Nearly everyone expects that Republicans will, if they win November’s midterm elections, use newfound majorities in the House and possibly the Senate for intense oversight of the Biden administration and to press Democrats on hot-button issues like critical race theory, gender identity and the Covid-19 response. But what else could they do?
While periods of divided government can yield gridlock, they also offer opportunities for progress. A party in control of the White House and Congress often finds itself at war with its own most uncompromising elements. By contrast, a party limited to power in one or both legislative chambers has an incentive to advance moderate ideas that force difficult choices on the other side of the aisle, and one holding only the presidency knows that compromise is its only path to governing.
In 1986, a 72-seat Democratic majority in the House of Representatives approved President Ronald Reagan’s tax reform, with 176 Democrats and 116 Republicans voting in favor. A decade later, half of House Democrats joined their colleagues in the Republican majority to pass welfare reform, which President Bill Clinton signed into law.
Our organization, American Compass, has been developing a conservative agenda that supplants blind faith in free markets with policies focused on workers and their families. That way of thinking is making inroads in the Republican Party, creating new avenues for legislative progress. Across three categories of policymaking, the party appears poised to make good use of any control it has in the next Congress.
First, genuine bipartisan agreement could emerge where the parties have similar views on an issue to which Republicans will give priority. Industrial policy to compete with China is the most likely candidate. Last month’s bipartisan breakthrough on the CHIPS and Science Act, which directs more than $50 billion to the domestic semiconductor industry, underscored the broad-based appeal of supporting innovation and domestic production in critical technologies. The bill also sparked debate that highlights the work still to be done.
Many on the right, including some congressional Republicans, raised harsh criticism — but not just the typical concerns about “big government” or “picking winners and losers.” Rather, their complaint was that the bill did not interfere with the market enough, and left companies too much latitude to continue investing in China. For instance, the Republican Study Committee (R.S.C.), the largest conservative caucus in the House of Representatives, argued that the bill was too weak because a company receiving CHIPS funds to build an American factory might still be “allowed” to make new Chinese investments as well.
A Republican majority will return to this issue, and groups like the R.S.C. are already formulating tough restrictions on financial flows to and from China. House Democrats have aggressive proposals of their own. And with such provisions in place, other critical industries like electric vehicle batteries and the rare earth minerals they need are ripe for CHIPS-like support. Democratic leadership may not have prioritized investment restriction, but when Republicans do, it will gain momentum quickly on both sides of the aisle.
A second category of action under split control of government will be Republican legislation that has broad popular appeal but threatens a core Democratic principle or constituency. Here, education policy offers an ideal candidate. Parents’ rights and critical race theory in K-12 schools have drawn the most attention, but a broader battle is also brewing over options after high school. Both political parties routinely pay rhetorical homage to apprenticeships and other non-college pathways, but Democrats have spent their political capital on college attendees and aspirants, with proposals for student loan forgiveness and free college that neglect the majority of Americans who do not earn degrees.
Republicans have the opportunity to offer a sharp contrast by excoriating the failures of the nation’s college-or-bust education system and proposing to reallocate federal education funds away from tax breaks and loan subsidies for college students toward alternatives like on-the-job training. This should appeal to the large majority of Americans that, according to a survey led by our organization, prefers options like apprenticeships to free college for themselves and their children, and all who are tired of a culture that confers respect mainly on the college bound.
For many on the right, an added attraction will be reducing funding universities they see as culturally toxic. And conservatives will be willing to consider targeted student debt relief, perhaps through bankruptcy — though they will also want genuine reform that leaves the universities themselves on the financial hook for the success of students. That will not be popular with the higher-education lobby and its allies on the left, but voters may be another matter.
The third place to look for economic policy developments is within the Republican caucus’s internal debates. As Democrats have learned over the past two years, a narrow congressional majority prompts tough intraparty battles that are more easily suppressed when in the opposition. In the wake of the Supreme Court decision that overturned Roe v. Wade, some conservatives are taking up sides on a range of policy proposals to enhance support for expectant and new parents. In a Republican Congress, the family policy debate will be front and center.
The recent Family Security Act 2.0 proposal from Senators Mitt Romney, Richard Burr and Steve Daines would convert the current child tax credit into a significantly more generous cash benefit paid monthly to working families with children. While Republicans have traditionally panned direct cash payments to families as “welfare,” the F.S.A. has garnered a notably broad range of right-of-center support — for instance, from scholars at both the conservative Ethics and Public Policy Center and the business-friendly American Enterprise Institute, as well as from leading anti-abortion groups.
Notwithstanding the anti-tax activist Grover Norquist’s recent remark that such policies reappear from time to time “like herpes or shingles,” the traditional opponents of government spending have mostly held their fire.
If Republicans coalesce around this sort of proposal, it could shoot immediately to the top of the national political agenda, where it would have significant bipartisan potential but also pose a vexing quandary for the Democratic coalition. On one hand, the F.S.A. would be a larger and more widely accessible expansion of family support than anything the Democratic presidential nominees Barack Obama, Hillary Clinton or Joe Biden ran on — it’s tailor-made for support across the political spectrum. On the other hand, its limitation to working families would fall short of the unconditional universal payments that Democrats included for one year in 2021’s American Rescue Plan and fought to make permanent in Build Back Better but have since expired.
A Republican bill along these lines could be generous, popular and anathema to the Democrats’ progressive base. Emergence of a widely backed program for supporting families will depend on how the internal Republican debate resolves and whether Democrats are ready to strike a deal.
The common force pushing forward these various policy opportunities is the evolution in conservative thinking toward greater focus on the interests of the working class and a greater role for government in addressing the free market’s shortcomings. Attitudes within the Republican Party’s shifting coalition of voters have moved clearly in this direction, and at least some of its leaders have as well. If American voters elect a new Republican Congress this fall, it could provide the G.O.P. with an early test of whether the party is ready to make good on that promise.
Oren Cass is the executive director at American Compass, a think tank for conservative economics. Chris Griswold is the policy director.
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