We’re ten years past 9/11, and over the last decade we’ve shed a number of our liberties and spent wildly to counter a terrorist threat that, as the recent model airplane plot demonstrated, isn’t existential. The bureaucratic legacy of 9/11, the Department of Homeland Security, has proven an unwieldy and pork-laden nightmare. It’s time to abolish it.

My recent policy analysis, Abolish the Department of Homeland Security, makes the case for doing so. To begin with, DHS is a management disaster by its very nature:

In creating Homeland Security, Congress lumped together 22 previously unconnected federal agencies under a new Cabinet secretary. That’s a problem, not a solution. And while members of Congress routinely clamor for consolidating Homeland Security oversight in one committee, that seems unlikely: 108 congressional committees and subcommittees oversee the department’s operations. If aggregating disparate fields of government made any sense in the first place, we long ago would have consolidated all Cabinet responsibilities under one person — the secretary of government.

Apart from the structural handicaps that DHS faces, the whole notion of “homeland security” is problematic. The “odiously Teutono/Soviet” concept trends us ever closer to a police state and is particularly prone to pork-barrel spending. As I said in my recent op-ed on the topic:

It allows politicians to wrap pork in red, white and blue in a way not possible with defense spending. Not every town can host a military installation or build warships, but every town has a police force that can use counterterrorism funds to combat gangs or a fire department that needs recruits or a new fire station.

Congress must reform its grant programs and end this wasteful spending. While we’re at it, let’s end federal funding for fusion centers, local- and state-organized intelligence cells that duplicate FBI efforts in counterterrorism and end up labeling nearly anyone who expresses political dissent as a potential terrorist, a point I made at this Capitol Hill Briefing. I’ll be speaking at another Capitol Hill Briefing with Jim Harper today on abolishing the Transportation Security Administration. More information available here.

Abolish the Department of Homeland Security is a post from Cato @ Liberty - Cato Institute Blog

House Republican leaders went with Rep. Hal Rogers (R-KY) – a.k.a. “The Prince of Pork” – to chair the House Appropriations Committee. As I wrote last week, the prospect of Rogers chairing Appropriations is about as inspiring as re-heated meatloaf when it comes to his potential for pushing serious spending reforms.

Republican leaders in the House chose to ignore the concerns of tea party activists and other proponents of limited government, who were more supportive of Rep. Jack Kingston’s (R-GA) dark-horse push for the chairmanship. Kingston’s plan to “change the culture” on Appropriations offered a lot of positive ideas suggesting that he was more in tune with the voters that gave Republicans the majority.

Politico reported that Kingston received “the cold shoulder” from the House leadership in his bid to chair appropriations. Instead, presumptive Speaker of the House John Boehner supported spending-hawk Jeff Flake’s (R-AZ) bid for a seat on the committee. That’s nice, but Flake himself appears to recognize that his appointment could amount to a token gesture if old bull spenders end up ruling the roost:

“If it’s just putting a few conservatives on the committee, and leaving the current structure pretty much in place, that’s not enough.”

Some congressional Republicans have defended Rogers’ chairmanship, saying that he’ll be fine if he sticks to what he says he’s going to do. A long-time champion of earmarking, Rogers did agree to go along with a ban on the tawdry practice a few weeks ago, which was convenient timing.

Will the leopard change his spots?

The left-wing Think Progress blog recently used a FOIA request to obtain a letter Rogers sent to the Department of Health and Human Services requesting ObamaCare money for a community service center in his district. No earmarks? No problem for Hal Rogers. He can just go the time-honored route of policymakers heckling federal agencies for pork. Earmarks represent just one of many ways that parochial-minded members steer benefits to their districts at the expense of taxpayers and the general public good.

According to Bloomberg, Kentucky’s Lexington Herald-Leader called Rogers “the very model of an old-fashioned pork-barrel politician who builds an empire out of government spending.” Roger’s website contains numerous pictures of him attending local photo-ops for projects he helped fund with federal taxpayers’ money. (I suppose one argument in his favor is that lifting all those ceremonial spades means he’s probably in good shape to handle the rigors of chairmanship.)

The support for Rogers from House Republican leaders is a slap in the face of voters who demanded change in Washington—change from the big-spending ways of both Democrats and Republicans.

‘Prince of Pork’ to Chair Appropriations is a post from Cato @ Liberty - Cato Institute Blog

Sen. John Kerry (D, MA) made an, er, interesting rhetorical case yesterday (as reported on E2 Wire, The Hill‘s Energy and Environment blog) that borrows heavily from the Bush playbook: your patriotism hinges on voting for his favored policy — in this case, a climate change bill. Not that the bill is really about climate change, of course. It’s about a list of goodies completely unrelated to the changing political winds:

What we are talking about is a jobs bill. It is not a climate bill. It is a jobs bill, and it is a clean air bill. It is a national security, energy independence bill,” he told reporters in the Capitol…

“And people are going to have to decide whether they are going to vote for America or against it,” he concluded.

