Larry Kudlow praises Sen. Minority Leader Mitch McConnell for attempting to hold the line on stimulus spending. Kudlow explains:

We don’t need bailout nation. Nor do we need the government picking winners and losers in a massive, Keynesian, new-New Deal spending extravaganza. And it’s not Obama’s middle-class tax cut that’s going to get us out of this economic jam. At best his vision is incomplete. But at worst his aversion to successful earners and investors is a real obstacle to full economic recovery.

So what can Repbulicans do, and what ideas can they offer? Kudlow has a few suggestions:

In fact, the GOP has a great opportunity to challenge Obama’s Keynesian pump-priming by insisting there be a major tax-cut component in any new fiscal package. Republicans shouldn’t merely push for somewhat less government spending. They have to make a bold case that tax rates matter for economic growth and job creation. They must insist that any recovery package includes this key element. Shift the debate. Say clearly that a reenergized economy cannot occur without lower marginal tax rates.

In particular, the GOP position should include lower tax rates on large and small businesses. Right now the top federal tax rate for C-corps is 35 percent. Small businesses, which pay the individual rate, also are taxed at 35 percent. These rates should be 20 percent for both C-corps and S-corps (including LLCs). This would make a huge difference. It would be a boon for our global competitiveness, since companies in the U.S. (as well as Japan) are taxed way above the rates of other advanced countries. It also would attract job-creating investment flows to the U.S. at a time when capital is on strike in our financial markets and economy. And while businesses collect corporate taxes, it’s really consumers who pay the final cost.

Republicans also could promote a middle-class tax cut that would reduce the 28 percent and 25 percent brackets down to 15 percent. And of course, the GOP should work hard to maintain the Bush tax cuts on capital gains, dividends, inheritance, and top individual rates.
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The whole debate in Washington is heavily skewed toward government spending on infrastructure. It’s all spending and virtually no tax cuts. For a more balanced and effective recovery policy, the GOP has to bolster its argument for spending discipline with a loud case for tax cuts.

It is not likely that the Obama administration will look kindly upon these ideas, nor be inclined to trim its mammoth spending plans. But that shouldn’t concern Republicans. Their task is three-fold. First, they should object strenuously and loudly to the worst ideas pursued by the Democrats (e.g. card check, protectionism, nationalized health care, tax increases). Second, they need to explain the dangers of spending hundreds of billions of dollars we don’t have. (“Think of the children!” Better yet, think of the New Deal and Japan circa 1990.) And third, they’d be wise to offer viable alternatives (e.g. domestic energy development, business tax cuts, free trade,  market-based health care).

The most Republicans can hope for is to trim and guide the Obama plan around the margins, and to explain to the voters the fundamental difference between the parties. That’s what life in the minority is: losing most of the time, extracting a few wins and developing an alternative vision that, when the time is right, can provide the basis for a change of course–if the majority party doesn’t deliver.