Looking for Serious Program Terminations
The House passed a bill last week eliminating the Presidential Election Campaign Fund, which the Tax Foundation calls a “voluntary tax that stirs little enthusiasm.” It would also save a whopping $14 million by eliminating the Election Action Committee and transferring certain functions to other federal agencies.
The Republican-sponsored bill passed on a straight party-line vote with the exception of Rep. Walter Jones’ (R-NC) no vote. Eliminating the fund would result in the transfer of $200 million to the U.S. Treasury for deficit reduction. From a fiscal standpoint, $200 million in deficit reduction isn’t even worthy of a yawn. And based on press reports, floor debate centered on whether Republicans were really just trying to disenfranchise Democratic voters. Seriously, didn’t the GOP leadership have anything more substantial to bring to the floor?
I went looking for bills introduced in the House that would eliminate programs. The conservative Republican Study Committee’s Sunset Caucus has a list of bills sponsored by their members that would cut spending (see here). Although there are some worthy bills that the GOP leadership ought to at least get to the floor, I wasn’t overwhelmed by the offerings.
One that did look particularly good is a bill from Rep. Duncan Hunter (R-CA) that would “eliminate ineffective and unnecessary federal education programs.” I’d say that describes the entire Department of Education. However, as soon as I saw the bill’s title – The Setting New Priorities in Education Spending Act – I immediately knew that it would be a joke. Sure enough, the Congressional Budget Office’s scoring of the bill shows that I was, unfortunately, correct:
H.R. 1891 would amend the Elementary and Secondary Education act of 1965 to eliminate more than 40 discretionary grant programs. For 2011, the Department of Education allocated $413 million in funding from amounts appropriated in the Department of Defense and Full-Year Continuing Appropriations Act, 2011 (P.L. 112-10) to programs that would be eliminated by H.R. 1891. Under current law, however, the funds allocated to those programs may be used for other grant programs that would not be eliminated by the bill.
Because annual appropriations to the Department of Education can be used for other programs, enacting the bill would not have a significant effect on spending from the appropriation provided for 2011. Furthermore, the authorizations for all of the programs specified in the bill have expired, so CBO estimates the bill would have no impact on such authorization levels. However, savings would accrue – as compared to 2011 appropriations levels – if the total amounts provided in 2012 and subsequent years are lower than the current-year funding for the department.
Note to Duncan Hunter: Why bother?
Washington Post Asks for Budget Plans
The Washington Post’s editorial board issued a challenge to the president and his Republican opponents: “show us your plans” for deficit reduction. In fact, the Post says it would be “delighted” to receive plans from its readers. However, the Post isn’t interested in “meaningless promises” to cut “waste, fraud, and abuse”—it wants specifics:
Here’s what we’re not looking for: pablum about eliminating unnecessary spending without identifying where. Gauzy rhetoric about making hard choices without making them. Meaningless promises about eliminating waste, fraud and abuse. Broad assertions about where to find the money — “Medicare savings,” “tax reform” — without specifics. Arbitrary spending caps without accompanying details about how those limits are to be met. If you believe, for example, that federal spending should be kept to a specific share of the economy — 18 percent? 20 percent? — show the plausible path to getting there.
Amen. Chris Edwards and I have been beating the drum for Republican policymakers in particular to get specific about what they would cut. Chris recently noted that with the exception of Sen. Tom Coburn (R-OK), Sen. Rand Paul (R-KY), and perhaps a few others, Republicans aren’t putting much effort into identifying programs to terminate. And I have noted that “It’s more common to hear Republicans blubber on about ‘reducing waste, fraud, and abuse’ in government programs and ‘saving’ the pillars of the welfare state (Social Security and Medicare) for ‘future generations.’”
As for deficit reduction ideas from Washington Post readers, we have a balanced budget plan on our Downsizing the Federal Government website. In fact, not only do we have a plan, we have over three dozen essays on numerous government agencies that provide details on what programs to cut and why.
‘Gang of Six’ Plan Is Lousy
My colleague Dan Mitchell discussed the good, the bad, and the ugly in the deficit reduction plan released by the bipartisan group of senators known as the “Gang of Six.” As Dan noted, the plan is more of an outline and a complete assessment isn’t possible until more details emerge. However, the fact that President Obama immediately embraced the plan ought to tell proponents of limited government all they need to know.