Do You or Do You Not Hate America? is a post from Cato @ Liberty - Cato Institute Blog

A couple weeks ago Orson Swindle, an assistant secretary of commerce for economic development in the Reagan Administration, was kind enough to send me news articles from his days battling policymakers over porky Economic Development Administration projects. In a 1989 Insight article, Orson gave a nice summation of one of the problems with special interest spending:

The minute you fund a program you’ve just created a constituency group. Before long, they will be organized and have a staff here in Washington, which is paid from dues from the members who get their money from the federal government. And those go up and lobby to keep the money going. It’s a classic microcosm of what’s wrong with government.

The National Association of Development Organizations is a perfect example of what Orson was talking about.

NADO says it “is an advocate for federal programs and policies that promote regional strategies and solutions for addressing local community and economic development needs.” It got started in 1967 when federal subsidization of state and local government was taking off. It’s headquartered in Washington and its dues come from members getting money from the federal government. According to USASpending.gov, NADO itself has received almost $1 million in federal money over the past decade.

Economic Development Administration funding is obviously a core interest for NADO. On January 8^th it applauded a pro-EDA funding letter sent by 20 senators to President Obama. NADO’s concluding remarks are illustrative of the incestuous relationship between the special interests and members of Congress:

NADO thanks those regional development organizations that contacted their Senators to urge them to sign the letter. Regional development organizations are encouraged to formally thank those Senators that showed their support for EDA.

Exactly what does NADO mean by formally thank? Regardless, “thanking” politicians for giving the gift of other people’s money is patently repulsive.

On February 3^rd, the House Appropriations Subcommittee on Commerce, Justice and Science held a hearing on the EDA to discuss its budget. According to the subcommittee’s website, four of the five witnesses called to testify were NADO representatives. The fifth witness was the president of the Arkansas State University System, whose testimony sang the virtues of EDA grants. Talk about a stacked deck.

For those unaware, this is how appropriations committee dog and pony shows hearings operate. There’s usually nary a word of criticism from testifiers for the simple reason that critics are generally persona non grata.

Former Yale University professor James Payne wrote an insightful Cato Policy Analysis entitled “Budgeting in Neverland: Irrational Policymaking in the U.S. Congress and What Can Be Done about It.” In it, Payne details how appropriations hearings are pro-government spending echo chambers. Payne recounts one exchange with a member of Congress that is rather ironic:

In an interview with Rep. Allan Mollohan (D-WV), the congressman unconsciously revealed how extremely one-sided the environment was. I mentioned to him that as part of my research I would be coming to his appropriations subcommittee to testify against funding for the National Science Foundation. “You don’t want to fund the National Science Foundation?” he asked in disbelief. “I’ve never heard anybody say they didn’t think NSF ought to be funded.”

There are many arguments against taxpayer funding of scientific research, including the points that it retards science, corrupts scientists, and hinders economic development, not to mention all the more obvious ones about opportunity cost, tax burdens, tax system overhead costs, waste, and perverse income redistribution. That Representative Mollohan had never heard any of these many arguments, despite his presumed expertise as a member of the NSF appropriations subcommittee, showed how complete the insulation of members of Congress had become.

Congressman Mollohan is the chairman of the aforementioned House Appropriations Subcommittee on Commerce, Justice and Science.

In his study, Payne surveyed 14 committee hearings. His finding speaks for itself:

The comprehensive tabulation showed that in those 14 hearings, 1,014 witnesses appeared to argue in favor of programs and only 7 spoke against them, an imbalance of 145 to 1.

With the release of the president’s bloated $3.8 trillion budget proposal, the appropriations season is under way on Capitol Hill. So while taxpayers will be hard at work for Congress, Congress will be hard at work for the special interests like NADO. A classic microcosm of what’s wrong with Congress indeed.

EDA, NADO, and the Appropriations Hearings Charade is a post from Cato @ Liberty - Cato Institute Blog

This new video from the Center for Freedom and Prosperity explains how last year’s so-called stimulus was a flop – and also reveals why politicians are pushing for another big-government spending bill.

Interestingly, since last year’s stimulus was such a disaster, the redistributionists in Washington are calling their new proposal a “jobs bill.” But as I say in the video, this is akin to putting perfume on a hog.

For further background, here is a video explaining why Keynesian economics is wrong and another predicting (in advance!) that last year’s stimulus would be a mistake. And just in case anyone actually wants the economy to grow faster, here’s one about policies that actually increase prosperity.

Making Government Bigger Is Not Stimulus – and It Won’t Create Jobs is a post from Cato @ Liberty - Cato Institute Blog

While American politicians are experts when it comes to squandering money, they may not be the world’s most profligate group of lawmakers. To be sure, American politicians sometimes give big piles of other people’s money to bail out Fannie Mae and Freddie Mac, but the politicians at the European Commission in Brussels engage in similar forms of corporate welfare with their Emissions Trading Scheme.

