Oberstar Comes to the EDA’s Defense
When Rep. Jim Oberstar (D-MN) lost his bid for reelection in November, it brought to an end a congressional career that spanned nearly a half century. As a former chairman of the House Transportation Committee, Oberstar’s faith in the ability of the federal government to turn taxpayer water into wine was typical for a politician ensconced in the Washington Beltway bubble.
Oberstar reemerged this week to voice his support for legislation reauthorizing the Economic Development Administration, which is still being debated on the Senate floor. In an op-ed written for The Hill, Oberstar says that “It is disheartening to see that the agency I helped create more than 45 years ago which has had constant bipartisan support is now under unwarranted partisan attack in an economic environment when the kinds of jobs this agency helps create are needed more than ever.”
Oberstar says that it is “particularly troubling” that the EDA is receiving scrutiny after being unanimously reauthorized only three years ago. And without specifically naming him, Oberstar takes a shot at Sen. Jim DeMint (R-SC) for turning against the agency after having previously “supported and praised EDA investments in his home state.” Considering how rare it is for a member of Congress to admit to having made a mistake, I’d say that DeMint’s recent admission in the Wall Street Journal that he was wrong to have supported the EDA is refreshing.
DeMint correctly noted that the mistaken rationale behind the EDA’s creation during the Great Society is the same as the Democrat’s $814 billion stimulus bill: government programs can solve economic problems. Indeed, the longer the economic recovery remains sluggish and uncertain, the more the American people are questioning the ability of the federal government to simply turn on the money spigot and make the pain go away. For people like Jim Oberstar, that’s an unsettling development.
Many Americans are starting to understand what my colleagues and I have been repeatedly pointing out: there’s no free lunch when it comes to government programs. As a Cato essay on the Economic Development Administration explains, claims of the benefits from spending only look at half of the equation:
The EDA does create government jobs, and perhaps some private sector jobs, but that is only the visible effect. What is invisible, or ignored by policymakers, are the jobs never created because of the taxes that were raised to pay for EDA programs. Every dollar that the government extracts from the economy to pay for programs destroys more than a dollar of private sector economic activity. Taxation reduces the resources available for private sector job creation, and it also distorts the economy by altering price signals for working, saving, and other productive activities.
Oberstar offers anecdotal evidence of the EDA’s successes and trots out the familiar job creation and private sector leveraging claims often made by the agency’s proponents. For instance, he touts the EDA’s “exclusive mission of creating and retaining American jobs by leveraging private investment in the nation’s economically distressed communities and every dollar that the agency invests leverages another $6.90 in private/public investment to create the economic environment for small business to grow and prosper.”
One of the examples Oberstar cites as an example of an EDA success is support for “Washington State’s growing wine industry which currently employs more than 14,000 people and generates more than $3 billion to the state’s economy.” That’s an odd choice after touting the EDA’s assistance to the “nation’s economically distressed communities.” Besides, why should federal tax-paying winemakers in states other than Washington have to effectively subsidize their competition? And as the Cato essay notes, if the EDA is “generating real returns” as Oberstar states, then “surely local entrepreneurs and venture capitalists would be interested in funding such projects without government help.”
Finally, Oberstar singles out Cato for citing “three decade old GAO reports” in our criticism of the EDA. Actually, Cato’s essay on the EDA cites reports going back three decades.
DeMint on the Economic Development Administration
Last week, I wrote about reauthorization of the Economic Development Administration, which is currently being debated on the Senate floor. Sen. Jim DeMint (R-SC) wrote an op-ed in today’s Wall Street Journal that cites Cato’s work on the EDA.
DeMint correctly notes that the mistaken rationale behind the EDA’s creation during the Great Society is the same as the Obama administration’s $814 billion stimulus bill: government programs can solve economic problems. Instead, both have been massive wastes of taxpayer money.
After doing an able job of listing some of the EDA’s faults — and acknowledging that he was wrong to have supported the program in the past — DeMint concludes that members of Congress should be “actively finding ways to reduce spending” given the mounting debt problem. He’s absolutely right, although the EDA should be abolished even if the federal budget were in surplus.
