Archive for April, 2011
Two Pinocchios for ‘Biggest Cuts Ever’
The Washington Post‘s Fact Checker column looks at the claim that this week’s budget deal delivers the biggest spending cuts in history:
For instance, during World War II, the federal budget soared from $9.4 billion in 1940 to nearly $93 billion in 1945. Talk about an expansion of government! But then in 1946, the budget was cut to $55 billion. That’s a cut of $37 billion, technically less than the $38.5 billion in cuts reached last week. But it’s also a cut of 40 percent, which means it is 40 times larger than the deal that is routinely described as historic….
There is yet another way to measure these cuts. As little as $15 billion of the cuts are in the domestic nondefense discretionary budget. How do these cuts stack up to the historical record, when adjusted for inflation (2005 dollars)? From 1981 to 1982, this part of the budget fell by $43 billion (this was during President Ronald Reagan’s term, so at the same time, the defense budget went up $30 billion.) This part of the budget also fell about $15 billion — twice — during the Clinton administration. So, again, the current round of cuts are not the biggest even when looked at through this narrow prism.
Fact Checker Glenn Kessler concludes:
The Pinocchio Test
We’re going to give the politicians a pass here. Technically, these appear to be the largest raw-dollar spending cuts in history, and we have not found evidence that either Obama or Boehner has pretended otherwise — at least in public. (Note that Obama and the White House always are clever to insert the word “annual” before the phrase “spending cut.”) At worse, these are one-Pinocchio violations, typical bragging that all of the strum and drang over the budget was worth the effort.
But it is up to the media to provide context to these claims. On that score the media, including (alas) The Washington Post, misled its readers.
Two Pinocchios
(to the media)
Hats off to Glenn Kessler for holding his colleagues to a higher standard than politicians. And note that Chris Edwards and I have also questioned these claims about “the biggest cuts ever.”
Negotiators Wield the Emery Board against Massive Education Waste
Now that details of the please-no-shutdown budget deal are emerging, at least one thing is clear: Republicans caved on education spending. Rather than demand meaningful cuts to the absurd panoply of federal education programs that succeed only at sucking money out of taxpayers’ wallets, GOP negotiators agreed to mere token trims. Quickly adding together the education programs in the list of cuts put out by Republicans, the total comes to only about $1.6 billion, from an FY 2010 Department of Education appropriation of $64.1 billion. That’s a measly two-percent shave.
And Republicans didn’t just surrender on big cuts that any reasonable analysis screams should be made post-haste. They actually handed President Obama additional money and power with $700 million in new funding for Race to the Top, the supposedly one-time “stimulus” program that the President has used to bribe states into adopting, among other things, national curriculum standards.
If the goal of budgeteers is to cut programs that don’t work and are unconstitutional – as it absolutely should be — education is the first area in which they should start swinging the spending axe, or better yet, the chainsaw. But no: Because few in Washington have the political fortitude to eliminate spending done in the name of “education” — think of the children! – all the negotiators took were a couple of half-hearted strokes with a worn down emery board.
This is terrible news on its own, and it sure doesn’t bode well for negotiations yet to come.
“Winning”
I have an op-ed in the Huffington Post today arguing that it’s possible to ensure universal access to education without compelling anyone to support types of instruction that violate their convictions. This eliminates the central objection that the ACLU and ADL have given for their opposition to private school choice. Indeed, if those organizations really care about freedom of conscience, they should prefer the policy solution I outline to the status quo system in which every taxpayer is compelled to support a single government organ of education. Or is there some other reason why the ACLU and ADL oppose liberating American education?
Feel free to chime-in in the comments section on Huff Po.
Arizona Immigration Decision Underlines Need for Fundamental Reform
The legal battle over SB 1070 is far from over, so neither side should cheer or despair. The upshot of the Ninth Circuit’s splintered and highly technical opinion is merely that the district court did not abuse its discretion in enjoining four provisions. The court could not and did not rule on the legislation’s ultimate constitutionality and, of course, SB 1070’s remaining provisions—the ten that weren’t challenged and the two on which Judge Bolton rejected the government’s argument—remain in effect.
But the legal machinations are only half the story. While I personally think that all or almost all of the Arizona law is constitutional, at least as written (abuses in application are always possible), it’s bad policy because it harms the state’s economy and misallocates law enforcement resources. But I also understand the frustration of many state governments, whose citizens are demanding relief from a broken immigration system that Congress has repeatedly failed to fix. Whether it’s stronger enforcement (Arizona) or liberalizing work permits (Utah), states should not be forced into the position of having to enact their own piecemeal immigration solutions while living within a system where the regulation of immigration is a federal responsibility. Congress has dropped the ball in not passing comprehensive immigration reform, despite facing a system that doesn’t work for anyone: not big business or small business, not rich Americans or poor ones, not skilled would-be immigrants or unskilled.