The overall burden of government is heavier in Europe, so that certainly suggests that there are greater opportunities to waste money, but what makes the European Commission special is that it is insulated from democratic accountability and there is no system of checks and balances. So even though the actual amount of money spent by Brussels is small compared to what is wasted by national governments in Europe, the outcomes are especially obscene. Here’s a story from the UK-based Daily Mail, reporting on a program (no joke) to fund activities such as basket weaving and siestas:

British taxpayers are helping to fund basket-weaving and slapstick acting workshops for young people across Europe. The projects, which include meetings about folk dancing and even a scheme to promote afternoon siestas, are part of an £800million EU programme to help people aged 13-30 ‘feel European’. …Another venture in Finland received thousands to support a coffee house which offered ‘everyone the chance to have a sleep for free’. It aimed to encourage afternoon naps to reduce stress. ‘Youth exchange participants’ also flocked to Macedonia last year for a meeting entitled Stories And Legends, receiving £18,000 to explore storytelling. …An EC spokesman said the projects were about exposing young people to other cultures and increasing their participation in  society. He added: ‘I don’t see anything wrong with basket-weaving or music-making if it encourages young people to meet other Europeans and learn a new skill from another part of Europe.’

Readers may be thinking this is no big deal. After all, American politicians fund pork projects all the time. But here’s the clincher. The UK’s Daily Telegraph reports that the European Commission is subsidizing a ski trip for…drum roll, please… the children of European politicians, and that the subsidies even go to households with income equivalent to about $175,000:

Taxpayers will heavily subsidise a skiing holiday in the Italian Alps for the children of MEPs and European Parliament officials in February. …The eight-day skiing trip for 80 children aged between eight and 17 is timed to begin over the weekend of St Valentine’s Day, providing some romantic time off from parenting for officials.  Costs, the holiday is priced at 920 euros (£822), are generously subsidised by the parliament’s budget. Households receive different levels of subsidy depending on their monthly income but even those on a income of over £108,000 get a discount. There is reduction of up to 52 per cent for officials earning £69,620 a year and an MEP, earning £86,000, is eligible for a subsidy of 45 per cent. …The children will enjoy full board in a three-star hotel in the beautiful village of Spiazzi. The trip includes “workshops” in a “multilingual environment” on the themes of “the mountain, its snow, its nature”. …The parliament’s spokesman declined to comment on the holiday.

Perhaps I’m not paying close enough attention, but I can’t think of anything the crowd in Washington has done that rivals this odious example of self-serving by lawmakers. Can anybody come up with an example that tops this?

Great Moments in Government Waste, the European Version is a post from Cato @ Liberty - Cato Institute Blog

I caught a lot of flack from my Republican friends for my post blaming the FY2009 deficit on Bush instead of Obama. Well, I must be a glutton for punishment because I can’t resist jumping (albeit reluctantly) to Obama’s defense again. I’m venting my spleen for two reason. First, FoxNews.com posted a story headlined “Obama Shatters Spending Record for First-Year Presidents” and noted that:

President Obama has shattered the budget record for first-year presidents — spending nearly double what his predecessor did when he came into office and far exceeding the first-year tabs for any other U.S. president in history. In fiscal 2009 the federal government spent $3.52 trillion …That fiscal year covered the last three-and-a-half months of George W. Bush’s term and the first eight-and-a-half months of Obama’s.

This story was featured on the Drudge Report, so it has received a lot of attention. Second, Bush’s former Senior Adviser wrote a column for the Wall Street Journal eviscerating Obama for big budget deficits. Given Bush’s track record, this took considerable chutzpah, but what really nauseated me was this passage:

When Mr. Obama was sworn into office the federal deficit for this year stood at $422 billion. At the end of October, it stood at $1.42 trillion.

I’m a big fan of criticizing Obama’s profligacy, but it is inaccurate and/or dishonest to blame him for Bush’s mistakes. At the risk of repeating my earlier post, the 2009 fiscal year began on October 1, 2008, and the vast majority of the spending for that year was the result of Bush Administration policies. Yes, Obama did add to the waste with the so-called stimulus, the omnibus appropriation, the CHIP bill, and the cash-for-clunkers nonsense, but as the chart illustrates, these boondoggles only amounted to just a tiny percentage of the FY2009 total — about $140 billion out of a $3.5 trillion budget.

There are some subjective aspects to this estimate, to be sure. Supplemental defense spending could boost Obama’s share by another $25 billion, but Bush surely would have asked for at least that much extra spending, so I didn’t count that money but individual readers can adjust the number if they wish. Also, Obama used some bailout money for the car companies, but I did not count that as a net increase in spending since the bailout funds were approved under Bush and I strongly suspect the previous Administration also would have funneled money to GM and Chrysler. In any event, I did not give Obama credit for the substantial amount of TARP funds that were repaid after January 20, so the net effect of all the judgment calls certainly is not to Bush’s disadvantage.

Let’s use an analogy. Obama’s FY2009 performance is like a relief pitcher who enters a game in the fourth inning trailing 19-0 and allows another run to score. The extra run is nothing to cheer about, of course, but fans should be far more angry with the starting pitcher. That having been said, Obama since that point has been serving up meatballs to the special interests in Washington, so his earned run average may actually wind up being worse than his predecessor’s. He promised change, but it appears that Obama wants to be Bush on steroids.