Republicans in particular need to put more effort into targeting specific agencies and programs for termination instead of, say, just issuing constant press releases complaining about the Senate Democrats’ lack of a budget proposal. Note that the EDA reauthorization bill passed out of the Senate Environment & Public Works Committee on a voice vote. That means that all of the committee’s Republicans went along with it. See here for a list of the EPW committee’s members.
Will Obama Comply with the War Powers Resolution?
Six Republican senators are challenging President Obama’s authority to conduct an open-ended war in Libya without congressional authorization. The six conservative lawmakers (Rand Paul (R-KY), Jim DeMint (R-SC), Mike Lee (R-UT), Ron Johnson (R-WI), Tom Coburn (R-OK), and John Cornyn (R-TX)) sent a letter to the president on May 18th asking if he intends to comply with the War Powers Resolution. The full text of the letter can be found here.
The law stipulates that the president must terminate military operations within 60 days, unless Congress explicitly authorizes the action, or grants an extension. The clock on the Libya operation started ticking on March 21, 2011. Congress has neither formally approved of the mission, nor has it granted an extension. Therefore, the 60-day limit expires tomorrow, May 20th.
Last week at The Skeptics, I noted Deputy Secretary of State James Steinberg’s testimony before the Senate Foreign Relations Committee, in which he suggested that the administration wanted to comply, but was consulting with Congress about how to do so. The New York Times presented some of the creative ideas that the administration was considering in order to adhere to circumvent the law. But the senators can read the Times, too. In their letter to the president, they write:
Last week some in your Administration indicated use of the United States Armed Forces will continue indefinitely, while others said you would act in a manner consistent with the War Powers Resolution. Therefore, we are writing to ask whether you intend to comply with the requirements of the War Powers Resolution. We await your response.
Let me be clear about one thing: I’m not a huge fan of the War Powers Resolution, per se. To me, it is silly, sort of like a law that affirmed the Congress’s authority to levy taxes, borrow and coin money, and establish Post Offices. In the same section where these powers are delegated, the Constitution clearly stipulates that Congress shall have the power to declare war. So why does there also need to be legislation?
Most presidents have complied with the spirit of the War Powers Resolution, but more out of deference to the notion that Congress has some role in whether the United States goes to war, not out of genuine conviction that Congress does/should have the most important role in deciding such things. By all appearances, President Obama is bypassing the charade.
I anxiously await his response to the senators’ letter, and am likewise curious to see if other senators raise questions about the administration’s intentions.
Nondefense Discretionary Spending Freezes
When it comes to reining in federal spending, House Republicans and the president have one idea in common: freezing nondefense discretionary spending. That category accounts for about 18 percent of total spending, so let’s see how such a freeze would affect the overall budget.
Today the Congressional Budget Office released updated budget figures and baseline projections of federal spending through fiscal 2021. Projecting the budgetary future is obviously an inexact science, and the CBO’s baseline reflects unrealistic assumptions. However, it does allow us to get an idea of the impact of a nondefense discretionary freeze on total federal spending.
Three proposals have been put forward:
- In his State of the Union address, President Obama proposed freezing nondefense discretionary spending for five years, beginning in fiscal 2012, at fiscal 2010 levels.
- The conservative House Republican Study Committee and Sen. Jim DeMint (R-SC) recently proposed freezing nondefense discretionary spending for ten years, beginning in fiscal 2012, at fiscal 2006 levels.
- Ever since the release of its “Pledge to America,” the House Republican leadership has been talking about returning spending to fiscal 2008 levels. They apparently have non-security discretionary spending in mind, which is an even smaller category than nondefense discretionary. It’s not clear if they intend to freeze it at the new lower level.
Using the CBO’s latest figures, I calculated baseline spending from fiscal 2012-2021 under ten year freezes in nondefense discretionary spending at fiscal 2006, 2008, and 2010 levels:
Note: To make an apples-to-apples comparison, I extended the proposed Obama freeze at fiscal 2010 levels from five years to ten years, and I assumed a ten year freeze at fiscal 2008 levels for the House Republicans. Also, projected annual interest payments on the debt are excluded. Therefore, the chart refers to “baseline program spending,” which is the sum of nondefense discretionary, defense, and entitlement spending.