Here are some random thoughts on the plan:
- There’s nothing impressive about the “immediate” $500 billion in deficit reduction. That figure includes revenue increases, so it’s not even $500 billion in spending cuts. And I’m not sure why they say “immediate” when they probably mean that the reductions would occur over the next several fiscal years. The deficit alone for next year will probably be at least $1 trillion.
- The plan promises about $2.5 trillion in spending reductions over 10 years. As I’ve been pointing out, $2 trillion in spending cuts isn’t a lot when compared to the $46 trillion the government is projected to spend over the next decade. See this Cato video for more.
- Tax reform is fine; more revenue for the government is not. Transferring more resources from the private sector to the government is a loser for both economic and individual liberty. In addition, the plan’s requirement that tax reform “maintain or improve the progressivity of the tax code” would result in more Americans viewing the federal government’s spending programs as a “free lunch.”
- My anti-tax credentials are beyond question: I equate taxation with theft. But I don’t like debt-financed spending any more than I like tax-financed spending. Had anti-tax advocates and Republicans put the same amount of effort into restraining spending during the Bush/Republican Congress years as they did in cutting taxes, we might not be facing the prospect of a large tax increase today. Unfortunately, I see little evidence that that lesson has been learned.
- The plan does almost nothing to rein in the scope of federal government’s activities. It doesn’t seem to matter which party or ideological faction on Capitol Hill releases a plan — conservatives, moderates, and liberals all apparently assume that the federal government should continue doing everything that it currently does. Generally speaking, Democrats want more tax revenue to maintain an expansive government. Republicans talk about smaller government, but only a handful can articulate exactly what programs or functions they’d eliminate. It’s more common to hear Republicans blubber on about “reducing waste, fraud, and abuse” in government programs and “saving” the pillars of the welfare state (Social Security and Medicare) for “future generations.”
- Our global military presence would make a Roman emperor blush and our Founding Fathers roll over in their graves, but there’s nothing in this plan to suggest that the military-industrial complex faces any threat.
In sum, if you’re hoping that debt reduction will be brought about through a reduction in the federal warfare/welfare state, you’re going to have to wait for a different plan. And the sad truth is that no such plan is going to materialize anytime soon – at least not one that will get through Congress and signed by the president. But look on the bright side – we’re not Greece! Not yet.
Should There Be ‘Shared Sacrifice’?
At the Encyclopedia Britannica blog, I take on the argument made, for instance, by President Obama in his Friday news conference:
We should not be asking sacrifices from middle-class folks who are working hard every day, from the most vulnerable in our society — we should not be asking them to make sacrifices if we’re not asking the most fortunate in our society to make some sacrifices as well.
I call that a fundamentally flawed argument:
The main thing our government does these days, despite the lack of any constitutional authority for it, is tax some people and transfer money to other people. …But there is no moral equivalence in the two sides of the transfer system. On the one hand, the government takes money by force from people who have earned it. On the other hand, it gives some of that money to people who have not earned it. Taking yet more money that people have earned is simply not equivalent to reducing the size of a government transfer.
There is, however, one way that we could ask businesses and the rich to join in the deficit-reduction effort:
But here’s a way to satisfy both those who see spending as the problem and those who want the highest-taxed Americans to pay yet more: Start cutting subsidies to businesses and the rich. Let’s cut out the big-business subsidy machine, the Export-Import Bank. Let’s get rid of farm subsidies. Let’s tell affluent people who build houses in coastal flood areas to pay for their own flood insurance at market prices.
No Profile in Courage Here, Either
Yesterday, speaking at Facebook headquarters, President Obama assessed the guts of Rep. Paul Ryan (R-Wisc.) and other congressional Republicans and concluded that their deficit reduction plan isn’t “particularly courageous.” That might be accurate – their plan lacks specificity and could target a lot more for elimination — but it’s pretty rich for the President to throw out such a conclusion. After all, his whole strategy appears to be the bankruptingly lame-but-safe crying of doom for cute kids and other supposedly defenseless people no matter what the size of the proposed cut to a social program or how ineffective the program has been. That, and the constant lamentation that “the rich” – a small and therefore electorally weak group of voters – don’t pay their fair share. (And the constitutionality of federal programs? That doesn’t even get a mention.)
Representative of this cowardly course is the President’s mantra about “investing” more in education-related programs despite blaring evidence that the programs don’t work or, as is the case with federal student aid, actually make the problem they’re supposed to solve much worse. But the President wants votes — like most politicians, he wants lots of people to think he’s giving them great stuff for free – so he’s not doing the mildly courageous thing and telling people “look, these programs don’t work, we have a titanic debt, and I’m going to cut things that might sound good but aren’t.” No, he’s doing things like going to community colleges and, in front of cheering groups of students, talking about mean Republicans and how he wants to protect students just like them by keeping the federal dollars flowing.