Defending Obama…Again is a post from Cato @ Liberty - Cato Institute Blog

Writing for The Hill, I explain why Keynesian-style stimulus does not work. In addition, I note that the so-called stimulus was just an excuse for pork-barrel spending. But my concluding point, excerpted below, is that the White House goofed politically by making specific claims about the good things that ostensibly would happen by increasing the burden of government spending:

The only surprise was that the White House was foolish enough to make specific claims of the good results that supposedly would flow from all the pork-barrel spending. In part, this is the absurd notion of claiming 600,000-plus “jobs saved or created” when total employment actually has fallen by more than 3 million. But the bigger mistake was claiming that the faux stimulus would keep the unemployment rate from rising above 8 percent and that failure to squander $787 billion would cause the jobless rate to climb to 9 percent. The politicians got their wish, yet now the unemployment rate is above 10 percent. Brilliant.

An Easy Target: Mocking the Stimulus is a post from Cato @ Liberty - Cato Institute Blog

Republicans are all over the ACORN scandal and calling for an end to federal subsidies for the group. Well that’s great, but it’s not exactly going out on a limb and pushing for a major budget reform.

Why doesn’t the GOP use this as an opportunity to call for completely ending the programs that funded ACORN? Wouldn’t it be better to save the $13 billion a year that HUD spends on so-called “community development” programs, rather than just the few million dollars a year that taxpayers spend on ACORN?

The federal programs that funded ACORN are particularly wasteful ones, including Community Development Block Grants, Housing Counseling Assistance, and others as Tad DeHaven has explained.

At a minimum, the GOP should be arguing that with deficits of $1 trillion the federal government cannot afford to intervene in classic local and private activities such as community development. Boehner and Canter want the IRS to cut ties with ACORN, but they should be leading the charge to end porky “community development” spending altogether.

ACORN Challenge for the GOP is a post from Cato @ Liberty - Cato Institute Blog

Last night I received a press release from the National Republican Senatorial Committee entitled “Lincoln Votes to Protect Millions in Taxpayer Funds for Little-Used Pennsylvania Airport.”  Lincoln would be Arkansas Democrat Senator Blanche Lincoln.  According to the NRSC press release:

In a remarkable vote on the Senate floor this afternoon, U.S. Senator Blanche Lincoln (D-AR) made clear that despite rising federal deficits and a record national debt, she still stands firmly on the side of more wasteful Washington spending.  Lincoln today helped defeat an amendment, offered by U.S. Senator Jim DeMint (R-SC), to the annual transportation appropriations bill that would end taxpayer subsidies for the John Murtha Airport, a little used 650-acre facility in Johnstown, Pennsylvania that has received at least $200 million in taxpayer funding.  U.S. Congressman John Murtha (D-PA), who the airport was named after and who has been the subject of a number of ethics-related stories in recent months, has personally directed $150 million in federal funds to the facility even though it only has 3 flights daily to one destination: Washington, D.C.

When I went to the NRSC’s website I noticed similar press releases for other Democrat senators who I’m assuming are on the outfit’s election hit-list.  Having never received an NRSC press release before, I’m assuming I received this one because I ripped Senator Lincoln in a blog post last week.  If that’s the case, I’m impressed with the NRSC’s resourcefulness.  Regardless, it made me curious to find out if any Republican senators voted with Lincoln and the other Democrats.

In fact, yes, two Republicans did vote to keep the federal money flowing to Murtha’s airport:  George Voinovich of Ohio and Christopher “Kit” Bond of Missouri.  Both are members of the third party in Congress: Appropriators.  Given that he is the ranking member of the Appropriations Committee’s Subcommittee on Transportation, Housing and Urban Development, it’s not a surprise that Bond voted against an amendment unfriendly to a larded-up transportation appropriations bill.  Both are retiring at the end of their terms in 2010, so the NRSC apparently wasn’t too worried about charges of hypocrisy.

With the exception of the aforementioned, all Republican senators voted for the amendment, including appropriators like Murkowski, Collins, Cochran, and Bennett.  None of those folks are exactly known as fiscal tightwads.  So what gives?  Will these senators be headlining tea parties in the near future?

The truth is it’s just politics.  The Republicans are in the minority and got kicked out of the majority by voters due in part to years of fiscal profligacy.  I’m sure more than a few believed this was the type of vote that will help them curry favor with the growing swarms of voters upset with Washington’s out-of-control spending.  It probably helps a smidgen (sarcasm intended) that the airport in question is located in Pennsylvania, home to two Democrat senators, one of which is recent Republican defector Arlen Specter.  Oh, and it’s Democrat John Murtha’s airport.

I’m wondering where these Republican votes to eliminate pork were when I was working with Sen. Tom Coburn (R-OK) several years ago to kill funding for the Bridge to Nowhere and other assorted congressional slop.  At the time, Republicans were in the Senate majority. For example, on the Bridge to Nowhere vote, our amendment went down 15-82.  Only 11 Republicans supported the amendment.

Don’t get me wrong. I’m pleased to see almost all Republicans (and five Democrats) vote to stop funding Murtha’s airport.  But their votes were driven by political considerations and not a new-found zeal for reigning in federal spending.  And let’s face it, defunding the Murtha airport is merely symbolic given that it would save peanuts.  So let’s see what happens on a vote to strip funding for the entire transportation program that subsidizes the other small airports in this country, many of which probably wouldn’t exist were it not for the federal cheese.  Of course, someone would have to actually introduce such an amendment first.  Senator Coburn or DeMint?

