And because there are only two gubernatorial elections in 2013, Christie’s bid for re-election is attracting a good deal of national attention, almost all of which has been positive. A new NBC News/Marist poll, released on Wednesday of last week found that Christie has a 69 percent approval rating, and that he leads his most likely Democratic challenger, State Senator  Barbara Buono, by 60 percent to 28 percent among registered voters. Among likely voters, Christie’s support increases to 62 percent while Buono’s stays the same.

Christie still has to overcome the fact that the New Jersey electorate skews left, as demonstrated by Barack Obama’s crushing 58to-40 percent victory over Mitt Romney in last year’s presidential election. One can imagine Democrats and left-of-center independents deciding they can’t back a self-described conservative for governor, no matter how much they like him personally. Mindful of this danger, Christie has been keen to emphasize his willingness to work across the aisle. In a new campaign advertisement, a narrator with a soothing baritone voice praises the New Jersey governor for “working with Democrats and Republicans, believing that as long as you stick to your principles, compromise isn’t a dirty word.”

To state the obvious, this is a message that doesn’t just resonate in New Jersey. Christie, having emerged on the national political scene as a bruiser best known for his heated confrontations at town hall meetings across the Garden State, has lately positioned himself as a bipartisan problem solver. In the immediate aftermath of Hurricane Sandy, he lashed out at congressional Republicans for, in his view, putting party politics ahead of the interests of his constituents. He famously stood shoulder to shoulder with President Obama just days before the 2012 presidential election as they surveyed the devastation Sandy had left behind, praising the same man he had campaigned against on Mitt Romney’s behalf for his capable response to the disaster. Many Republicans who had admired Christie were troubled by what they saw as his betrayal of the GOP. Cynics suggested that Christie recognized that his best path to a victory in a heavily Democratic state was to cozy up to a Democratic administration, and so he had no compunction about putting political ambition above political loyalty. Another interpretation, of course, is that Christie had put the interests of New Jerseyans first, an interpretation that had the added benefit of endearing him to voters in his state and beyond.

In light of his gravity-defying popularity, it is hardly surprising that Christie is seen as presidential timber. Naturally, Christie and his re-election team insist that they are focused on his re-election bid, and so they refuse to entertain questions about his presidential ambitions. Yet it is no secret that a number of influential Republican donors and activists had hoped he would enter the presidential race in 2012. And despite his supposed betrayals, Christie continues to command considerable respect among the Republican rank and file. Christie’s greatest success is that, like Obama at the height of his powers, he strikes many voters as somehow above politics. But whereas Obama was seen as cool, stylish and cerebral, Christie is seen as an unpretentious everyman who cares only about getting things done. This image has proven enormously beneficial to Christie’s fund-raising efforts, including among some California-based technology entrepreneurs and investors who haven’t backed GOP candidates in the past. Mark Zuckerberg, the founder and chief executive officer of Facebook, famously co-hosted a Christie fundraiser with his wife, Priscilla Chan, motivated in part by his work with Christie and Newark Mayor Cory Booker, another rising star, on education reform in New Jersey’s largest city.

It is certainly possible that Christie’s centrist gestures will alienate conservative presidential primary voters and activists. Earlier this year the Conservative Political Action Committee pointedly refused to invite him to address their annual conference, which has become a who’s who of GOP presidential contenders. It is worth noting, however, that unlike many other Northeast Republicans, Christie is opposed to abortion and same-sex marriage, though he only rarely discusses the former and has called for a statewide referendum on the latter ‑ a referendum his fellow opponents of same-sex marriage may well lose. He rolled back a 2004 increase in New Jersey’s top state income tax bracket, despite its popularity. More recently he backed a 10 percent across-the-board income tax cut. Although spending reductions haven’t gone as far as some conservatives might like, Christie has trimmed state government employment and canceled a Hudson River rail tunnel on the grounds that its costs were likely to spiral out of control, a record that led the tough graders at the libertarian Cato Institute to give him a respectable B in its last Fiscal Policy Report Card on America’s Governors. His central legislative achievement ‑ reforming pension and health benefits for public employees ‑ has earned him the lasting enmity of the state’s mighty public-sector unions, yet it also demonstrated his political prowess, as he successfully wooed some of New Jersey’s most powerful Democratic machine politicians to get his way.

Christie brings a number of other strengths to the table as well. His recent emphasis on criminal justice reform and education reform suggest that he has learned the right lessons from Bush’s compassionate conservatism, which will make it difficult for Democrats to caricature him as a heartless friend of the plutocracy. He also has the potential to reach constituencies other Republicans have left cold. As Jamelle Bouie of The American Prospect has argued, the Republican failure to match George W. Bush’s performance among African-American voters in the presidential elections of 2008 and 2012 contributed to the party’s defeat in states like Florida, Virginia and Ohio. A recent Quinnipiac survey found that Christie’s approval rating among black voters in New Jersey was 31 percent, less than half of his 65 percent approval rating among white voters but a decent result for a Republican all the same. Moreover, his popularity in New Jersey might give a Christie-led GOP ticket a boost in neighboring Pennsylvania, a state Republican presidential candidates have been losing since 1988.

And Christie’s outsider status as a governor will give him much-needed distance from the Republican leadership in Congress, which according to a Pew survey released last week has only a 22 percent approval rating. At a time when middle-income voters remain deeply skeptical that Republicans care about their economic interests, Christie’s distinctive profile creates an enormous opportunity. His political celebrity means that voters, including all-important swing voters, will be willing to give him a hearing even when they wouldn’t extend the same courtesy to a more conventional Republican.

The biggest question that remains is whether Christie is capable of crafting a serious reform agenda that can match the challenges of sluggish growth, a dysfunctional public sector, rising health and education costs, and a global security environment rife with danger. We won’t know the answer to this question for a long time. But given his considerable strengths, Christie would be foolish not to at least try.

PHOTO: New Jersey Governor Chris Christie speaks at a groundbreaking ceremony for the Technology Enhanced Accelerated Learning Center news conference in Newark, New Jersey, May 7, 2013. REUTERS/Lucas Jackson

In an interview with ABC News this past weekend, Bill Richardson, the former governor of New Mexico and a veteran of the Clinton White House, shared his thoughts on Sen. Ted Cruz, a Republican from Texas who has been gaining prominence as a staunch, and sometimes strident, conservative voice. Though Richardson acknowledged that Cruz is “articulate,” he accused the Texas senator of having introduced “a measure of incivility in the political process.” When asked if Cruz “represents most Hispanics with his politics,” Richardson replied that because Cruz is anti-immigration, “I don’t think he should be defined as a Hispanic.”

Regardless of Richardson’s true meaning, he hit a nerve. Bill Richardson and Ted Cruz are both entitled to define themselves as Hispanics, as both have roots in Spanish-speaking countries. Yet both men, like a large and growing number of Hispanics, are of mixed parentage. Richardson is the son of a father who was half-Anglo-American and half-Mexican and a Mexican mother. Ted Cruz is the son of an Irish-American mother and a Cuban immigrant father. And so the Richardson-Cruz kerfuffle gives us an opportunity to think about the future of Hispanic identity.