The chart makes it excruciatingly clear that freezing nondefense discretionary spending at the levels specified or implied by Republicans and Democrats is only a start toward needed reforms in the federal budget. Congress also needs to cut defense spending, and spending on Social Security, Medicare, Medicaid, and other entitlement programs.
GOP Conservatives Propose Spending Cuts
Last week the conservative House Republican Study Committee released its Spending Reduction Act of 2011, which would cut federal spending by $2.5 trillion over the next ten years. Sen. Jim DeMint (R-SC) will introduce it in the Senate.
The vast majority of the savings, $2.3 trillion, would come from freezing non-defense discretionary spending at fiscal 2006 levels over the next ten years. The rest would come from cutting the federal civilian workforce, privatizing Fannie Mae and Freddie Mac, repealing the state Medicaid FMAP increase, repealing remaining stimulus funds, and immediately reducing non-security discretionary spending to fiscal 2008 levels.
Of the $2.3 trillion over 10 years that would be saved by freezing nondefense discretionary spending at fiscal 2006 levels, only $330 billion in savings are actually specified, or about $33 billion annually. That’s only about 5 percent of nondefense discretionary spending, and nondefense discretionary spending only accounts for about 17 percent of total federal spending.
The RSC targeted an array of small and silly programs such as $17 million in subsidies for the International Fund for Ireland. They would eliminate mohair subsides saving $1 million, but that’s tiny compared to the needed termination of all farm subsidies. And proposing to eliminate “duplicative education programs” is fine, but the Department of Education doesn’t need house cleaning — it needs to be cleaned out.
The plan does include some good cuts that have been proposed at Downsizing Government:
- Amtrak subsidies
- Community Development Fund
- Department of Commerce business subsidies
- High-speed rail subsidies
- Economic Development Administration
- Some transit subsidies
- Some energy subsidies
However, most of the RSC’s savings are generated by a largely amorphous promise to keep domestic spending flat for years to come at 2006 levels. Unfortunately, this evades the needed national conversation on closing down major agencies and departments.
Another disappointment with the RSC plan is that there are no proposed cuts for the Department of Defense. That could be a major political error as more and more conservatives have been coming to the conclusion that it needs to be downsized. And by failing to include the Pentagon, any chance of support by congressional Democrats is killed.
A First Test for Republicans
Republicans’ hands have been strengthened by a wave of voter angst about big-spending and business-as-usual in Washington, D.C. But have they landed on their limited-government feet? The first test of that question comes next Tuesday.
That’s when Senate Republicans will likely vote on a proposal to bar themselves from requesting earmarks. Last year, House Republicans adopted that policy for themselves the day after House Democrats limited their earmarking to non-profits and government bodies.
The Senate Republican earmark ban is championed by Tea Party favorite Sen. Jim DeMint (R-S.C.). Its strongest opponent is Minority Leader Mitch McConnell (R-Ky.).
Senator McConnell may have won his race in 2008 thanks to bringing home the bacon, but politics seem to have changed since then. Earmarker extraordinaire Rep. James Oberstar (D-Minn.) was bounced out of his office despite larding his district and state with federal pork.
McConnell’s own state may have changed, too. Witness the election of Rand Paul (without McConnell’s help). Paul supports the earmark ban.
McConnell has framed his opposition to the earmark ban as an argument for preserving Congress’ “discretion”—that is, its authority over the spending of federal dollars. Without earmarks, the administration will decide where the money is spent. But there’s a pretty long list of things McConnell could work for if he wants to defend Congress’ prerogatives, such as:
- Forcing the administration to be transparent about the grants it doles out.
- Limiting or eliminating the administration’s grant-making and spending discretion.
- Withdrawing all the other massive delegations of authority that Congress has given to the executive branch.
- Reducing spending and cutting taxes so that spending discretion is where it should be: with the taxpayers who earned the money in the first place.