The federalism our Constitution establishes sometimes demands that the federal government act on certain issues. This is such a time and immigration is such an issue.
Happy Tax Freedom Day!
If you are an average American, today is a great day. According to the Tax Foundation, you have finally worked long enough and earned enough money to satisfy the annual tax demands of federal, state, and local governments.
This means you now get to keep any additional income you earn.
That’s the good news. The bad news is that Tax Freedom Day only measures the direct and immediate impact of taxation. It doesn’t measure the overall burden of government. This chart from the Tax Foundation shows that the fiscal burden of government has jumped enormously since the end of the Clinton years.
No, Paul Ryan Really Doesn’t Cut Pentagon Spending
Last week I expressed my disappointment with Paul Ryan’s budget plan, specifically about his unwillingness to cut military spending. Some people think that he does cut spending through his acceptance of Secretary Gates’s $78 in “cuts.” (see, for example, Sen. John Sununu; Sen. Joseph Lieberman, AEI’s Gary Schmitt and Tom Donnelly; and the Heritage Foundation’s Baker Spring).
So either I am wrong, or they are. Let me try to set the record straight.
First, all of Ryan’s other savings — savings which I support — were projected either against the Obama administration’s FY 2012 budget or against the current budget baseline. For example, according to Ryan’s own “Key Facts” his plan “Cuts $6.2 trillion in government spending over the next decade compared to the President’s budget, and $5.8 trillion relative to the current-policy baseline.” With respect to military spending, however, Ryan’s plan basically follows the Obama/Gates budget, proposing to spend a staggering $670.9 billion in FY 2012. The Obama administration’s DoD budget request for FY 2012 — including the Pentagon’s base budget plus overseas contingency operations (OCO) — totals $670.9 billion as well. Of course, that total leaves out national defense spending tucked away in other departments (including nuclear weapons spending in the Department of Energy). Total national defense spending in FY 2012 will top $700 billion. I stand by my earlier assertion that the Pentagon’s budget escapes from Ryan’s budget axe “essentially unscathed.”
Ryan and others claim that military spending has already been cut, hence the decision to embrace this portion of the president’s budget. Sen. Lieberman explained to Bloomberg news, “To a certain extent, Secretary Gates has enabled us at least temporarily to take defense off the table because he has initiated his own round of defense cuts.”
“To a certain extent” is doing a lot of work in that statement. In fact, Gates and Obama do not cut military spending.
First, they don’t claim to do so. These supposed cuts are only “cuts” in Washington-speak. The Pentagon’s base budget under both the Ryan and Obama plans will increase 1 percent in real, inflation-adjusted terms. See the table below, recreated by my colleague Charles Zakaib from the official DoD budget request.
Second, Ryan claims that Gates’s “exhaustive review of the Pentagon’s budget” identified $178 billion in savings. It does nothing of the sort. By Ryan’s own admission, taxpayers will see only $78 billion of these; the other $100 billion are to be “reinvested” elsewhere in the Pentagon. (They’re always “investments” when you’re spending the taxpayers’ money, even when Republicans do it.)
So we’re really talking about $78 billion toward deficit reduction over the next five years, or approximately 2.6 percent of the Pentagon’s base budget (excluding the wars) over that same period. With all due respect, that isn’t a bold plan for reducing the crushing burden of spending and debt; that’s a rounding error.
What’s more, it is highly unlikely that these savings will materialize. Many of these efficiencies involve consolidation of commands — something that Congress has already balked at — and unspecified savings that are relatively easy to identify, but extremely difficult to implement.
But if, by some miracle, Robert Gates’s successor(s) manage to get them passed by Congress, those savings won’t actually be dedicated to deficit reduction: they will be completely devoured by spending on the wars. This is the greatest sham of all. Charles Knight at the Project on Defense Alternatives (and a key contributor to the Sustainable Defense Task Force, of which I was also a member) explains:
For several years now White House budget projections have included a “placeholder for outyear overseas contingency operations” most of which are accounted for by the wars in Iraq and Afghanistan. This placeholder number has been and remains $50 billion. Every year actual OCO (overseas contingency operations) spending turns out to be several times that number. FY11′s OCO is $159 billion and FY12′s is $118 billion.
Adjusting for the effect of the new OCO for FY12, the $68 billion budgeted above the placeholder of $50 billion eats up most of the $78 billion in Pentagon cuts that Secretary Gates offered up in January to fiscal responsibility….The remaining $8 billion (and much more) will go to the war budgets when reality collides with placeholder projections.