As of the 2010 Census, Hispanics represented 16.3 percent of the total U.S. population. And in the decades to come, the Census Bureau projects that the Hispanic share of the U.S. population will increase dramatically, from just under one American in six to just under one in three.

But there is a small complication with these numbers. The Census Bureau relies on individuals to self-identify with a given ethnic category. We now know, however, that many individuals who could identify as Hispanic, by virtue of a parent or grandparent born in a Spanish-speaking country, choose not to do so. In recent years, Brian Duncan, an economist at the University of Colorado Denver, and Stephen Trejo, an economist at the University of Texas at Austin, have been studying this “ethnic attrition rate” among U.S. immigrants and their descendants. And their findings suggest that while a given generation of Americans might identify as Hispanic, there is a decent chance that their children will not.

To understand Duncan and Trejo’s findings, it helps to first understand that assimilation is a multi-generational process. The first immigrant generation, which consists of foreign-born individuals, is almost by definition less assimilated than those that follow. Members of the second, which consists of native-born individuals with at least one foreign-born parent, tend to have higher levels of English language proficiency and educational attainment than members of the first, and more friendships and relationships outside of their parents’ ethnic community. The third generation, which consists of native-born individuals with two native-born parents and at least one foreign-born grandparent, is commonly expected to be more assimilated still. Duncan and Trejo draw on data from the Current Population Survey, gathered between 1994 and 2000, to explore how Americans across immigrant generations describe their ethnic identity.

For example, while virtually all third-generation Mexican-Americans with three or four Mexican-born grandparents identify as being of Mexican descent, Duncan and Trejo observe that only 79 percent of those with two Mexican-born grandparents do the same. For those with only one Mexican-born grandparent, the share falls to 58 percent.

Only 17 percent of third-generation Mexican-Americans have three or four Mexican-born grandparents, so the ethnic attrition rate is quite high: 30 percent of Americans with at least one Mexican-born grandparent do not identify as being of Mexican descent. It appears, according to Duncan and Trejo, that the educational attainment of Mexican-Americans who don’t identify as Mexican is higher than for those who do.

This suggests that when we measure life outcomes for third-generation Mexican-Americans, we might be biasing the results by relying on self-identification and thus failing to include large numbers of individuals with at least one Mexican-born grandparent.

Duncan and Trejo have studied a number of other ethnic groups as well, and they find that intermarriage has an enormous impact on ethnic identification for the descendants of all immigrants, not just those of Mexican origin. Among second-generation Indian-Americans, 63 percent have two Indian-born parents. Within this subgroup, 86 percent identify as Asian.

But within the subgroup of second-generation Indian-Americans with only one Indian-born parent, only 26 percent identify as Asian. Salvadoran-Americans have a much higher intermarriage rate, and so only 13 percent of second-generation Salvadoran-Americans have two Salvadoran-born parents and 76 percent of these Salvadoran-Americans identify as Hispanic. But Hispanic identification among second-generation Salvadoran-Americans with only one Salvadoran-born parent is a mere 14 percent.

And by the time we reach the third generation, ethnic attrition appears to skyrocket. Almost 80 percent of third-generation Mexican-Americans and Puerto Ricans have no more than two grandparents born in Mexico or Puerto Rico respectively. The same is true of 90 percent of third-generation Americans of Cuban, Dominican, Chinese, and Filipino ancestry. Given that ethnic attrition tends to rise as the number of grandparents born in the relevant source country falls, these numbers don’t bode well for Hispanic or Asian self-identification.

This doesn’t necessarily mean that the children of second-generation Americans like Bill Richardson and Ted Cruz won’t define themselves as Hispanic. Ethnic attrition rates could fall over time. Hispanic identity is already gaining in prominence and prestige, and there is good reason to believe that this trend will continue. It is also possible, however, that Hispanic identity will lose its salience as the children and grandchildren of Richardson and Ted Cruz, the products of generations of intermarriage, grow culturally indistinguishable from Americans who embrace Anglo identity. Pretty soon we might find the idea of Bill Richardson suggesting that Ted Cruz isn’t Hispanic enough faintly ridiculous. Indeed, that day may have already come.

PHOTO: Children of immigrants look on as families, workers and supporters rally in front of the Federal building downtown to protest the United States Department of Homeland Security I-9 audits of their employment eligibility in San Diego, April 26, 2013. REUTERS/Mike Blake

This week, various political luminaries gathered in Dallas, Texas, to celebrate the presidency of George W. Bush, who presided over one of the most tumultuous periods in modern American history. Among liberals, Bush is considered a uniquely awful president, having led the United States into the ill-fated invasion and occupation of Iraq and having passed into law deep tax cuts that contributed to America’s present-day fiscal crunch.

Conservatives are more conflicted. Some dismiss him as a big-government conservative who failed to heed the wisdom of Goldwater and Reagan. Others, including many who served in the Bush administration, believe that as time passes, he will be lauded for his achievements. The complicated truth is that for all his flaws, George W. Bush had a better understanding of the challenges facing Republicans than most Obama-era conservatives. His rocky tenure is best understood as a testament to how difficult it will be to modernize the GOP.

Many hero-worshipped Bush during the early days of the war on terror, seeing him as a humble Christian leader who was always willing to take the hard road rather than the easy one. But as the public turned against the Iraq War, and as his efforts on behalf of Social Security reform and immigration reform engendered a fierce political backlash, a growing number of conservatives came to see Bush as an apostate who expanded Medicare and the federal role in education while failing to roll back the growth of government. The Bush administration’s response to the 2008 financial crisis alienated conservatives even further, as the ominously named Troubled Asset Relief Program (TARP), engineered by Treasury Secretary Hank Paulson, struck many as a hardly-any-strings-attached Wall Street bailout. The Tea Party movement arose in no small part as a repudiation of Bush and his fitful efforts to transform the GOP.

Bush administration veterans, meanwhile, remain convinced that their president has gotten a bum rap. Keith Hennessey, who served as director of the National Economic Council during Bush’s second term, recently described Bush’s keen intelligence, and in doing so worked the former president’s liberal detractors into a frenzy. Among my friends and acquaintances who served in the Bush White House, the general view is that while Bush had solidly conservative instincts on domestic policy matters, he was hemmed in by the demands of the war on terror and the recalcitrance of Republican lawmakers. When the administration pressed for reform of Medicaid and, later on, changes in the way employer-sponsored health insurance would be treated in the tax code, congressional Republicans hardly ever gave him in inch. President Bush had little leverage, as he needed congressional Republicans to approve military spending and to defend his administration in the endless controversies over enemy combatants and surveillance that sapped its strength.

One of the ironies of the Bush presidency is that for all its failures, it was rooted in a clear-eyed diagnosis of the challenges facing Republicans. The end of the Cold War and the success of the Clinton-era Democrats’ centrism had badly undermined the GOP, which by the late 1990s risked irrelevance. Newt Gingrich’s efforts to shrink government were successfully countered by President Bill Clinton’s protean progressive centrism, and so George W. Bush, as governor of Texas, identified an alternative way forward.