Pork Politics is a post from Cato @ Liberty - Cato Institute Blog

Some naive people might have been convinced that the U.S. House voted to wreck the American economy by endorsing cap and trade because it was the only way to save the world.  But even many environmentalists had given up on the bill approved last Friday.  It is truly a monstrosity:  it would cost consumers plenty, while doing little to reduce global temperatures.

But the legislation had something far more important for legislators and special interests alike.  It was a pork-fest that wouldn’t quit.

Reports the New York Times:

As the most ambitious energy and climate-change legislation ever introduced in Congress made its way to a floor vote last Friday, it grew fat with compromises, carve-outs, concessions and out-and-out gifts intended to win the votes of wavering lawmakers and the support of powerful industries.

The deal making continued right up until the final minutes, with the bill’s co-author Representative Henry A. Waxman, Democrat of California, doling out billions of dollars in promises on the House floor to secure the final votes needed for passage.

The bill was freighted with hundreds of pages of special-interest favors, even as environmentalists lamented that its greenhouse-gas reduction targets had been whittled down.

Some of the prizes were relatively small, like the $50 million hurricane research center for a freshman lawmaker from Florida.

Others were huge and threatened to undermine the environmental goals of the bill, like a series of compromises reached with rural and farm-state members that would funnel billions of dollars in payments to agriculture and forestry interests.

Automakers, steel companies, natural gas drillers, refiners, universities and real estate agents all got in on the fast-moving action.

The biggest concessions went to utilities, which wanted assurances that they could continue to operate and build coal — burning power plants without shouldering new costs. The utilities received not only tens of billions of dollars worth of free pollution permits, but also billions for work on technology to capture carbon-dioxide emissions from coal combustion to help meet future pollution targets.

That deal, negotiated by Representative Rick Boucher, a conservative Democrat from Virginia’s coal country, won the support of the Edison Electric Institute, the utility industry lobby, and lawmakers from regions dependent on coal for electricity.

Liberal Democrats got a piece, too. Representative Bobby Rush, Democrat of Illinois, withheld his support for the bill until a last-minute accord was struck to provide nearly $1 billion for energy-related jobs and job training for low-income workers and new subsidies for making public housing more energy-efficient.

Representative Joe Barton, a Texas Republican staunchly opposed to the bill, marveled at the deal-cutting on Friday.

“It is unprecedented,” Mr. Barton said, “but at least it’s transparent.”

This shouldn’t surprise anyone who follows Washington.  Still, the degree of special interest dealing was extraordinary.  Anyone want to imagine what a health care “reform” bill is likely to look like when legislators finish with it?

Cap ‘n Trade: The Ultimate Pork-Fest is a post from Cato @ Liberty - Cato Institute Blog

Karl Rove should have been named Man of the Year at some point by the Democratic National Committee. The political consultant/Bush adviser played a big role in expanding the burden of government, convincing Bush to saddle the nation with fiscal disasters such as the “no-bureaucrat-left-behind” education bill, the corrupt farm bills, the pork-filled transportation bills, and the horrific new entitlement for prescription drugs. He also helped ruin the GOP image with his inside-the-beltway version of “compassionate conservatism,” thus paving the way for big Democratic victories in 2006 and 2008.

I can understand why libertarians have no desire to listen to his advice, but I’m baffled why Republicans or conservatives would give him the time of day. Yet he is a constant presence on FOX News and has a weekly column in the Wall Street Journal. With no apparent irony, his latest WSJ column is entitled “How to Stop Socialized Health Care.” Too bad he didn’t follow his own advice in 2003 when pulling out all the stops to enact the biggest entitlement in four decades.

Beyond Irony is a post from Cato @ Liberty - Cato Institute Blog

There are lots of reasons Washington should not bail out the automakers.  Whatever the justification for saving financial institutions — the “lifeblood” of the economy, etc., etc. — saving selected industrial enterprises is lemon socialism at its worst.  The idea that the federal government will be able to engineer an economic turnaround is, well, the sort of economic fantasy that unfortunately dominates Capitol Hill these days.

One obvious problem is that legislators now have a great excuse to micromanage the automakers.  And they have already started.  After all, if the taxpayers are providing subsidies, don’t they deserve to have dealerships, lots of dealerships, just down the street?  That’s what our Congresscritters seem to think.

Observes Stephen Chapman of the Chicago Tribune:

The Edsel was one of the biggest flops in the history of car making. Introduced with great fanfare by Ford in 1958, it had terrible sales and was junked after only three years. But if Congress had been running Ford, the Edsel would still be on the market.

That became clear last week, when Democrats as well as Republicans expressed horror at the notion that bankrupt companies with plummeting sales would need fewer retail sales outlets. At a Senate Commerce Committee hearing, Chairman Jay Rockefeller, D-W.Va., led the way, asserting, “I honestly don’t believe that companies should be allowed to take taxpayer funds for a bailout and then leave it to local dealers and their customers to fend for themselves.”