That’s no profile in courage, nor is it a responsible way to deal with the federal government’s gigantic problems.
The Pentagon’s Faux Cuts
President Obama might want it to appear as though he is reining in defense spending with his budget submission for FY 2012, but his approach to the Pentagon’s budget reveals the opposite.
Perhaps the president hopes that his adoption of the faux cuts that Secretary Gates put on the table last month will be seen as responsible. Perhaps he is taking a prudent first step and signaling to the military, and its suppliers and contractors, that the days of double-digit increases are over. That may be; but far deeper cuts are warranted. . If the president had truly wanted to send a signal, he would have followed the advice of his own deficit reduction commission and endorsed far deeper cuts in military spending.
The Department of Defense will spend $78 billion less over the next five years than previous projections. This amounts to a drop in the bucket — technically just over 2% — of total Pentagon spending over that period. Nonetheless, in Washington-ese, this constitutes a cut. But the base budget (excluding the costs of the wars in Iraq and Afghanistan) will increase — from $549 billion to $553 billion, the largest budget in the department’s history. In the past 12 years, the budget that has doubled in real, inflation-adjusted terms.
Deeper cuts should be made along with an effort to lessen worldwide defense commitments, reducing the strain on the force. It will be up to outside pressure — either from Congress or from interested groups outside of government – to force Washington to cease acting as the world’s policeman, and forcing other countries to take responsibility for their own defense.
Budget Follies
Today POLITICO Arena asks:
Is the Obama budget a serious stab at deficit reduction? And do congressional Republicans have any credibility in knocking the budget plan since, other than Sen. Rand Paul (Ky.), they have not detailed many cuts that would seriously slice the deficit?
My response:
It’s Valentine’s Day and love is in the air, especially on Capitol Hill where Congress anxiously awaits the 10:00 a.m. arrival of the president’s FY 2012 budget. It should be well shredded by noon.
And as it is, across the land we’ll be hearing the cries of “Not me, please, not my sinecure” — no more plaintively than from the minions of the Corporation for Public Broadcasting. How will the average Chicago Bears fan endure without the latest BBC soap – excuse me, Masterpiece Theatre production?
But if that should come to pass, woe be unto those CPB congressional supporters who survived the November shellacking, the very ones who brought us to this sorry state by failing, for the first time in our history, to pass a single spending bill. Hell hath no fury like that of an NPR patron scorned.
Tea Party Isn’t Mellowing GOP Militarism
Lindsay Graham isn’t alone when he imagines an emerging “isolationist wing” of the Republican Congress. Pundits have lately both lamented and celebrated the arrival of a Tea Party foreign policy, where deficit fears restrain military adventures and Pentagon spending.
I wish there were such a thing. My op-ed in yesterday’s Philadelphia Inquirer shows that there isn’t. I report there on research that I did (really research that intern Matt Fay did) on support among Republicans in the House and Senate for cutting defense spending and getting out of Afghanistan. I found little.
I also tested the idea that the Tea Party is restraining Republican militarism, by comparing the 101 freshmen that largely claim adherence to that movement to other Republican members. Freshmen are not more dovish than the rest, suggesting that the Tea Party reflects Republican politics more than it guides it. A post I put up yesterday on the National Interest‘s Skeptics blog illustrates this point with charts.
As Tad DeHaven notes, Congressional Republicans, including leaders in both Houses, have increasingly said that they would support defense cuts as part of a deficit reduction package. But those taking that position remain a minority of their party–fifteen percent by a generous accounting, comprising roughly equal fractions of new and old members. And the cuts that the minority of Republican want are likely to be cosmetic, trimming fat and chasing efficiencies, not taming the beast by taking on less missions and cutting force structure. For these reasons, it’s not surprising that the symbolic spending cut resolution up for a House vote Tuesday exempts the nearly two-thirds of domestic spending labeled as “security,” as I discussed in another Skeptics post.
GOP support for indefinite war in Afghanistan is stronger. Only ten Congressional Republicans are obviously against that war, and not one is a Senator or a freshman. That last bit bears repeating: none of the 101 new Republican members of the House and Senate are clearly against the war in Afghanistan.