During his first presidential run, Bush famously lambasted congressional Republicans for “balancing their budget on the backs of the poor,” and he touted his various efforts to raise literacy and math scores for black and Latino students in Texas. Bush recognized that Republicans needed to be seen not as opponents of government but rather as its reformers, and his moderation was essential to his razor-thin, hotly contested 2000 victory.

This is not to suggest that Bush had the right policy prescriptions all or even most of the time. There is a strong case that the Bush administration should have done much more to address the larger challenges facing less skilled workers.

Bush’s vision of an “ownership society,” which centered on increasing homeownership among low-income Americans, building on the work of his Democratic predecessor, seems in hindsight to have been ill-advised, particularly in the wake of the housing bust. Bush’s faith-based initiative, which aimed to empower religious organizations to take a bigger role in providing them, was always very limited in scope. The Bush-era tax cuts, arguably the centerpiece of the Bush domestic policy, were at best a mixed bag. The cuts in top marginal tax rates and capital gains may well have improved the incentives to work and invest at the top end, and the increase in the child tax credit benefited large numbers of middle-income families. But in the absence of a more ambitious overhaul of the tax code, it’s not clear that these gains were worth the loss of revenue.

Republicans would be wise to heed some of the political lessons of George W. Bush, positive and negative. The most obvious lesson is that the GOP won’t flourish unless it is seen as the defender of the economic interests of middle-income Americans. In 2000, Bush’s emphasis on K-12 education and tax relief was in tune with the voting public. By 2005, however, the Bush administration’s domestic policy was adrift, as it championed misbegotten, ill-explained Social Security reform just as defined benefit pensions were vanishing and middle-class squeeze became a national obsession.

And as James Capretta argues in “Recasting Conservative Economics”in the new issue ofNational Affairs, the right-of-center policy journal (where I am a contributing editor), Republicans need to tell a more compelling story about the Bush years and the 2008 financial crisis with which they will forever be associated. In 2012, it often seemed as though Mitt Romney had forgotten that Bush had ever been in office, and he struggled to articulate how and why his views differed from those of the former president.

The outlines of a compelling counternarrative of what went wrong during the crisis are emerging. One view, which has gained in popularity among right-of-center intellectuals but remains profoundly unpopular among the conservative rank-and-file, is that Senator John McCain was actually right to say that “the fundamentals of our economy are strong” in 2008 — the only problem was that the Federal Reserve failed to do enough to keep aggregate demand stable as the financial crisis took its toll. This has been dubbed a “market monetarist” interpretation of the Great Recession.

The conservative intelligentsia has also rallied around the position that the stability of the financial system can be attributed in part to the overreliance of America’s major financial institutions on debt rather than equity. Wall Street Republicans resist this interpretation, as more stringent equity requirements would reduce profits. Yet at least one prominent Republican lawmaker, Senator David Vitter of Louisiana, has joined forces with the populist Democratic Senator Sherrod Brown of Ohio to push for much higher equity requirements for banks with assets of more than $400 billion, a measure that will tend to curb the size of the largest banks. The idea is that higher equity requirements will help cushion banks against losses, thus forestalling future taxpayer bailouts.

One can imagine a Republican party that embraces tough equity requirements and market monetarism in the name of preventing future financial crises and catastrophic economic downturns. One can also imagine a GOP that takes George W. Bush’s lead by at least trying to craft a compelling message for middle-income voters. But in 2013, over four years after Bush left office, the GOP still doesn’t know what to make of his legacy, and the result is a party and a movement that is very much adrift.

PHOTO: U.S. President Barack Obama (L) stands alongside (L-R) former presidents George W. Bush, Bill Clinton, George H.W. Bush and Jimmy Carter as they attend the dedication ceremony for the George W. Bush Presidential Center in Dallas, April 25, 2013. REUTERS/Jason Reed

I grew up in a Muslim household in New York City’s polyglot outer boroughs, and the Tsarnaev brothers strike me, in broad outline, as recognizable figures. The younger brother’s Twitter feed, which has attracted wide attention, reads like dispatches from the collective id of at least a quarter of my high school classmates. Also recognizable is the brothers’ lower-middle-class but gentrifying Cambridge milieu, which bears a strong resemblance to the neighborhood in which I was raised. So like many Americans of Muslim origin, I’ve been struggling to understand what exactly went wrong in their heads. How could a “douchebag” and a “stoner” ‑ and here I’m paraphrasing the words of the Tsarnaev brothers’ acquaintances and friends ‑ have committed one of the most gruesome terror attacks in modern American history? We might never have a good answer to this question, and certainly won’t have a good answer anytime soon. But what we can do is get a sense of what we do and don’t know about U.S. Muslims, and what it might mean for our future.

Although I can’t claim to be representative of U.S. Muslims as a whole, my experience leads me to believe that America’s Muslim community will grow more secular over time. My parents are originally from Bangladesh, a Muslim-majority country of 150 million that is currently in the throes of a violent clash over the role of Islam in public life. While Bangladesh has made impressive strides in a number of social indicators in recent decades, its poverty has sent large numbers of migrants to India, the Persian Gulf, Europe, Southeast Asia and, over the past two decades in particular, the United States.

The Bangladeshi community has largely escaped notice in the United States, as it remains relatively small; when I was growing up, it was smaller still. My first years were thus spent not in a Bangladeshi enclave but rather in a neighborhood with a large Hasidic Jewish population. We later moved to a neighborhood that was home to large numbers of African evangelicals, Tibetan Buddhists, Russian Jews and South Asian Muslims. Although hard numbers are difficult to come by, New York City’s Muslim population appeared to have grown considerably over the course of my childhood. Head scarves and other traditional modes of dress are common in heavily Muslim precincts of Brooklyn and Queens, particularly among more recent immigrants. Yet it remains to be seen if this kind of very visible religious devotion will persist among second-generation South Asian Muslims, particularly if religious belief continues to fade in the population as a whole. I certainly haven’t seen it among my peers, but I know only a narrow spectrum of second-generation South Asian Muslims. These people identify more as Asian Americans than as members of a global Islamic community.

The best survey evidence offers only a limited and inconclusive portrait of America’s Muslim community. The Pew Research Center estimates that there are 2.75 million Muslims living in the United States, and that 63 percent were born outside of the country. Of this foreign-born slice of the Muslim population, 45 percent arrived in the United States after 1990 and 70 percent are naturalized U.S. citizens. This population is incredibly diverse. Roughly 13 percent of all U.S. Muslims are native-born African-Americans. Some U.S. Muslims are highly educated professionals leading integrated lives, while others are less-skilled workers earning poverty-level incomes in ethnic enclaves.

According to Pew, 69 percent of U.S. Muslims claim that religion is an important part of their lives; 47 percent report attending worship services on a weekly basis. These numbers closely parallel the numbers for U.S. Christians. It is also true, however, that one-fifth of U.S. Muslims seldom or never attend worship services, a sure sign of secularization.