On 14 February Pentagon Comptroller Hale confirmed that the $50 billion placeholders for FY13 and beyond was the “best we can do.” Others make an attempt to be more realistic. The high tech industry association called Tech America annually projects DoD budgets for ten years out. In their 2010 projection they estimate that OCO spending will be $102 billion in FY13, $69 billion in FY14 and $57 billion in FY15. When we subtract the $50 billion placeholder for each of those years and total the remainder we find that the Pentagon is likely to spend $78 billion more in the years FY13 through FY15 than in the White House budget projections.
I hope that I’m proved wrong. I hope that the wars in Iraq and Afghanistan are brought to a close. I hope that the Congress gets serious about tackling Pentagon waste, and stops treating the military budget as an elaborate jobs program. I hope that our brave men and women in uniform get the hardware, equipment, and training that they need, and that Americans get the “defense budget” that they deserve. But if past history is any guide, the Pentagon’s budget will continue to climb, other countries around the world will continue to free ride on Uncle Sam’s largesse, and U.S. taxpayers will be left to foot the bill.
Michelle Rhee and Eva Moskowitz on School Choice
Rhee, the former chancellor of DC Public Schools, and Moskowitz, head of a NYC charter school, were asked at an event last week what they thought of the Supreme Court decision upholding Arizona’s K-12 scholarship donation tax credit program. The program offers a dollar-for-dollar tax cut to anyone who donates to a non-profit Scholarship Tuition Organization (and the STOs then help families pay for private school tuition).
Children’s Scholarship Fund president Darla Romfo asked the question, and here’s the answer she received.
Political Trends and Gun Control Politics
From today’s Washington Post:
During his campaign, Obama supported reintroducing the lapsed assault weapon ban, promised to eliminate an amendment requiring the FBI to destroy records of gun buyers’ background checks and advocated closing the gun-show loophole. Since taking office, the president has done none of that, and before the midterm elections, he shelved a proposal requiring gun dealers to report bulk sales of high-powered semiautomatic rifles. In his State of the Union address, just weeks after the Giffords shooting in January, Obama made no mention of guns. … Other leading Democrats, even those traditionally willing to offer full-throated support for gun-control efforts, have grown surprisingly less vocal as they take on more of a national role.
The Dems have lost enthusiasm for gun control. No question. But seems to me that media interest is also a big factor here. When the news media turned from Gabrielle Giffords to Libya, that’s where Obama went next.
Tuesday Links
- A bombing campaign by either Israel or the United States would rally the Iranian people to support an otherwise unpopular and incompetent regime.
- What else will it take to rally the so-called fiscal hawks to the cause of reducing spending, balancing the budget, and averting national bankruptcy?
- Senator Franken’s Pay for War Resolution is a superficially a step in the right direction; but when it comes to war, the Senate could probably easily rally a 60-vote supermajority to override any offset requirements.
- It should be easy to rally around Paul Ryan’s Medicare choice plan, since seniors will lose benefits in the long run anyway.
- Tax reform proposals are rallying back on both sides of the aisle–will any of them stick?
It’s Bigger Than the Budget
Today POLITICO Arena asks:
Do the cuts (and increases) contained in the six-month spending bill House Republicans posted overnight make sense, and do they go far enough in attacking the deficit and national debt?
My response:
Today’s Arena question captures perfectly what’s missing from our current budget debate. In listing a few of the compromises contained in the six-month spending bill House Republicans posted overnight, and asking whether those cuts (and increases) go far enough in attacking the deficit and national debt, it invites us to imagine that America is one big family, arguing over how “we” should spend “our” money.
We’re not. As I wrote in last Thursday’s Wall Street Journal, we’re a constitutional republic, populated by discrete individuals, each with our own interests. Today’s question, perfectly understandable in the current climate, socializes us. The Framers’ Constitution freed us, to make our own individual choices.
To be sure, we have to start where we are today. But if that’s as far as we go, we’re doomed to never grasping the real problem. The Constitution was written precisely to check our appetite for “public goods.” It authorizes only a few, truly public goods. Not health care. Not education. Not most of what we spend “our” money on today. We’ve ignored the discipline it imposes, and we’re paying the price.
Congress: The Least Dangerous Branch
That’s the topic of my Washington Examiner column this week. In it, I discuss last week’s budget battle and the failure of “policy riders” designed to rein in the Obama EPA’s attempts to regulate greenhouse gases without a congressional vote specifically authorizing it. The Obama team believes it has the authority to implement comprehensive climate change regulation, Congress be damned. Worse still, under current constitutional law–which has little to do with the actual Constitution–they’re probably right. Thanks to overbroad congressional delegation, “the Imperial Presidency Comes in Green, Too.” At home and abroad, the legislative branch sits on the sidelines as the executive state makes the law and wages war, despite the fact that “all legislative powers” the Constitution grants are vested in Congress, among them the power “to declare War.”