The difference between new and old Republicans on these issues is that the new members are less likely to have firm positions. They got elected largely without expressing coherent views on defense issues. Since then, many seem to be reading the tea-leaves and keeping quiet about those matters. But they will soon be tied into positions as they justify votes. So the coming months are crucial in determining how a big chunk of Republicans vote for some time.
I am not optimistic that many will side with those of us that would like to vastly scale back our foreign policy. In the Skeptics post I explain why:
The GOP has been in the habit, probably since the 1970s, of out-hawking the Democrats and equating military aggressiveness with support for the military and American virtue. Whether that is winning political strategy I’m not sure (yes in 2004, no in 2008), but it is at least a powerful habit, reinforced by decades of neoconservative warbling, whose authors are now ensconced in the nation’s most prominent op-ed pages and think tanks.
Beyond that, military spending bestows its munificence in many districts, generating bipartisan support. But, on the left, the prospect of spending caps creates countervailing interests. Caps force defenders of other domestic spending to be dovish on defense. Health care’s cost competes with the Navy’s, especially under budget caps. That’s not as issue on the right.
The most important force keeping Republican fond of military adventure, however, is common to Democrats: international opportunity. We have expansive foreign policies because we can. Balancing is weak. The costs of adventurism are few and diffuse. For Europeans alive 100 years ago, foreign policy failures could bring conquest and mass death. Even successful wars would kill many sons and consume a considerable portion of societal wealth. For most Americans, especially since the draft ended, foreign policy disasters bring marginally higher tax rates. Ideologies justifying expansive policies—liberal internationalism on the left, neoconservatism on the right—grow popular because they justify the behavior this structure allows.
Doves say that the United States cannot afford its foreign policy. The problem is that it can, even when recessions make the load a bit harder to bear. Unsustainable things end. The United States can afford to do all sorts of foolish things.
Will the Deficit Compel Congress to Cut Military Spending?
Over at National Journal‘s National Security Experts blog, Megan Scully notes the military spending cuts contained within a proposal by Erskine Bowles and Alan Simpson, the co-chairs of the president’s deficit reduction commission. Scully asks: “How feasible would it be for lawmakers to make these kinds of cuts to defense?…What kind of sway will fiscal hawks have in the next Congress – and will it be enough to push through sweeping defense cuts over the objections from pro-defense members of their party?”
Government spending across the board must be cut, I explain, beginning especially with entitlements. I continue:
Other spending must also be on the table, however, and that includes the roughly 23 percent of the federal budget that goes to the military. This often poses a particular challenge for Republicans given their traditional support for military spending and their professed commitment to fiscal discipline. But it need not be particularly difficult. If Republicans reaffirm that the core function of government, many would say one of the only core functions of government, is defense (strictly speaking), then the path to a politically sustainable and economically sound defense posture is clear: a military geared to defending the United States and its vital national interests, and not permanently deployed as the world’s policeman and armed social worker. Such a posture would allow for a smaller Army and Marine Corps as the wars in Iraq and Afghanistan are drawn to a close (as they should be), deep cuts in the Pentagon’s civilian work force, which has grown dramatically over the past 10 years, and sensible reductions in the nuclear arsenal. More modest cuts are warranted in intelligence and R&D. Finally, significant changes in a number of costly and unnecessary weapons and platforms, including terminating the V-22 Osprey and the Expeditionary Fighting Vehicle, and greater scrutiny of the F-35 program, for example, must also be in the mix….
Serious cuts to military spending… must be part of a broader strategic reset that ends the free-riding of wealthy and stable allies around the world, and that takes a more balanced and objective view of our relative strategic advantages and our enviable security.
You can read the rest of my response here.
The Deficit Commission: A Good Try That Falls Short
My colleagues, Dan Mitchell, Jagadeesh Gokhale, Michael Cannon and Chris Edwards have already provided their thoughts on the chairman’s mark released yesterday by the bipartisan deficit reduction commission. A few additional thoughts:
The commission provides a good-faith look at the magnitude of the problem we face, and the magnitude of cuts necessary to bring spending down to even 21 percent of GDP (and it really should be far lower). In doing so they show just how unserious Republicans are in proposing a paltry $100 billion in spending cuts. And the commission makes it clear, unlike Republicans, that both entitlements and defense spending must be on the table.
The commission also starts the debate in a useful direction by implicitly acknowledging that their need to be some limits to government spending—that government cannot consume an ever-increasing proportion of GDP. (Without a change in policy, the federal government will consume 43 percent of GDP by 2050.)