Supporters of free markets can be grateful to Rockefeller for showing one more reason government shouldn’t rescue unsuccessful companies. As it happens, taxpayers are less likely to get their money back if the automakers are barred from paring dealerships. Protecting those dealers merely means putting someone else at risk, and that someone has been sleeping in your bed.

The Constitution guarantees West Virginia two senators, and Rockefeller seems to think it also guarantees the state a fixed supply of car sellers. “Chrysler is eliminating 40 percent of its dealerships in my state,” he fumed, “and I have heard that GM will eliminate more than 30 percent.” This development raises the ghastly prospect that “some consumers in West Virginia will have to travel much farther distances to get their cars serviced under warranty.”

Dealers were on hand to join the chorus. “To be arbitrarily closed with no compensation is wasteful and devastating,” said Russell Whatley, owner of a Chrysler outlet in Mineral Wells, Texas.

Lemon socialism mixed with pork barrel politics!  Could it get any worse?  Don’t ask: after all, this is Washington, D.C.

Should You Vote on Keeping Your Local Car Dealership? is a post from Cato @ Liberty - Cato Institute Blog

So far the Obama administration has been enjoying the ultimate fiscal free lunch.  Massive borrowing, massive spending, lower taxes, and low interest rates.

Alas, all good things must come to an end.

Reports the New York Times:

The nation’s debt clock is ticking faster than ever — and Wall Street is getting worried.

As the Obama administration racks up an unprecedented spending bill for bank bailouts, Detroit rescues, health care overhauls and stimulus plans, the bond market is starting to push up the cost of trillions of dollars in borrowing for the government.

Last week, the yield on 10-year Treasury notes rose to its highest level since November, briefly touching 3.17 percent, a sign that investors are demanding larger returns on the masses of United States debt being issued to finance an economic recovery.

While that is still low by historical standards — it averaged about 5.7 percent in the late 1990s, as deficits turned to surpluses under President Bill Clinton — investors are starting to wonder whether the United States is headed for a new era of rising market interest rates as the government borrows, borrows and borrows some more.

Already, in the first six months of this fiscal year, the federal deficit is running at $956.8 billion, or nearly one seventh of gross domestic product — levels not seen since World War II, according to Wrightson ICAP, a research firm.

Debt held by the public is projected by the Congressional Budget Office to rise from 41 percent of gross domestic product in 2008 to 51 percent in 2009 and to a peak of around 54 percent in 2011 before declining again in the following years. For all of 2009, the administration probably needs to borrow about $2 trillion.

The rising tab has prompted warnings from the Treasury that the Congressionally mandated debt ceiling of $12.1 trillion will most likely be breached in the second half of this year.

Last week, the Treasury Borrowing Advisory Committee, a group of industry officials that advises the Treasury on its financing needs, warned about the consequences of higher deficits at a time when tax revenues were “collapsing” by 14 percent in the first half of the fiscal year.

“Given the outlook for the economy, the cost of restoring a smoothly functioning financial system and the pending entitlement obligations to retiring baby boomers,” a report from the committee said, “the fiscal outlook is one of rapidly increasing debt in the years ahead.”

While the real long-term interest rate will not rise immediately, the committee concluded, “such a fiscal path could force real rates notably higher at some point in the future.”

Alas, this is just the beginning.  Three quarters of the spending in the misnamed stimulus bill (it would more accurately be called the “Pork and Social Spending We’ve Been Waiting Years to Foist on the Unsuspecting Public Bill”) occurs next year and beyond, when most economists expect the economy to be growing again.  Moreover, much of the so-called stimulus outlays do nothing to actually stimulate the economy, being used for income transfers and the usual social programs.

However, we will be paying for these outlays for years.  Even as, the Congressional Budget Office warns, the GDP ultimately shrinks as federal expenditures and borrowing “crowd out” private investment.  Indeed, the CBO figures that incomes will suffer a permanent decline–even as taxes are climbing dramatically to pay off all of the debt accumulated by Uncle Sam.

And you don’t want to think about the total bill as Washington bails out (almost $13 trillion worth so far) everyone within reach, “stimulates” (the bill passed earlier this year ran $787 billion) everything within reach, and spends money (Congress approved a budget of $3.5 trillion for next year) within reach.  Indeed, according to CBO, the president’s budget envisions increasing the additional collective federal deficit between 2010 and 2019 from $4.4 trillion to $9.3 trillion.)  Then there will be more federal spending for wastral government entities, such as the Federal Housing Administration; failing banks, which are being closed at a record rate by the FDIC; pension pay-offs for bankrupt companies, administered by the Pension Benefit Guaranty Corporation; and covering the big tab being up run up by Social Security and Medicare, which currently sport unfunded liabilities of around $100 trillion.

Oh, to be an American taxpayer — and especially a young American taxpayer — who will be paying Uncle Sam’s endless bills for the rest of his or her life!

So Much for the Obama Administration’s Fiscal Free Lunch is a post from Cato @ Liberty - Cato Institute Blog

In Washington, the symbolic almost always trumps the substantive.  Thus, legislators complain, for good reason, about pork and earmarks, which ran about $35 billion at their maximum, and ignore entitlements, which entail some $100 trillion in unfunded liabilities.