Another sign is that a large majority of U.S. Muslims appear to be comfortable with religious pluralism. Pew found that 56 percent of U.S. Muslims believe that many different religions can lead to eternal life while 35 percent believe that only Islam will get you there. Similarly, 57 percent of U.S. Muslims believe that there are many valid ways to interpret Islamic teachings, as opposed to 37 percent who maintain that only one interpretation is valid. Suffice it to say, the notion that many different religions are of equal value is not likely to be embraced by the religiously orthodox. Indeed, one possibility is that this more relaxed approach to the demands of religion represents a way station on the road to abandoning religion entirely.

Americans of all stripes are abandoning organized religion at a brisk pace. While less than a 10th of Americans born from 1928 to 1945 are religiously unaffiliated, the same is true of one-third of Americans born from 1990 to 1994, according to a Pew Research Center survey released late last year. This dynamic seems to apply to U.S. Muslims as much as it applies to U.S. Christians. Part of the reason could be that the hold of religious communities on our lives has grown more tenuous. Peter Skerry, a political scientist at Boston College who has been studying the cultural and political integration of U.S. Muslims and Arabs for more than a decade, has observed that only one-third of U.S. Muslims report going to a mosque for social or religious activities apart from regular services. It doesn’t appear that mosques have become the kernels of tight-knit communities, as the churches that were so central to immigrant life a century ago did.

Even if secularization does take hold, there is no reason to believe that religious extremism will fade away. Indeed, the opposite could come to pass, as a shrinking number of moderate Muslims leaves behind a more isolated core of orthodox Muslim believers who see themselves in conflict with an increasingly secular America. Even as the vast majority of U.S. Muslims integrate into U.S. cultural, political and economic institutions, some small minority might continue to find in Islam a convenient excuse for anti-American rhetoric and action. The Tsarnaev brothers, after all, didn’t live in a hotbed of Islamic radicalism; they lived in Inman Square, a neighborhood that is best known for its large Portuguese-speaking population. Perhaps the brothers would have been less likely to embrace extremism had they been rooted in a stronger Muslim religious community, complete with stronger role models. Or perhaps we need to accept the fact that some irreducible number of people will commit vile, despicable crimes no matter what we as a society do to prevent them.

Our best hope is that just as the terrorist violence committed by left-wing radicals in the 1960s and 1970s eventually burned out, Islamic radicalism will soon be an unhappy memory. But we’d be foolish to dismiss the darker possibility that a tiny subgroup of Muslim fanatics will continue to pose a threat for many decades to come.

PHOTO: People pray at at the Imam al-Khoei Foundation in New York, January 3, 2012. REUTERS/Eduardo Munoz

So why, one might ask, is Weiner being taken seriously as a potential mayoral candidate? One reason is that he has $4.3 million in campaign funds, and he is entitled to an additional $1.5 million in public matching funds under New York City’s generous campaign finance system. The bigger and more depressing reason is that the leading Democratic mayoral candidates are hilariously ill-equipped to face the fiscal challenges to come, and voters are very open to someone new.

There are  some solid candidates in the mix, but they’re not running as Democrats. Joe Lhota, the former MTA chief who served as Rudolph Giuliani’s right-hand man throughout the 1990s, has a wealth of administrative experience that would serve him well. Adolfo Carrión Jr., the Independence Party nominee and former Bronx borough president, is running on an innovative platform centered on revitalizing New York City’s neglected outer boroughs. But short of a miracle or a Bloomberg-level injection of super PAC money, it will be hard for either candidate to overcome the fact that they aren’t Democrats.

It is true that New York City hasn’t had a Democratic mayor since Giuliani’s election in 1993. Yet it is also true that the city is reliably, almost monolithically, left of center, with Democrats outnumbering Republicans 6 to 1. The city that elected Giuliani 20 years ago has changed in profound ways: The Latino, Asian and black shares of the electorate have climbed considerably; lower-middle-income white ethnics have lost political clout relative to upper-middle-income college-educated liberals; and crime rates have plummeted. In other respects, however, the city is much the same. While local public-employee unions have lost ground in states like Wisconsin and Indiana, they are as strong and influential as ever in New York.

As Christopher Elmendorf and David Schleicher, law professors at the University of California at Davis and George Mason University, respectively, observe in their 2012 paper, “Informing Consent: Voter Ignorance, Political Parties, and Election Law,” voters in cities such as New York with partisan elections for local officials vote for the party they support on the national scene. This is despite the fact that issues at the local level are radically different from those at the national level. One might be a “liberal” on abortion rights and federal higher education funding but a “conservative” on fixing potholes and controlling crime. In an ideal world, we might have local political parties ‑ say, the Free Subways Party, the Stop-and-Friskers and the Anti-Tax Free Love Alliance ‑ organized around specifically local issues. But national political parties have the First Amendment right to take part in local races, and they take advantage of it.

In a city where Democrats dominate national elections, local non-Democrats have to take extraordinary measures to win. Bloomberg spent more than $100 million in 2009 to overcome his status as a (rather liberal) non-Democrat, and his victory over a competent but decidedly uncharismatic opponent, Democratic Comptroller Bill Thompson, proved surprisingly narrow all the same.

What this Democratic advantage means is that the city’s next mayor will most likely be determined by a small number of Democratic primary voters, many of whom are public employees. Two of the Democrats vying for mayor this year, Bill de Blasio, the city’s public advocate, and John Liu, the city’s comptroller, are both known for their close ties to the city’s public-employee unions. The other major Democratic candidates ‑ front-runner Christine Quinn, the New York City Council speaker, and the aforementioned Thompson ‑ are only slightly less close to city unions. One consequence of this tight alliance between local Democrats and public workers is that little of New York City’s political conversation centers on the big fiscal challenges facing the five boroughs.

Nicole Gelinas, a senior fellow at the Manhattan Institute and a friend and colleague, has documented in a series of articles and op-eds the alarming rise in inflation-adjusted municipal spending since Bloomberg came into office. City-funded spending in fiscal year 2002 was $33.9 billion in current dollars. In fiscal year 2014, the Bloomberg administration projects spending of $50.7 billion ‑ an inflation-adjusted increase of almost 50 percent. And lest you think the administration has been paving the streets with gold and pouring money into upgrading basic services, most of this increase has flowed into “uncontrollable” expenditures, like pension and health benefits and other fringe benefits for city workers and retirees. Pension contributions have increased from $2 billion to $8.2 billion from fiscal year 2002 to fiscal year 2014 in inflation-adjusted terms while health and other benefits have gone from $3.1 billion to $8.8 billion. That additional $11.9 billion in pension and benefit spending would be more than enough to double the size of the city’s police force, or even to build seawalls strong enough to protect the city from future hurricanes.

You would think New York’s mayoral candidates would be talking about this enormously important rise in the cost of meeting pension and benefit obligations, which threatens over time to squeeze spending on the services all New Yorkers, rich and poor, depend on. Indeed, as Gelinas notes, the high cost of city-funded benefits is forcing New York City to reduce its workforce. The number of police officers, for example, is expected to go from 36,790 to 34,483. One obvious way to keep up and even expand the police force and other key services is to work harder to contain the cost of benefits. But the city’s public-employee unions aren’t exactly thrilled about that; they will see to it that New York City’s next mayor does not drive a hard bargain.