But ultimately the report falls short because it fails to address the proper role of government. In fact, it tacitly accepts the idea that government should be doing everything it is doing now. It even acquiesces to the new health care law. As a result, it fails to reduce the size of government sufficiently to avoid tax hikes, let alone permit tax cuts in the future.
Moreover, because the commission leaves the basic structure and role of government intact, it raises questions about the future viability of its proposed mix of spending cuts and tax increases. History demonstrates that it is far too likely that tax hikes will be permanent, while spending cuts will last as long as the next year-end emergency appropriations bill.
As the commission moves toward a final report on December 1, members would be advised not to focus just on the details of these proposals, but to have a serious and deliberative discussion of what the federal government should and should not be doing.
What Is a ‘Strong’ Defense?
The good people at the Stimson Center’s Budget Insight blog invited me to contribute a guest post discussing the Sustainable Defense Task Force report Debt, Deficits, & Defense: A Way Forward. Here’s an excerpt:
The most common response [to the report] has been some sympathy for our argument that military spending should be subjected to the same scrutiny that should be applied to other government spending. There are still a fair number of people, however, who share our concern about the deficit, but who counter “But I want a strong defense.”
Who doesn’t?
The task force report was written with a single consideration in mind: in what ways, and where, could we make cuts in military spending that would not undermine U.S. security?
[...]
A leading conservative in the Senate, Tom Coburn (R-OK) wrote that the deficit reduction commission “affords us an opportunity to start some very late due diligence on national defense spending… [as well as] reduce wasteful, unnecessary, and duplicative defense spending that does nothing to make our nation safe.”
Read the rest here.
How to Cut Military Spending
Several months ago, I co-authored an op-ed in Politico with Heather Hurlburt of the National Security Network calling on the White House and Congress to include the Pentagon’s budget in any deficit reduction package.
because our national security rests on our economic health as well as on the strength of our military, a liberal and a libertarian can agree that the Pentagon should no longer get a pass.
That op-ed caught the attention of Congressman Barney Frank. He formed the Sustainable Defense Task Force, an ad hoc advisory panel to assemble a list of possible reductions in military spending that would not undermine essential U.S. security.
Last Friday, the task force presented its findings at a press conference at the Capitol. You can read the full report here [.pdf].
Ben Friedman and I collaborated on the portion of the report that makes the case for a new grand strategy of restraint that would allow for substantial cuts in military spending. Our op-ed in this morning’s Los Angeles Times focuses on one key theme: we spend too much because the U.S. military does too much.
A few excerpts:
The Cold War is over. While we were defending our allies in Europe and Asia, they got wealthy. The new status quo is that we offer them perpetual security subsidies — and risk being drawn into wars that do not serve our security interests.
[...]
By avoiding the occupation of failing states and shedding commitments to defend healthy ones, we could plan for far fewer wars, allowing cuts in force structure, manpower, procurement spending and operational costs. The resulting force would be more elite, less strained and far less expensive.
[...]
Our deficit problem is an opportunity to surrender the pretension that we are the world’s indispensable nation, preventing instability, shaping the international system and guiding history. We should be content to settle for being the big kid on the block that looks out for itself and occasionally helps friends in a bad spot. That approach would take advantage of the security we have, and save money we don’t.
As Cong. Frank explained at the press conference, if cutting defense was easy, we would have done it by now. Defense is a core function of government — any government. That might explain why conservatives, and even some libertarians, are more resistant to Pentagon spending cuts than they are to cuts at the Departments of Agriculture, Commerce, Energy, Education (etc.).
Yet much of what Washington does today isn’t defense, which means that the Pentagon’s budget shouldn’t escape scrutiny. The notion that we should close the budget deficit while leaving the military’s share off the table is untenable.
For one thing, it is a key driver of the enormous growth in government spending over the past decade; inflation-adjusted “national defense” outlays (including the costs of the wars in Iraq and Afghanistan) have grown by 86 percent since 1998.
What’s more, the phrase “national defense” is a misnomer, at worse, misleading, at best. We should ask “Defend whose nation?” Most of what Americans spend on our military today is focused on defending other countries that should defend themselves. Once that reality sinks in — and I think it has already — it shouldn’t be that hard to focus the public’s attention on what we spend on our military, and what we get in return.
For the sake of our fiscal health as well as our physical security, we can and should make responsible reductions in military spending. By drawing down the size of our military, reducing our global footprint, and adopting a more restrained grand strategy, we can achieve a sustainable level of military spending that keeps America safe and strong for a very long time to come.
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