Earmarks are not a huge part of the federal budget, but that does not militate against ending them. Senator Tom Coburn (R-Okla.) calls them a “gateway drug to federal spending addiction,” which is a folksy way of talking about the political science of “log-rolling.” Former member of Congress Joe Scarborough (R-Fla.), who has seen it first-hand, talks in this clip about how House and Senate leaders use earmarks to buy votes on legislation they want to get passed.
If earmarks go away as a tool for wheeling-and-dealing in Congress, members and senators will be less likely to sell out the country as a whole with bloated spending bills and Rube-Goldberg regulatory projects for the benefit of some local interest or campaign contributor.
I’ll be speaking next Monday at a Hill event on earmark transparency. The vote in the Senate Republican Conference is Tuesday. It’s a secret ballot, so any senator who doesn’t trumpet his or her support of the earmark ban almost certainly opposes it and supports the practice of earmarking.
Earmarkers Work to Penalize Earmark Opponents
Political gamesmanship has never seen a clearer illustration than in this CQ Politics article, “Locals Split on DeMint’s Earmark War.”
South Carolina Republican senator Jim DeMint opposes earmarks. Fellow South Carolina Republican Lindsey Graham supports earmarks and regularly requests them. (See a list of all 136 of his earmark requests for FY 2010 here.)
Senator Graham’s request for a $400,000 earmark for the Port of Charleston hasn’t been awarded—perhaps because of DeMint’s opposition to earmarks.
Refusing to go along has a price. And in the article it’s a Republican operative who sinks the first shiv, suggesting that DeMint’s failure to earmark hurts South Carolina.
“What you’re hearing [in the state] is: the ideology of the tea party and catering to that movement will come at the expense of jobs in South Carolina,” said Chris Drummond, a South Carolina GOP strategist who formerly worked for Gov. Mark Sanford.
(Think a Republican wouldn’t criticize another Republican? Think again.)
The tax money used for earmarking is paid into the federal kitty by South Carolinians, of course. Getting some of the taxes they pay returned to the state is not the benefit it appears. If their money were left with them in the first place, they would spend it as they see fit, benefitting South Carolinians and their state much more than politically directed spending.
Next, Senate appropriation subcommittee chairman Byron Dorgan (D-ND) exploits the tension among members of his opposite party, clinical analysis masking his glee: ”‘In cases where you have a state where one asks for an earmark, the other opposes all earmarks, that makes it a more difficult project to fund,’ he said.”
Then comes payback time. Senator Robert Bennett (R-UT) was ousted during the primary by a Tea Party/DeMint-favored candidate, so:
The office of subcommittee ranking member Robert F. Bennett (R-Utah) also told the Greenville News that the port was denied funding in part because “there was no request at all from Sen. DeMint.”
The article recites a number of other viewpoints on earmarking and earmarks in South Carolina, but the highlight is the parade of assailants on DeMint. Politics ain’t patty-cake, and earmark politics are no exception.
Co-opting the Anti-Spenders
Voters who recognize the need to make major cuts to federal spending and think returning Republicans to power will accomplish this feat could be in for a big disappointment. Recent comments to the Washington Post made by former Senate majority leader Trent Lott (R-MS) make it clear that anti-spending candidates elected in November will be fighting against their own party — not just the Democrats.
From the article:
Former Senate majority leader Trent Lott (R-Miss.), now a D.C. lobbyist, warned that a robust bloc of rabble-rousers spells further Senate dysfunction. “We don’t need a lot of Jim DeMint disciples,” Lott said in an interview. “As soon as they get here, we need to co-opt them.”
Lott actually provided one of the more memorable moments in my career as a Senate staffer. The scene took place in the office of Sen. Jeff Sessions (R-AL) at a regular meeting of “conservative” Republican senators to discuss politics and policy. The setting was several months before the 2006 fall elections in which voters sent the Republican majority packing.
Sen. Tom Coburn (R-OK), who I was working for at the time, was pleading with his colleagues to make a last ditch effort to cut spending. Coburn argued, correctly, that voters were fed up with Republican profligacy. In the midst of the discussion, Trent Lott entered. Strolling about the office while chomping on snacks, Lott dismissed Coburn’s suggestion in his good-ole-boy southern style.