Pension and health benefits are just the tip of the iceberg. The much bigger challenge facing New York City ‑ as Harvard economist Edward Glaeser, who is also a senior fellow at the Manhattan Institute, has vividly explained ‑ is how dependent New York City has grown on tax revenue harvested from Wall Street. In a City Journal article published last year, Glaeser argued that New York has come to rely on the financial services industry as a golden goose that papers over other weaknesses. But as he explains, powerful structural forces are chipping away at New York’s financial-service industry, ranging from competition from other cities in the United States and abroad to a new regulatory regime that (hopefully) will contain the industry’s sometimes reckless expansion. The city has spent three decades riding a financial services boom that has proven unsustainable, which means that economic diversification is an imperative. Unless the city fosters more growth and entrepreneurship, by relaxing zoning laws to allow for new construction and making the city’s rules and regulations more startup-friendly, among other things, New Yorkers could find themselves in the worst possible position: with rising pension and benefit costs squeezing taxpayers who find themselves struggling as Wall Street ceases to be the gift that keeps on giving.

I have no idea whether Anthony Weiner is capable of addressing these pressing issues. But if he even comes close, New Yorkers ought to forgive his boorish behavior, because they need a fighter at the helm. And to be clear, New York City is not alone. Dozens of cities across the country have mayoral elections this year, including Los Angeles, Houston, Boston, Detroit and Minneapolis. America’s big cities are our engines of growth and prosperity, and when they suffer, the rest of the country suffers along with them.

PHOTO: U.S. Rep. Anthony Weiner (D-NY) pauses as he announces that he will resign from the United States House of Representatives during a news conference in Brooklyn, New York, June 16, 2011.REUTERS/Mike Segar

You’d think comprehensive immigration reform legislation would be a done deal. President Barack Obama has promised to overhaul immigration policy since his 2008 campaign, and leading Republicans have been keen to do the same in the wake of the last presidential election. Last week the U.S. Chamber of Commerce and the AFL-CIO, representing the interests of Corporate America and organized labor, respectively, endorsed a series of reform proposals, including a substantial increase in work visas and labor-friendly prevailing wage requirements. A bipartisan group of eight senators has been working toward a deal, and a bipartisan group of eight House members is also in on the act. So what’s the holdup?

The basic problem is beautifully illustrated by two little controversies, one sparked by liberals and the other by conservatives. On the left, there is a widely held belief that U.S. immigration laws are far too stringent, and that we’re not doing enough to help low-income immigrants become citizens. On the right, there is an equally common conviction that U.S. immigration laws should not, as a general rule, have the effect of expanding the number of people who depend on means-tested government benefits to maintain a decent standard of living.

In a recent New York Times op-ed piece, Rahm Emanuel, the blustery mayor of Chicago and Obama’s former chief of staff, and Luis V. Gutierrez, an Illinois congressman who represents a large share of Chicago’s Latino population, argue that, in order to apply for citizenship, Citizenship and Immigration Services is charging immigrants too steep a price – $680, including a fee for fingerprinting. Emanuel and Gutierrez observe that as the fee has increased over the past decade the number of lawful permanent residents who apply for citizenship has declined. They neglect the possibility that other factors could be at play.

As Princeton University sociologist Douglas Massey and former Mexican Foreign Minister Jorge G. Castaneda have observed, an average of 29,000 Mexican-born immigrants become citizens each year in the decade before 1996, a number that has surged to 125,000 per year since then. Even if there has been a dip in naturalizations in recent years, the number is still higher than it had been in the years before 1996, when the fees were lower. The chief driver of this post-1996 increase in naturalization rates, according to Massey and Castaneda, is that as Mexican-born immigrants perceived that the political environment was growing more hostile to non-citizens, they chose to react defensively. Specifically, Congress passed legislation in 1996 limiting access to a number of federal benefits to citizens, a signal that immigrants who had been quite content to remain non-citizens ought to naturalize if they wanted to be full members of the American community.

Perhaps a changing political climate has reassured immigrants that they needn’t naturalize to enjoy the benefits of living in the United States. The Obama administration is committed, for example, to extending subsidized health insurance coverage to lawful permanent residents under the Affordable Care Act. And lawful permanent residents who have resided in the United States for five years or more are already eligible for Medicaid, a program that is set to expand dramatically in the years to come. The post-1996 wave of “defensive naturalization” has created a large and growing political constituency that is keen to defend the interests of foreign-born non-citizens, which is in part why the political momentum behind comprehensive immigration reform has been growing. 

Another way of looking at the decline in naturalization rates is that families are weighing the costs and benefits of citizenship and deciding that it’s not worth the trouble. That is, if the $680 fee that Emanuel and Gutierrez write about is too steep a price to pay for naturalization, naturalization is not actually worth $680 to them, possibly because lawful permanent residents have access to many if not most of the federal, state and local benefits, including subsidized health insurance coverage, that are available to citizens. Citizenship confers the right to participate in the U.S. political process, and of course this right is very important to some. But it’s not quite as important to others. Rather than cut the $680 fee, Emanuel and Gutierrez could achieve their stated goal of increasing the naturalization rate by calling for trimming benefits for non-citizens. But doing so would anger the immigrant voters who were part of the post-1996 “defensive naturalization” wave, and so it is a non-starter for Democrats.

Conservatives are less concerned about courting a backlash from immigrant voters and more concerned about dependency. As Byron York recently reported, in August 2012 a group of four Republican senators – Jeff Sessions of Alabama, Orrin Hatch of Utah, Charles Grassley of Iowa, and Pat Roberts of Kansas – wrote a letter to the Department of Homeland Security expressing their dismay about the criteria used to evaluate applicants for legal permanent residence in the U.S. While American consular officers are allowed to consider whether immigration applicants are likely to be eligible for Supplemental Security Income or Temporary Assistance for Needy Families, they are not allowed to consider whether the applicant in question might make use of Medicaid, food stamps and various other means-tested benefits. This is despite the fact that, as York explains, federal law explicitly states that any immigration applicant who “is likely at any time to become a public charge is inadmissible.” Granted, the definition of who is and is not a “public charge” will vary. But among conservatives, at least, including the large number who believe there is a place for a limited safety net, the idea that we ought to admit immigrants who are likely to prove economically self-reliant over those who are not makes intuitive sense. 

While it might seem extremely difficult to reconcile the views of Emanuel and Gutierrez, who want to make it as easy as possible for immigrants earning very low incomes to become citizens, and Sessions and his allies, who want to make it much harder for aspiring immigrants who are likely to earn very low incomes to settle in the U.S. in the first place, there is one idea that might appeal to both sides of the debate. 

In his highly underrated 2010 book, From Immigrants to Americans, Jacob Vigdor, a Duke University economist, proposes an “assimilation bond.” To make his proposal concrete, Vigdor sets the price of the bond at $10,000, but the number could be much lower or higher. The idea is that immigrants would pay a fee of $10,000 to enter the country, yet they would receive substantial reimbursement for meeting various assimilation milestones. Completing an accredited English-language course, for example, would yield a refund of $2,000. Immigrants who speak fluent English on arrival would receive a commensurate discount. Naturalization would also yield a rebate of $2,000. And every year, immigrants who paid the fee would receive a credit against federal income taxes of up to $500 until only $500 is left. Immigrants who work steadily, learn English and naturalize will have paid back almost all of the bond after 11 years.

