seemed to be upstaged at a critical moment, no matter how much he deserved to make the evening news. When we think of the Reagan Revolution in economic policy, a revolution that is still unfolding, a piece of our thinking goes back to the “Kemp-Roth” bill of 1978, which preceded the Gipper’s election as President, and I believe made his election possible. In the tributes I’ve seen to Roth, whom I always called “Senator,” no matter how many times we spoke, there is never a mention that legislation co-sponsored by a Senator and a Congressman always lists the Senator first. And when I spoke to Senator Roth, I always referred to the legislation as the “Roth-Kemp bill.” He’d smile at the gesture, but he really did not mind. It was Jack Kemp’s team that initiated the legislation, but to get any kind of steam behind it, Kemp needed a heavyweight Senator to get behind it, and Bill Roth was right there, first in line, needing no persuasion. He was as natural a supply-sider as Ronald Reagan, so much so that he came up with dazzling ideas without any prompting from Kemp or the rest of the gang. The ingenious “Roth-IRA,” as one example, came out of his shop, without any help from other supply-siders.

Early last week, a friend who knew Roth and attended his funeral in Delaware e-mailed me with a suggestion that I write about Roth at this site. Here is how he summarized the Senator and his achievements:

Although a quiet member of an always loquacious Senate (and for a few years in the 60's a member of the House, I believe entering in the same class as GHW Bush), his bona fide legislative accomplishments are each more than most Members of Congress achieved in their careers. Many of them have and continue to have a lasting, important, and direct positive impact on our Nation's welfare.

1) Kemp-Roth tax cuts - obviously I don't need to say much. Although more associated with Kemp, the fact is he took the risk (Senator on the margin?), signed on and pushed it long before anybody thought it was serious.

2) Roth IRA - he did NOT name these after himself. It was either Rubin or the Republican leadership who pushed that, obviously Roth accepted (it was done at the end of the conference committee on the tax bill - it had been named something else going into the conference committee). The impact has been huge, obviously. Importantly, it was the camel's nose in the tent for moving our tax system in the right direction in a politically feasible way, namely, showing that ordinary people like and understand the notion of taxing something once - and never taxing it again. The economy obviously liked it also. If the Health Savings Accounts are even close to being as popular, the Medicare prescription drug bill will be the best thing to happen to our health care system in a long time - and a conservative reform at that. The implications for social security are obvious.

3) The Thrift Savings Plan for Federal Employees. It's not well known, but as Chairman of the Senate Government Affairs Committee in the early 80's, he marshaled through a dramatic change in the federal employees retirement system - essentially allowing employees (of which there are obviously millions) to have something similar to a 401K plan. Money is not taxed on the way in, the Govt. matches up to 5% of salary, it can be invested in Government bonds, corporate bonds, or a fund that tracks the S&P 500 – with full property rights for employees. It's been a boon, and could pave the way for social security reform also. Ironically, these are the funds that Bob Rubin used to pay the bills when the Congress tried to force a default on the national debt in the mid 90's (we're doing the same thing these days when we get close to the debt limit). I don't know how much the total asset stock is in the funds, but it's got to be enormous, and has been a win for employees and the economy as a whole.

There's more (like IRS reform), but those are the highlights. In the book “Master of the Senate,” Robert Caro goes into great detail about what he identifies as "legislative genius." He contrasted it with executive genius, which he described as making difficult but correct decisions under tense and short time periods with not enough information. Legislative genius, embodied in Lyndon Johnson as Senate Majority Leader in the 50's, was more about overcoming the multiple obstacles put up by our Founders to enacting any law - seeing the legislative process as a chess game, slowly moving through one hurdle after the next, hitting multiple targets with one arrow - and separating the bad marginal ideas from the good ones.

Roth was not a great speaker, not a great backslapper, and he didn't lie. But he had some ideas and beliefs that over a 34-year career in elective politics he enacted into law, overcoming the hurdles in the way. The fact that a small state can produce and put into national power a man who can quietly accomplish that much is a testament to our system of government, with its warts and all. And the fact those same small state voters voted the powerful Chairman of the Senate Finance Committee (with jurisdiction over 100% of the nation's revenue laws and 66% of it's spending laws) out of office when it was time is just as much of a testament.

Here is a remembrance of Bill Roth and his "pure heart" that appeared in the Delaware News Journal
http://www.delawareonline.com/newsjournal/local/2003/12/15rothrememberedf.html