Instead, Lott said the Republicans needed to tell voters that putting the Democrats in charge of post-911 America would leave the country vulnerable to terrorist attacks. In other words, Lott’s solution was to scare voters into keeping the Republicans in charge.
Lott might be gone, but the current GOP leadership seems to share the same aversion to actually reforming government. They will attempt to “co-opt” candidates who come to Washington on an anti-spending platform. (See my post on Republican minority leader Mitch McConnell (R-KY)).
In a recent Washington Times piece, John Ellis makes a compelling case for why 2010 is not going to be a replay of 1994:
Nobody can doubt that House Minority Leader John A. Boehner and Senate Republican Leader Mitch McConnell are good and loyal Republicans, but they lack everything that made Mr. Gingrich the author of success in 1994. Both are passive and timid and lack the drive and energy a real leader needs. Both are primarily managers rather than public voices of their caucuses. Neither can dominate a TV screen as Mr. Gingrich could, and neither is able to capture the public’s attention by focusing issues sharply and succinctly. Mr. Boehner is a wooden personality devoid of Mr. Gingrich’s charisma, and the slogan: “Boehner for Speaker,” which is beginning to appear, is hardly inspiring. Mr. McConnell is amiable but retiring, never arresting or incisive.
Indeed, the current Republican leadership bemoans the Obama administration’s reckless big spending and deficits. But other than complain and insist that the president should “pay for” additional spending, the GOP leadership has given no evidence that it recognizes — or even believes — that we actually need a smaller government.
Instead, the GOP has trotted out timid half-measures that they think will play well to the country’s anti-spending mood, but that would actually accomplish very little.
Ron Paul, the Chamber of Commerce, and Economic Freedom
Tim Carney has a blog post at the Examiner that’s worth quoting in full:
The U.S. Chamber of Commerce has issued its 2009 congressional scorecard, and once again, Rep. Ron Paul, R-Tex. — certainly one of the two most free-market politicians in Washington — gets the lowest score of any Republican.
Paul was one of a handful of GOP lawmakers not to win the Chamber’s “Spirit of Enterprise Award.” He scored only a 67%, bucking the Chamber on five votes, including:
- Paul opposed the “Solar Technology Roadmap Act,” which boosted subsidies for unprofitable solar energy technology.
- Paul opposed the “Travel Promotion Act,” which subsidizes the tourism industry with a new fee on international visitors.
- Paul opposed the largest spending bill in history, Obama’s $787 billion stimulus bill.
(Rep John Duncan, R-Tenn., tied Ron Paul with 67%. John McHugh, R-N.Y., scored a 40%, but he missed most of the year because he went off to the Obama administration.)
I wrote about this phenomenon last year, when the divergence was even greater between the Chamber’s agenda and the free-market agenda:
Similarly, Texas libertarian GOPer Rep. Ron Paul—the most steadfast congressional opponent of regulation, taxation, and any sort of government intervention in business—scored lower than 90% of Democrats last year on the Chamber’s scorecard.
Sen. Jim DeMint, R-S.C., had the most conservative voting record in 2008 according to the American Conservative Union (ACU), and was a “taxpayer hero” according to the National Taxpayer’s Union (NTU), but the U.S. Chamber of Commerce says his 2008 record was less pro-business than Barack Obama, Joe Biden, and Hillary Clinton.
This year’s picture was less glaring, but it’s still more evidence that “pro-business” is not the same as “pro-freedom.” The U.S. Chamber is the former. Ron Paul, and the libertarian position, is the latter.
I suspect that on issues such as free trade agreements and immigration reform, I might be closer to the Chamber’s position than to Ron Paul’s. But to suggest that Paul is wrong to vote against business subsidies — or that DeMint was wrong to vote against Bush’s 2008 stimulus package and the $700 billion TARP bailout – certainly does illustrate how much difference there can be between “pro-business” and “pro-market.” Instead of “Spirit of Enterprise,” the Chamber should call these the “Spirit of Subsidy Awards.”
What Does the State Department Not Want Us to Know about Honduras?