Vigdor’s proposal elegantly addresses a number of conservative concerns, as it creates a powerful incentive for immigrants to work steadily at jobs that generate at least some income tax liability. It also raises the stakes for immigrants, who will have to make a significant up-front financial commitment to living and working in the U.S. Emanuel and Gutierrez would presumably object to the fact that an expensive assimilation bond would prove a barrier to many low-income immigrants. With this in mind, Vigdor suggests that churches and foundations could sponsor immigrants who lack the necessary funds, and the same could be true of relatives and perhaps even friends and employers. Suffice it to say, an American who has to spend $10,000 to sponsor an immigrant will be far more discerning than one who has to do little more than fill out paperwork and wait. More important, from the perspective of immigration advocates, the Vigdor proposal rids the immigration system of enormous amounts of red tape. Left and right can duke it out over whether the price of the assimilation bond should be set at $10,000 or $20,000 or $5,000. But the basic idea has tremendous potential.

PHOTO: Over 90 immigrants representing over 40 countries take the oath of citizenship during a naturalization ceremony to become new citizens of the U.S. at Boston College in Chestnut Hill, Massachusetts March 21, 2013. REUTERS/Brian Snyder

As the Supreme Court weighed arguments over California’s Proposition 8 and the federal Defense of Marriage Act last week, the cultural and political momentum in favor of same-sex civil marriage was extraordinary. One after another, prominent Democrats who had been reluctant to endorse same-sex civil marriage switched their positions, recognizing that they were in grave danger of being “on the wrong side of history” (a phrase we’re hearing a lot lately). Some of the reversals have been surprising only because they’ve come so late, as in the case of Hillary Clinton. Others, like Senators Jon Tester and Kay Hagan, were surprising because they represent states, Montana and North Carolina, where same-sex unions aren’t recognized.

But this rush among politicians, including a small but growing number of Republicans, to back same-sex civil marriage won’t settle the issue. Assuming the Supreme Court doesn’t decide to invalidate the laws of the 37 states that limit civil marriage to opposite-sex couples, 31 of which have constitutional amendments to that effect, this debate will go on for many years. And we’re already starting to see the contours of what comes next ‑ a battle between those fighting to return cultural values to what they were before the sexual revolution, and those convinced that there is no turning back.

A number of conservatives, myself included, have argued that the right needs to shift from opposing same-sex civil marriage to focusing on the broader erosion of marriage, particularly among working- and middle-class Americans. Over the past half-century the share of 18- to 29-year-olds who are married has fallen from 60 percent to 20 percent. This wouldn’t be much of a problem if young adults were delaying child-rearing until after marriage, as is true among college-educated Americans. But the out-of-wedlock birthrate now stands at 41 percent. By changing the subject from fighting same-sex civil marriage to strengthening marriage for all families, conservatives who believe that stable marriages are crucial for child-rearing and economic advancement can form alliances across the political and cultural spectrum. Although this argument has gained at least some currency among younger conservatives, who’ve been raised in a culture that takes gay equality as a given, it is far from becoming the conservative conventional wisdom. If anything, opponents of same-sex civil marriage see this “call for a truce” as a reflection of a basic misunderstanding about the real meaning of marriage.

The central argument against same-sex civil marriage, as advanced by socially conservative scholars like Ryan Anderson, Robert George and Sherif Girgis, is that real marriage is a permanent and exclusive union that is inherently oriented toward the bearing and rearing of children. This connection to the rearing of children is why most opponents of same-sex civil marriage believe the state has an interest in regulating marriage but no obligation to extend it beyond opposite-sex unions. According to this view, the larger cultural changes that have made it optional to have kids, and that have made marriage less permanent and less exclusive, have badly undermined the health of marriage as an institution.

Yet as these cultural changes have become more pervasive, the exclusion of same-sex couples from marriage has come to be seen as irrational and bigoted. Same-sex couples are considered the same in all meaningful respects as opposite-sex couples, or at least infertile opposite-sex couples that can’t independently bear children. The goal of opponents of same-sex civil marriage is to restore the cultural centrality of the conjugal view of marriage.

But the debate over same-sex civil marriage has revealed that few Americans understand marriage in this way. Instead, most embrace what Anderson and his colleagues call the revisionist view, in which marriage is seen as a union of two people who commit to each other, and in which the terms of sexual intimacy are up to the couple in question. Under this framework, the state’s interest in regulating marriage is not so much about the bearing and rearing of children as it is about stabilizing romantic partnerships. Conservatives like myself who call for a marriage truce largely accept this revisionist take. 

Many opponents of same-sex civil marriage, particularly those rooted in a strong religious tradition, take the very long view. That is, they maintain that while the revisionist view of marriage may have triumphed, it won’t last. Society can eventually reset, and return to the idea that marriage is about forming durable biological families. Subscribing to that view implies that an opponent of same-sex civil marriage is willing to make the case against it even if it means being called a bigot. Suffice it to say, this is very much at odds with the view of conservatives calling for a marriage truce.

The other key controversy that will arise as the momentum for same-sex civil marriage continues to build is over religious freedom. Religious opponents of same-sex unions are increasingly concerned that religious institutions might find themselves running afoul of anti-discrimination laws, particularly those that provide social services for nonbelievers. Religious institutions that limit their services to members of a particular religious community are generally given a wide berth to offer services as they see fit. But religious institutions that serve the public without respect to religious affiliation, including large national organizations like Catholic Charities USA, aren’t always given the same leeway. One practical issue might be that a church that rents out its facilities for weddings might not be allowed to refuse to serve same-sex couples unless it rents out its facilities only to congregants. Erick Erickson, the conservative activist and editor-in-chief of RedState.com*, recently argued that while Christians should continue to fight against same-sex civil marriage, they must devote more time and attention to establishing legal protections for religious objectors.

What remains to be seen is how the emerging pro-same-sex-marriage majority will interpret these efforts ‑ as a legitimate defense of religious freedom or as a shield for rank bigotry? My own view is that religious institutions should be given a wide berth, and that conservatives on both sides of the same-sex marriage divide should make an effort to build a broad and inclusive coalition on this issue. But given the speed with which the politics of same-sex unions has been transforming, there is no guarantee that such an effort will work.

CORRECTION 3:40 p.m.: This column originally misstated Erick Erickson’s title. He is the editor-in-chief of RedState.com.

PHOTO: Anti-gay marriage protesters march in front of the U.S. Supreme Court in Washington, March 26, 2013. The Supreme Court convened on Tuesday to hear arguments for and against a right to marriage for gay and lesbian couples, beginning two days of what is set to be a historic debate. REUTERS/Jonathan Ernst

The architects of the ACA believed the exchanges would be one of the more politically attractive aspects of the law, as they were designed to give states considerable latitude and to harness the power of market competition. But 34 states, representing two-thirds of the U.S. population, have thus far refused to establish their own exchanges, and the federal government is scrambling to create its own exchanges in the states that have refused to play ball.

