Newt Gingrich Letter

Observations From Asia

I spent the last week traveling to Hong Kong and Singapore, and being abroad has helped put some developments in perspective. I am writing this from Singapore where I will be attending the "Shangri-La Dialogue" with Defense Secretary Don Rumsfeld and the national security leaders of many Asian countries.

I will report on the national security aspects of that conference next week.

But for now, I want to share with you some of my observations from my travels and the events of the week.

The Challenge of China

During my trip to Asia, I was constantly reminded of the challenge to American competitiveness and prosperity that comes with the rise of China. One casino developer I spoke to while I was there is building a billion-dollar-plus casino and resort in Macau, China. He summed up one of our core challenges of competing in the global economy: "I have done two billion-dollar projects in Las Vegas and China in the last few years. The workmanship in China was better and the 62,000 applicants for jobs were more enthusiastic and better qualified. They are going to be real competitors economically." But notice he is talking about manual laborers’ building a casino. The real challenge posed by China is that it is currently moving quickly from the industrial age into the information age. Now read the quote again as if he were commenting on knowledge workers in the near future and you begin to see how competitive China will be.

As I outlined in my book, Winning the Future, China along with India will be a major economic competitor in the not-so-distant future. To compete, we must transform education, litigation, regulation and taxation policies, as well as our healthcare system. We also must formulate and implement an energy and environmental strategy to produce low-cost, safe, efficient and reliable power that protects the environment. As 1.5 billion Chinese and one billion Indians rapidly advance into the information age, they will pursue wealth creation at a pace unknown in all of human history. At stake is not a meaningless race to be No. 1, but the important obligation to ensure safety and prosperity for our children and our grandchildren. We owe them a nation as strong and free as the one our parents fought and worked to give us.

Revolutionary Wealth

Futurists Alvin and Heidi Toffler who wrote Future Shock, Third Wave and Power Shift, write extensively about the rise of China in their newly released book called Revolutionary Wealth. I interviewed Alvin Toffler on C-SPAN’s "After Words," which aired over the weekend and will be rebroadcast Sunday, June 11, at 3:00 p.m. on C-SPAN 2. Revolutionary Wealth is not so much about predicting the future as it is a book that contextualizes the rapid pace of change (I often say that we will experience four to seven times the rate of change in the years to come and that the next 25 years will bring us as much science and technological change as we have experienced in all of the last 100 years) that we have and will continue to live through. The Tofflers, who have been dear friends of mine for years, talk about the deep fundamentals of time, space and knowledge and significantly stress that the industrial-age institutions of the past, especially in government, are hopelessly obsolete in the information age. They explore the future of a breathtaking variety of topics from education to science to family to energy to "third wave" farming to the "prosumer" economy in an ever-changing world with unpredictable outcomes. One prediction however, is that the world will likely see a revolution of unprecedented wealth creation. Yet, today’s winners may quickly become tomorrow’s losers. To grasp what is certain — change — this book will help you to think your way into the future.

Expel Rep. Jefferson From the Ways and Means Committee

As someone who led the pledge in the Contract with America for members of Congress to abide by the same laws as the rest of us, I have been following the case of Rep. William Jefferson (D-La.) with growing concern. The time has come for the House leadership to make clear that, in protesting the FBI’s raid on Jefferson’s congressional office, they are protecting the Constitution, not protecting corruption.

Nothing would send this message with more clarity than to move this week to strip Rep. Jefferson of his position on the powerful Ways and Means Committee. Simultaneously, the House Ethics Committee should begin proceedings leading to the possible expulsion of Jefferson from Congress. The Ethics Committee also should ask the Justice Department to cooperate in this effort to protect the House from corruption, and the Justice Department should agree. Like all of us, Rep. Jefferson has the presumption of innocence, and he should be allowed to defend himself. But as a member of the U.S. House of Representatives, he should be notified by leadership that if he fails to cooperate in timely manner to House actions, the House will protect its institutional integrity from behavior unbecoming of a member and intolerable to the People’s House by moving to expel Jefferson.

There should be no confusion: No American — including a member of Congress — is above the law. Congress has the constitutional right and obligation to protect itself from corruption — to protect itself. It should move now to assert this right.

Can the House Stop a Bad Immigration Bill?

Speaking of the House, watch carefully to see who from the House gets appointed to the conference committee to negotiate differences with the Senate on immigration reform. The Senate amnesty bill is overwhelmingly opposed by House Republicans. As for the Senate, the House focus on controlling the border and enforcement is totally unacceptable to the McCain-Kennedy center-left coalition that currently dominates the Senate. The White House is apparently trying to pressure House Republicans to stack the conference with members who will cave in to the amnesty advocates. The announcement of the conference members will be a big indicator of whether the conservative movement has any hope of stopping a really bad Senate bill.

One positive addition to the border-security and immigration debate is Rep. Mike Pence’s (R-Ind.) bill, the Border Integrity and Immigration Reform Act. This bill is as close to the right solution as I have seen. It sets up a four-step process starting with what is needed and universally agreed upon — border security. Second, it does not provide amnesty for people in the United States illegally. It requires them to go home. Next, it sets up a work-visa program using electronic bio-metric security based on conservative market principles. After an American employer can, in good faith, show that no American worker will fill a job offer, a work-visa holder may be hired. The key feature is that, in order for people who are here illegally to get a work visa, they must go home, because work visas will only be issued outside of the United States. Fourth, once the program is set up, companies that continue to ignore the law will be sanctioned severely.

I hope the House will take a serious look at Rep. Pence’s thoughtful and pragmatic approach to solving this issue.

P.S.: Watch your pocket and warn your friends: The tax-increase gang is gathering momentum.

For the last five years, President Bush and the congressional Republicans have generally been terrific in fighting for continuing tax cuts and in rejecting any effort to raise taxes. These tax cuts have powered the entrepreneurial drive which has given us the fastest growth rate of any industrialized country (5.3% last quarter).

However, the left rejects all the evidence that tax cuts are working. They are desperate for more money for the federal government to pay for more bureaucracy, take care of more public-employee union members (now by far the largest part of the union movement) and increase dependency on the bureaucracy.

But the left knows it cannot openly support a tax increase. So instead the left will attempt to steal conservative language and talk about "balancing the budget." But be warned: It’s a step-by-step conspiracy to raise your taxes. Here’s how it works:

Step One: To "balance the budget," the liberal left will explain that everything has to "be on the table" — by which they mean tax increases.

Step Two: Then they will explain that serious transformation of entitlements such as personal Social Security savings accounts or health savings accounts for Medicare are impossible and therefore off the table.

Step Three: Then they will explain that there is a bipartisan pork coalition among incumbents who will make it impossible to control spending.

Step Four: Finally, balancing the budget will be defined as a big tax increase and everyone who is against the big tax increase will be attacked as fiscally irresponsible.

We have been here before, and we have seen this dance done again and again. The only way to stop it is to not let it get started. No conservative should agree to a bipartisan effort to balance the budget if it includes tax increases, because in the end, that is all we will get.

The time to draw the line is now.

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