Senator Jim DeMint from South Carolina recently traveled to Honduras and found—no surprise—a peaceful country and broad support for the ouster of President Zelaya among members of civil society, the supreme court, political parties and others. In an op-ed in this weekend’s Wall Street Journal, DeMint describes his trip in light of Washington’s continuing support of Zelaya and its condemnation of what it calls a “coup.” U.S. policy is mystifying since the ousted president’s removal from office was a rare example in Latin America of an institutional defense of democracy as envisioned by the constitution and interpreted by the Supreme Court that ruled that the president be removed. (For independent opinions on the case, see here and here.)
However, the Senator reports a legal analysis at the State Department prepared by its top lawyer that apparently has informed Washington’s policy but that has not been made public nor even released to DeMint despite his repeated requests. In the interest of democracy and transparency, the State Department should immediately release its legal report. Maybe then we (which includes much of the hemisphere) will be less mystified about what is driving Washington policy toward Honduras. Or at least we’ll have a better insight on the administration’s understanding of democracy.
Jim DeMint’s Freedom Tent
Sen. Jim DeMint (R-SC) has been a leader in the fight for fiscal responsibility in Congress. He’s even led on issues that many elected officials have shied away from, such as Social Security reform and free trade. Recently he said that he would support Pat Toomey over Arlen Specter in a Republican primary, which may have prompted Specter’s party switch. DeMint was widely quoted as saying, “I would rather have 30 Republicans in the Senate who really believe in principles of limited government, free markets, free people, than to have 60 that don’t have a set of beliefs.”
It may have been feedback from that comment that caused DeMint to write an op-ed in the Wall Street Journal on his vision of a “Big Tent” Republican party. He makes some excellent points:
But big tents need strong poles, and the strongest pole of our party — the organizing principle and the crucial alternative to the Democrats — must be freedom. The federal government is too big, takes too much of our money, and makes too many of our decisions….
We can argue about how to rein in the federal Leviathan; but we should agree that centralized government infringes on individual liberty and that problems are best solved by the people or the government closest to them.
Moderate and liberal Republicans who think a South Carolina conservative like me has too much influence are right! I don’t want to make decisions for them. That’s why I’m working to reduce Washington’s grip on our lives and devolve power to the states, communities and individuals, so that Northeastern Republicans, Western Republicans, Southern Republicans, and Midwestern Republicans can define their own brands of Republicanism. It’s the Democrats who want to impose a rigid, uniform agenda on all Americans. Freedom Republicanism is about choice — in education, health care, energy and more. It’s OK if those choices look different in South Carolina, Maine and California.
That’s a good federalist, or libertarian, or traditional American conservative vision. But is it really Jim DeMint’s vision?
DeMint says “that centralized government infringes on individual liberty and that problems are best solved by the people or the government closest to them.” And he says it’s OK if “choices look different in South Carolina, Maine and California.” But marriage is traditionally a matter for the states to decide. Some states allow first cousins to marry, others don’t. Some states recognized interracial marriage in the early 20th century, others didn’t. And in every case the federal government accepted each state’s rules; if you had a marriage license from one of the states, the federal government considered you married. But Senator DeMint has twice voted for a constitutional amendment to overrule the states’ power to grant marriage licenses to same-sex couples. In his op-ed, he writes, “Republicans can welcome a vigorous debate about legalized abortion or same-sex marriage; but we should be able to agree that social policies should be set through a democratic process, not by unelected judges.” That’s a reasonable argument, but the amendment that DeMint voted for would overturn state legislative decisions as well as judicial decisions.
Does Jim DeMint believe that “it’s OK if choices [about marriage] look different in South Carolina, Maine, [Vermont, New Hampshire], and California”? If so, he should renounce his support for the anti-federalist federal marriage amendment. If not, then it seems that he opposes the Democrats’ attempts to “impose a rigid, uniform agenda on all Americans . . . in education, health care, energy and more,” but he has no problem with Republicans imposing their own “rigid, uniform agenda on all Americans” from South Carolina to Vermont.
It might be noted that Senator DeMint also supported the federal attempt to overturn Florida court decisions regarding Terri Schiavo, but we can hope all Republicans have learned their lesson on that bit of mass hysteria.
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