So it is with President Obama.  He continues the endless bailouts, which cumulatively now run around $13 trillion.  He proposed a $3.6 trillion budget and will leave us with a $1.4 trillion deficit next year–and nearly $5 trillion in additional debt on top of the massive deficits already projected over the coming decade.  But he asked his Cabinet officers to chop $100 million in administrative expenses.

And he says he doesn’t need a new helicopter.  Fiscal responsibility in action.

Alas, the helicopter, while costing billions, isn’t an easy budget target.

Reports the New York Times:

At a Washington conference on fiscal responsibility in February, President Obama tried to set the tone by saying he did not need the new costly presidential helicopters that had been ordered by the Bush administration.

“The helicopter I have now seems perfectly adequate to me,” he said to laughter. On a more serious note, he added, “I think it is an example of the procurement process gone amok. And we’re going to have to fix it.”

But the president is learning that in the world of defense contracting, frugality can be expensive. Some lawmakers and military experts warn that his effort to avoid wasting billions of dollars could end up doing just that.

The administration’s plan to halt the $13 billion helicopter program, announced this month, will leave the government with little to show for the $3.2 billion it has spent since the Bush administration set out to create a futuristic craft that could fend off terrorist attacks and resist the electromagnetic effects of a nuclear blast.

Critics say the Pentagon would also spend at least $200 million in termination fees and perhaps hundreds of millions to extend the life of today’s aging fleet. As a result, several influential lawmakers and defense analysts are now calling for a compromise that would salvage a simpler version of the helicopter that is already being tested.

They say it could be a more palatable alternative in tough economic times than seeking new bids for a more advanced craft, which has proved difficult to develop.

No wonder Washington is known as a place where everything about government is permanent.  Once you start spending money on a program, it becomes extremely hard to stop.  Part of that is the political dynamic of interest groups, the problem so well dissected by the Public Choice economists.  And part of it is legal and procedural.  Contracts are let, cancellation fees are due.  It’s bad to waste money on a gold-plated helicopter.  It seems even worse to waste money developing a gold-plated helicopter, and then getting nothing at all by canceling it.

There is, however, an amazingly simple solution, of which Congress and the president apparently are not aware.

Don’t spend the money in the first place.  Eschew new programs.  Say no to special interests.  Let taxpayers keep more of their own money.

This approach would seem to make sense at any time.  But especially today, with the federal government facing a deficit approaching $2 trillion in 2009.

Didn’t Nancy Reagan lecture us to “just say no”?  We should invite her back for a return tour of Washington, only she should talk about federal spending this time.

The Politics of Budget-Cutting is a post from Cato @ Liberty - Cato Institute Blog

World governments should be careful not to play politics with the Mexican swine flu outbreak. The health consequences should of course be rigorously addressed—but without adding economic consequences, which is what several countries appear poised to do.

Public health scares have a history of seeping into trade policy without anything resembling sufficient consideration of the evidence. Governments in Russia and East Asia are already banning pork exports from Mexico, even though there is zero evidence that they pose a health hazard. It hearkens back to unfounded bans of U.S. beef in recent years by the European Union and South Korea.

If the U.S. government jumps on board, U.S. exports could be targeted for retaliatory trade actions. One quarter of U.S. pork production is exported, as well as billions of dollars of our soybeans used as feed by foreign hog farmers.

Exploiting this crisis could turn what is so far a manageable health problem into an unnecessary trade and diplomatic conflict. Obviously the global economy does not need the extra strain.

The Global Economy Is Not Immune to Swine Flu is a post from Cato @ Liberty - Cato Institute Blog

You would think Barack Obama’s tsunami of federal spending would provide an easy target for Republicans.  But they apparently haven’t learned the right lessons after two successive electoral debacles.

Earmarks don’t account for a lot of money in Washington terms.  You know, just a few billion dollars out of trillions or quadrillions or whatever we are now up to — it’s so easy to lose track!

Nevertheless, earmarks are a powerful symbol.  So trust the “stupid party” to muff its chance.  Reports Politico:

Bashing Democrats on the day President Obama signed the $410 billion omnibus spending bill was the easy part for Republican leaders Wednesday.

But getting Rep. John Boehner and Sen. Mitch McConnell on the same page on earmarks will be a lot tougher.

At a joint press conference designed to present a united Republican front against Democratic spending habits, McConnell (R-Ky.) and Boehner (R-Ohio) appeared to diverge on earmark reform.

“I think the president missed a golden opportunity to really fulfill his campaign commitment to not sign bills that have a lot of wasteful spending and are overburdened with earmarks,” Boehner said. “If you look at the earmark reforms that he proposed, the question I have is, ‘Where’s the beef?”

McConnell declined to answer the question about earmarks, and instead criticized the president’s contention that the omnibus bill was simply last year’s unfinished business.

“Let me tell what was not last year’s business was plussing the bill up 8 percent, which is twice the rate of inflation,” McConnell said. “This bill is not last year’s business. … It further illustrates my point that when you add up the stimulus and the omnibus, the spending in the first 50 days of the administration [comes] at a rate of $1 billion an hour.”