Yet, as I point out in the column, Congress retains every power the Constitution gave it–powers broad enough that talk of “co-equal branches” is a misnomer. Excerpt:
The constitutional scholar Charles Black once commented, “My classes think I am trying to be funny when I say that, by simple majorities,” Congress could shrink the White House staff to one secretary, and that, with a two-thirds vote, “Congress could put the White House up at auction.” (I sometimes find myself wishing they would.)
But Professor Black wasn’t trying to be funny: it’s in Congress’s power to do that. And if Congress can sell the White House, surely it can defund an illegal war and rein in a runaway bureaucracy.
If they don’t, it’s because they like the current system. And why wouldn’t they? It lets them take credit for passing high-minded, vaguely worded statutes, and take it again by railing against the bureaucracy when it imposes costs in the course of deciding what those statutes mean.
Last year, in the journal White House Studies [.pdf], I explored some of the reasons we’ve drifted so far from the original design:
Federalist 51 envisions a constitutional balance of power reinforced by the connection
between “the interests of the man and the constitutional rights of the place.” Yet, as NYU‘s Daryl Levinson notes, ―beyond the vague suggestion of a psychological identification between official and institution, Madison failed to offer any mechanism by which this connection would take hold…. for most members, the psychological identification with party appears greatly to outweigh loyalty to the institution. Levinson notes that when one party holds both branches, presidential vetoes greatly decrease, and delegation skyrockets. Under unified government, “the shared policy goals of, or common sources of political reward for, officials in the legislative and executive branches create cross-cutting, cooperative political dynamics rather than conflictual ones.”
Individual presidents have every reason to protect and expand their power; but individual senators and representatives lack similar incentive to defend Congress’s constitutional prerogatives. “Congress” is an abstraction. Congressmen are not, and their most basic interest is getting reelected. Ceding power can be a means toward that end: it allows members to have their cake and eat it too. They can let the president launch a war, reserving the right to criticize him if things go badly. And they can take credit for passing high-minded, vaguely worded statutes, and take it again by railing against the executive-branch bureaucracy when it imposes costs in the course of deciding what those statutes mean.
In David Schoenbrod’s metaphor, modern American governance is a “shell game,” with We the People as the rubes. That game will go on unless and until the voters start holding Congress accountable for dodging responsibility.
Farm Subsidies to be Cut?
It’s shaping up to being another good year for farm incomes. As a result, policymakers looking for spending cuts are finally turning an eye toward farm subsidies. An emerging target is the $5 billion in annual payments made to farmers…for basically just being farmers.
From the Wall Street Journal:
With the farm economy booming and Washington on a diet, a program set up in the 1990s that cuts checks to farmers could be trimmed or eliminated next year when Congress writes a new five-year farm bill.
A group of conservative lawmakers has set its sights on these direct payments, and even farm-state Democrats who like the program say high crop prices make the outlays of about $5 billion a year harder to justify. Recently, the National Corn Growers Association, an industry lobby group, urged Congress to revamp the program, fearing it would be eliminated altogether.
As the Journal notes, the 1996 farm bill created these payments as a temporary handout to help “transition” farmers toward greater reliance on supply and demand. Instead, Congress and the Bush administration turned it into a permanent handout in 2002. If ever there was a symbol of Washington’s inability to get farmers off the taxpayer teat, this was it.
However, even the corn lobby seems to recognize that the gig might finally be up for one of Washington’s more indefensible programs:
‘Our members of Congress are telling us that they just can’t support this program anymore,’ said Anthony Bush, a policy expert with the National Corn Growers Association.
‘In times of record-high prices [the government is] still handing out money like this, it’s just politically not possible, feasible or popular these days,’ he said.
Mr. Bush said corn farmers have the most to lose if direct payments are eliminated altogether. He said $2.1 billion of the roughly $5 billion in direct payments go to such farmers.
Corn futures Wednesday settled at $7.63 a bushel, down slightly after reaching an all-time high above $7.70 Tuesday. Prices have more than doubled since last summer on strong export demand, record ethanol output and steady buying by domestic livestock producers.
The National Corn Growers Association voted earlier this month to ‘investigate transitioning direct payments’ into a more politically acceptable form of subsidy.
“Investigate transitioning direct payments”? That’s ironic terminology considering that these payments were originally intended to transition farmers away from reliance on taxpayers. Now the corn lobby wants to transition the transition payments into a “more politically acceptable” handout. Only in Washington.
See this Cato essay for more on farm subsidies.
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