Defenders of the ACA have noted the irony that conservatives, who tend to champion state autonomy, have led the opposition to the creation of state-based insurance exchanges. Yet as Douglas Holtz-Eakin of the American Action Forum, a leading critic of the ACA, has observed, the state-based insurance exchanges are best understood as “a second Medicaid program,” which will likely suffer from the same misaligned incentives as its more familiar cousin. While the federal government will cover the entire cost of the subsidies designed to make the insurance plans offered on the exchange affordable, state governments will be free to impose regulations and mandates on insurance plans that could raise their cost. State lawmakers might want to reward medical providers by deeming that various expensive and non-essential medical treatments must be covered by insurance, but state governments will be under no obligation to bear the cost of having done so.

Even without the exchanges, state governments are notorious for imposing costly regulations that have crippled health-insurance markets, as John Cogan, Glenn Hubbard and Daniel Kessler note in Healthy, Wealthy, and Wise. Many states, for example, impose “any-willing-provider” laws that require health insurers to reimburse any medical provider willing to abide by their terms and conditions. This requirement makes it much harder for insurance plans to form efficient provider networks that can compete against others by offering less-expensive, higher-quality care.

Given the strong tendency of state lawmakers to impose onerous regulations, it is fair to ask how the United States can have a functioning private insurance market at all. The reason is that self-insured employer-sponsored health insurance plans are largely exempt from state regulations under the Employee Retirement Income Security Act of 1974 (ERISA). This is a boon to large employers that operate across state lines, and it keeps employer-sponsored insurance relatively affordable, certainly when compared to the state-regulated individual and small-group health-insurance market.

Rather than have the federal government build state-based exchanges governed by state insurance regulations, Congress should consider building a national health exchange. Insurance plans sold on the national health exchange would have to be certified by the federal government, just as employer-sponsored health insurance plans offered under ERISA have to meet certain minimum requirements, but regulations and mandates would be kept to a minimum. Whereas families purchasing insurance on state-based exchanges would have to change their policy on moving to another state, a national health exchange would make health insurance truly portable, thus removing a significant burden. And while Congress might eventually mimic state legislatures by imposing expensive regulations and mandates, it would have to bear the cost of the higher subsidies that would be required to keep insurance plans affordable. This is a powerful built-in accountability mechanism.

Conservatives tend to oppose the idea of a national insurance market along these lines in favor of allowing individuals to purchase insurance plans across state boundaries. It is easy to imagine consumers flocking to cheap insurance plans regulated by a lax state, just as many U.S. business enterprises incorporate in Delaware. Yet as Cogan, Hubbard and Kessler suggest, the potential downside to this approach for health insurance is that the states in question won’t be able to safeguard the interests of consumers living in other states, and they’ll have weak political incentives to do so.

There is another obvious conservative objection to building a federal health exchange, which is that it centralizes power in Washington, D.C. That is a fair criticism. It’s not clear, however, that it makes sense to centralize the responsibility for paying for health-insurance subsidies while decentralizing the responsibility for regulating health-insurance markets. So we can either require that state governments will pick up the full cost of health-insurance subsidies, a deal virtually all state governments would reject, or we can suck it up and accept that a federal health exchange is better than a fiscal train wreck.

None of this is to suggest that conservatives shouldn’t continue working toward the repeal of the Affordable Care Act. But even if the ACA is successfully repealed ‑ a big if ‑ state regulation of health-insurance markets will continue to exacerbate cost growth and make it impossible for families to keep their health plans as they move from one state to another. Although there are many things the states are better-positioned to do than the federal government ‑ educating children, providing social services to the poor and building and maintain infrastructure, to name just a few ‑ regulating health insurance is not one of them.

PHOTO: Medical equipment sits in labelled bins inside of the doctor’s office of One Medical Group in New York March 17, 2010.  REUTERS/Lucas Jackson

The Republicans, led by House Budget Committee Chairman Paul Ryan, aim to shave $4.6 trillion off of the federal government’s spending trajectory. They get there primarily by reducing the growth rate of domestic social programs like Medicaid and rolling back the coverage-expanding provisions of the Affordable Care Act. Although the Ryan budget accepts the revenue increases that were part of the fiscal cliff deal and the Affordable Care Act, it does not allow for any further revenue increases.

The Democrats, led by Senate Budget Committee Chairwoman Patty Murray, aim to reduce spending by $975 billion. Yet they also call for $100 billion in new stimulus spending and shutting off the $1.2 trillion in automatic spending cuts scheduled to take place under sequestration, which suggests that spending reductions will be more than balanced by spending increases. And while the Ryan budget resists revenue increases, the Murray budget calls for $975 billion in revenue from unspecified cuts to loopholes and spending in the tax code.

Beneath the surface of these two budgets lie coalition politics. The Ryan budget, for example, delays its major Medicare reforms until today’s 55-year-olds reach retirement age. It also leaves Social Security largely untouched. One way to look at this is as a concession to the political reality that older Americans tend to support Republicans, and so reforms that reduce benefits for older Americans will be met with strong intra-party resistance. At the same time, the main beneficiaries of Medicaid expansion are low-income adults who are not, as a rule, inside the GOP tent. Conservatives generally believe that smaller government is better for everyone, including the poor. Yet conservative politicians have more to fear from voters who rely on Social Security and Medicare than from voters who rely on Medicaid, which explains their reluctance to make deep cuts in old-age social programs and their willingness to make cuts in programs that tend to benefit the young.

The Murray budget, in contrast, tries to unite a very different coalition. Democrats represent low-income adults who rely on programs like Medicaid; unionized public employees and health-sector workers who rely on federal spending to make a living; students and educators who count on higher education subsidies; and college-educated professionals who favor tax increases on people richer than themselves. This unwieldy coalition makes it very difficult to cut spending. There is a strong intellectual case that Democrats should embrace a single-payer system like Canada’s to shrink health costs, thus allowing the federal government to spend more on, say, green energy investments. But for every left-of-center Democrat who likes the idea, there is a Democrat who represents hospitals and insurers who does not. And though Democrats are far more open to tax increases than Republicans, they have backed themselves into a position in which they can only raise taxes on, at best, the top 2 percent of earners.

Between these two budgets lies a potentially attractive middle ground, and the interesting question is which party will get there first. It has become commonplace to argue that Republicans are constrained by a highly ideological conservative base that will brook no compromise on taxes or spending. And there is something to that. But the tensions within the Democratic coalition mean that Democratic politicians will have an even harder time embracing root-and-branch spending reforms. By offering a fiscally sustainable path to universal coverage and a better deal for middle-income parents, conservative reformers have a shot at breaking America’s political stalemate.