Republicans have tried to come up with a unified earmark reform plan, but have struggled as GOP appropriators are reluctant to sign on. McConnell is on the Senate Appropriations Committee and has called for earmark reforms, but he and many lawmakers defend Congress’ constitutional right to direct spending.

In the omnibus bill, McConnell secured some $75 million worth of earmarks, while Boehner, a long-time critic of earmarks, did not. Boehner says Congress should freeze earmarks for the rest of the year, saying it leads to wasteful and potentially corrupting Washington spending.

Of course, Democrats have taken not.  In signing the latest spending bill President Barack Obama landed a nice blow against GOP hypocrisy:

And I also find it ironic that some of those who rail most loudly against this bill because of earmarks actually inserted earmarks of their own and will tout them in their own states and their own districts.

If Congress can’t take a vow of poverty on distributing pork when the nation faces a $1.3 trillion budget deficit and trillions more in deficits over the coming years, then it isn’t likely ever to be more responsible with the public’s money.

No Wonder the GOP Has No Credibility on Spending is a post from Cato @ Liberty - Cato Institute Blog

I’m sympathetic to the oft-repeated saying that there are really three parties in Washington: Republicans, Democrats, and Appropriators.  This situation is likely to be demonstrated this evening when Republican members of the Senate Appropriations Committee provide enough votes for Democratic Sen. Harry Reid to close off debate and proceed to final passage of the pork-laden $410 billion fy2009 omnibus appropriations bill.

Greasing the skids for bigger government will be almost $8 billion in earmarks contained in the bill.  Fox News is pointing out that almost all of the Republican Senators expected or likely to support the Democratic measure stand to deliver quite a bit of pork to constituents and special interests.  Not coincidentally, all of the senators named, except Sen. Snowe of Maine, are appropriators.  As a matter of fact, if you look at the top 20 senators (both parties) in terms of dollars of earmarks secured for this bill, 15 are appropriators.

Bottom line: Appropriators love spending and they particularly love pork.  Sen. Snowe just likes the government spending other people’s money.

**Update: Cloture was invoked on a 62-35 vote and the legislation subsequently passed by voice vote.  Every single Democratic member of the Senate Appropriation Committee voted for cloture.  Republican appropriators Sens. Cochran, Specter, Bond, Shelby, Alexander, and Murkowski voted yes; Sens. McConnell, Gregg, Bennett, Hutchison, Brownback, Collins, and Voinovich voted no.  Thus, without the support of these Republican appropriators, the bill would have been effectively killed.  Of the top 20 recipients of earmarks in the bill, only 2 — Sens. Inhofe and McConnell — voted no.

Republicans, Democrats, and Appropriators…and Pork is a post from Cato @ Liberty - Cato Institute Blog

This week, a handful of fiscally conservative Republican senators have been trying to cut earmarks out of the $410 billion omnibus appropriations bill. According to Taxpayers for Common Sense, the legislation contains 8,570 earmarks worth $7.7 billion.

Senator Tom Coburn (R-OK) has sought to strike specific items, like the $200,000 earmark for Tattoo Removal Violence Prevention Outreach Program in Burbank, California and the $1.9 million earmark to the Pleasure Beach Water Taxi Service in Connecticut.

Senator John McCain (R-AZ) has taken a broader approach by introducing an amendment to strike all earmarks from the bill and revert to last year’s spending levels.

Not surprisingly, they have been unsuccessful. And given recent events, one must wonder if these efforts by fiscal conservatives are even welcomed by members of their own party.

The amendments introduced by Coburn and McCain were defeated by opposition from not only by the majority of Democratic senators, but also many Republican appropriators, like Senators Thad Cochrane (R-MS) and Lisa Murkowski (R-AK).

And despite his occasional anti-earmark rhetoric and support for the Coburn and McCain amendments, Senate Minority Leader Mitch McConnell (R-KY) is one of the chief beneficiaries of the earmark-laden omnibus bill. Reports suggest he requested either $75 or $51 million for his home state of Kentucky. Either way, he will obtain far more than his Democratic counterpart, Senate Majority Leader Harry Reid (D-NV), whose earmark requests total $26 million.

Democratic Senator Claire McCaskill (D-MO) has been fairly consistent in her criticism of the earmarking process and, for the most part, has voted accordingly. Proving that Republican affection for earmarking is a bicameral phenomenon, her stance attracted ire from Representative Roy Blunt (R-MO), formerly one of the highest-ranking Republicans in House, who said he “would hope that Claire would change her mind on this,” as he praised Senator Kit Bond’s (R-MO) prowess at earmarking.

Now, earmarks make up a relatively small slice of the overall budget, but as Coburn has noted, the problem with earmarks is ‘‘the hidden cost of perpetuating a culture of fiscal irresponsibility. When politicians fund pork projects they sacrifice the authority to seek cuts in any other program.”

For more on earmarks, check out the “Corporate Welfare and Earmarks” chapter of the Cato Handbook for Policymakers.

Republicans and Earmarks is a post from Cato @ Liberty - Cato Institute Blog