The first step would be for Republicans to rally around James Capretta’s market-based alternative to the Affordable Care Act. Like Ryan, Capretta starts out by repealing most of the ACA. But he also reforms the tax treatment of health insurance to curb the benefits for the highest earners while creating a refundable tax credit for individuals without access to job-based coverage. He also overhauls the Medicaid program by giving state governments a fixed amount of money per Medicaid beneficiary that they can combine with the refundable tax credit to buy coverage for low-income residents. To broaden insurance coverage as much as possible, Capretta proposes that states provide default insurance options for individuals who don’t actively use their tax credit to purchase coverage. Capretta’s path to universal coverage wouldn’t be free, but he argues that it would cost a fifth or less of what the coverage provisions of the Affordable Care Act are expected per year.

The second step would be for Republicans to call Patty Murray’s bluff on taxes. Murray is right to believe that cutting tax expenditures on high earners could generate a great deal of revenue. Diane Lim of the Pew Charitable Trusts recently observed that capping the total dollar value of itemized deductions at $17,000 would raise $1.6 trillion in revenue over the next decade. One awkward challenge for Murray, however, is that some of the biggest beneficiaries of the loopholes and unfair spending in the tax code she condemns are two-earner couples living in high-tax jurisdictions like New York, New Jersey and California, a vital part of the Democratic coalition.

With this in mind, Republicans ought to embrace Murray’s call for closing loopholes and cutting unfair tax code spending. But instead of using this new revenue to finance government spending, Republicans should insist it be used to dramatically expand the popular child tax credit. Robert Stein has proposed a $4,000 per child credit that could be used to offset income and payroll taxes, a measure that would increase the disposable income of millions of middle-income families. While Democrats often accuse Republicans of wanting to cut social programs to finance tax cuts for the rich, they’d have a much harder time attacking the GOP for cutting tax breaks for affluent coastal suburbanites to finance tax cuts for middle-income families with kids.

Neither of these ideas is incompatible with Ryan’s broad objectives, and neither threatens the GOP’s core constituencies. Yet they would make it far easier for Republicans to make inroads among the independents and moderates both parties will need to win in 2014 and beyond.

PHOTO: House Budget Committee Chairman Rep. Paul Ryan (R-WI) holds a news conference to unveil the House Republicans’ FY2014 budget resolution in Washington March 12, 2013. REUTERS/Gary Cameron | Senate Budget Committee chair Senator Patty Murray holds up a copy of a federal employees’ Worker Adjustment and Retraining Notification (WARN) at a news conference on Capitol Hill in Washington  February 28, 2013. REUTERS/Larry Downing

Before we turn to the Invisible Foot, let’s think through the prescriptions for growth offered by Democrats and Republicans. President Barack Obama and his Democratic allies often argue that substantial increases in public investment will deliver robust growth. Republicans, in contrast, emphasize the notion that reductions in marginal tax rates will spur growth by increasing the incentives to work and invest. These approaches are obviously far apart, yet they face at least two common obstacles. First, the aging of the population and the high cost of health entitlements severely limit the government’s ability to increase spending or cut taxes. Second, advanced economies have by definition already taken advantage of the most obvious sources of productivity growth and so are forced to innovate to find new sources of productivity growth. And innovation is a trial-and-error process that is far more expensive and arduous than simply following the leader.

So the question of the day isn’t whether we want growth (yes, we want it badly) or whether we can dramatically increase public investment or dramatically cut taxes (neither strategy is in the cards). Rather, it is whether there is anything we can do to make the American economy friendlier to the kind of risk-taking and innovation that will eventually yield productivity gains without breaking the bank.

Enter the invisible foot. Despite sluggish growth, large U.S. business enterprises have fared reasonably well in the post-crisis years. Corporate profits after taxes have hovered around 10 percent of gross domestic product, almost twice as high as they were during the Reagan years. High corporate profits aren’t an intrinsically bad thing. Yet we’d normally expect that they would over time be reduced by competition from new entrants enticed by the prospect of making their own fortunes. This invisible foot of new competition is what drives incumbent firms to either step up their games ‑ a process that often involves burning through stockpiles of cash and shrinking profits ‑ or go out of business.

Unfortunately, this reallocation of resources ‑ from inefficient incumbents to innovative upstarts and the incumbents that manage to keep up with them ‑ stops when incumbent firms succeed in erecting regulatory and legal barriers to shield themselves against competitors, which is why regulatory reform and patent reform are so important. It is also why we ought to take care not to give large incumbents any undue advantages in our tax code.

As it turns out, the U.S. tax code does give large incumbents an enormous advantage over start-ups by subsidizing corporate debt. When businesses want to raise money for operations, they can pour their profits back into the business, they can sell shares or they can borrow. In an ideal world, we’d want business enterprises to make these decisions on the basis of what makes the most sense based on underlying economic conditions. But in the United States, we allow companies to deduct interest expenses from their taxes but not dividends on their stocks. This makes it far cheaper for companies to raise money by borrowing than by selling shares.

One reason this debt bias is a problem is that it leads companies to take on large amounts of debt, which raises the risk that they will go bankrupt. Yet there is another problem: It is much easier for some companies to borrow than for others. Specifically, well-established firms ‑ for example, large incumbents with pricing power that have been around for years ‑ find it much easier to borrow than new, unproven firms with high-growth potential, which have little choice but to rely on selling shares to finance investment. And so the tax-deductibility of interest expenses and not dividends gives the entrenched corporate Goliaths that have the option to borrow a big boost, while doing nothing for the would-be corporate Davids eager to take them on.

With this in mind, Robert Pozen of the Brookings Institution and Harvard Business School and his research associate, Lucas Goodman, have devised an ingenious plan to level the playing field. First, they call for cutting the corporate tax rate from 35 percent to 25 percent. This lower statutory rate will make the U.S. a much more attractive destination for profitable investment projects, particularly since our current corporate tax rate of 35 percent is the highest in the industrialized world. To finance this substantial cut, Pozen and Goodman propose a modest 60 percent to 85 percent cap on the amount of interest companies can deduct from their tax bills, sharply reducing debt bias and keeping the proposal revenue-neutral. Firms that rely heavily on debt would cry foul, and for some the process of reducing debt levels would be painful. Yet start-ups that don’t have the option of raising money by taking on enormous amounts of debt would find themselves at far less of a disadvantage. The end result could be an entrepreneurial renaissance, as lumbering corporate dinosaurs that had used cheap credit to scare off competitors are forced to reckon with innovative new rivals.

And if reducing the debt bias really does encourage start-up activity, the implications for employment levels could be significant. As the economists John Haltiwanger, Ron Jarmin, and Javier Miranda have observed, start-ups and young firms make a substantial direct contribution to creating jobs. Yet they can also make an indirect contribution to job creation by forcing incumbent firms out of their defensive crouch and into a fight to retain and gain market share. Consumers will also stand to benefit from this kick of the invisible foot as competition forces down prices and gives rise to entirely new products and services.

There is obviously no guarantee that reducing the tax code’s debt bias will be a silver bullet for economic growth. But Pozen and Goodman’s plan has enormous upside potential and, if designed with care, wouldn’t add a dime to the deficit. It would be foolish not to give it a try.

PHOTO: Footprints mark a snow-covered field in Warngau January 26, 2012. REUTERS/Michael Dalder