Weekend Links
- The Democrats’ ingenious plan to disguise the true cost of their health care bills.
- The health care legislation moving through Congress could increase young adults’ premiums by 100 percent.
- Why raising taxes won’t fix the deficit. Just look at California. And Rhode Island. And New York.
- “What profiteth a political party if it gains congressional seats but loseth its soul?” —Michael D. Tanner (Yes, he’s referring to Republicans.)
- Here we go again: The No Child Left Behind Act is up for renewal.
- Podcast: “Ayn Rand’s Affinities and Animosities“
Deep Thoughts from the Weekly Standard
Republican Party platform, 2012?
Sad to say, neoconservatism is clearly the dominant foreign-policy ideology of the Republican Party. George H. Nash apparently has written that “We are all neoconservatives now.” And after the strategic and political masterstroke the neocons produced in Iraq, who could blame the Republicans for doubling down with them?
So sometimes it’s good to stroll by the Weekly Standard blog, just to see what those folks are thinking about.
Today, for example, it’s war with Russia. (Now there’s a “stimulus!”)
If the Republicans were smart, they’d get rid of these guys before it’s too late.
Tea Party Conservatism and the GOP
This morning, Politico’s Arena asks:
Is Tea Party conservatism a help or a hazard for Republicans seeking a return to power?
My response:
Let’s start with some clarity: “Tea Party conservatism” stands for several things, but it is not the caricature one often finds in the mainstream media, to say nothing of the left wing blogs. It is a movement with deep historical roots, drawing its name and inspiration from the Boston Tea Party of 1773. As with that event, taxes brought it to the fore — on Tax Day, April 15. But taxes are simply the most obvious manifestation of modern government run amok, insinuating itself into every corner of life. Trillions of dollars of debt for our children, out-of-control government budgets, massive interventions in private affairs — the list of wrongs is endless, and under Obama has exploded. He stands for nothing if not for making us all dependent on the government he has promised us. That’s not America. That’s a foreign vision, which over the centuries countless millions have fled, searching for freedom.
To be sure, the Tea Party movement has its fringe elements, as did the revolt against British tyranny, which the establishment of its day disparaged. So too does the Obama administration, some of whom have already resigned. The basic question, however, is what does the movement stand for? What are its principles? And on that, the contrast with the Obama vision is stark: However much confusion there might be on specific issues, which is to be expected, the broad principles are clear. The Tea Party movement stands for limited constitutional government. At its rallies, on hand-written sign after sign, that was the message repeatedly seen. These are ordinary Americans – Republicans, Independents, and even Democrats — who want simply to be left alone to plan and live their own lives. They don’t want “community organizers” to help empower them to get more from government.
But they do need to be organized to bring that about — to get government off their backs. And the Republican Party should be the natural vehicle toward that end — the party, after all, that was formed to get government off the backs of several million slaves. But today’s Republican Party is a mixed lot: Some understand those principles; but others, as in the NY 23 race, are all but indistinguishable from their counterparts in the party of Obama. The problem in NY 23 was not that a third party entered the race. Rather, the party establishment botched things from the beginning, by picking a nominee who properly belonged in the Democratic Party, as her pathetic last-minute endorsement indicated, and that’s why a third party entered the race — with a novice of a nominee who nearly won despite the odds against him.
The question, therefore, is not whether Tea Party conservatism is a help or a hazard for Republicans seeking a return to power? To the contrary, it is whether the Republican Party is a help or a hindrance to the Tea Party movement? It will be a help only if it returns to its roots. The mainstream media, overwhelmingly of the Democratic persuasion, will continue to push Republicans to be “moderate,” of course – meaning “Democrat Lite” — to which the proper response is: Why would voters go for that when they can get the real thing on the Democratic line? If Tuesday’s returns showed anything, it is that Independents, a truly mixed lot, are up for grabs; but at the same time, they are looking for leaders who promise not simply to “solve problems” but to do so in a way that respects our traditions of individual liberty, free markets, and limited government. When Republican candidates stand clearly and firmly for those principles, they stand a far better chance of being elected than when they temporize. That is the lesson that Republicans must grasp — and not forget — if they are to return to power.
Filed under: Government and Politics; Law and Civil Liberties
Wednesday Links
- Drop the neocons: “Republicans should take this opportunity to return to their traditional noninterventionist roots and throw their neoconservative wing under the bus.”
- John Samples on the national impact of this week’s elections: “The evidence suggests the Obama administration might be on the same path that led the Clinton presidency to the election of 1994. But there is an important difference: In 1994, the public had some faith in the alternative to Clinton and the Democrats in Congress.”
- Podcast: “Independents and the GOP Victories“
One Year Later
This morning, Politico’s Arena asks:
“Election 09: What’s the message?”
My response:
A note on NY 23, then to the larger message in yesterday’s returns. Already this morning we’re seeing an effort to spin the NY 23 outcome as a warning to Republicans and a hopeful sign for Democrats. Yet the striking thing about that outcome is how close a third-party candidate came in the face of opposition from the Republican establishment. And the ultimate outcome can doubtless be explained simply by absentee ballots, plus voters unaware of the last-minute developments in the race.
Thus, given those factors, the NY 23 outcome is perfectly consistent with returns in the rest of the country. (In fact, Conservative and Republican votes in that race total more than 50 percent.) And the message will not be lost on blue-dog Democrats. If the internal inconsistencies of ObamaCare did not trouble those Democrats before yesterday, they surely must now. The silence coming from the White House last night spoke volumes.
Gallup’s Conservatives and Libertarians
In today’s Washington Post, William Kristol exults:
The Gallup poll released Monday shows the public’s conservatism at a high-water mark. Some 40 percent of Americans call themselves conservative, compared with 36 percent who self-describe as moderates and 20 percent as liberals.
Gallup often asks people how they describe themselves. But sometimes they classify people according to the values they express. And when they do that, they find a healthy percentage of libertarians, as well as an unfortunate number of big-government “populists.”
For more than a dozen years now, the Gallup Poll has been using two questions to categorize respondents by ideology:
- Some people think the government is trying to do too many things that should be left to individuals and businesses. Others think that government should do more to solve our country’s problems. Which comes closer to your own view?
- Some people think the government should promote traditional values in our society. Others think the government should not favor any particular set of values. Which comes closer to your own view?
Combining the responses to those two questions, Gallup found the ideological breakdown of the public shown below. With these two broad questions, Gallup consistently finds about 20 percent of respondents to be libertarian.
The word “libertarian” isn’t well known, so pollsters don’t find many people claiming to be libertarian. And usually they don’t ask. But a large portion of Americans hold generally libertarian views — views that might be described as fiscally conservative and socially liberal, or as Gov. William Weld told the 1992 Republican National Convention, “I want the government out of your pocketbook and out of your bedroom.” They don’t fit the red-blue paradigm, and they have their doubts about both conservative Republicans and liberal Democrats. They’re potentially a swing vote in elections. Background on the libertarian vote here.
And note here: If you tell people that “libertarian” means “fiscally conservative and socially liberal,” 44 percent will accept the label.
Filed under: Cato Publications; General; Government and Politics; Political Philosophy
Obama’s Fall Offensive
In today’s Politico Arena, the editors ask:
White House Strategy: Will Obama’s effort to undermine critics undermine Obama instead? Is it overdue or overdone?
My response:
Obama is losing it. His increasing moves to marginalize his critics, richly detailed this morning at Politico, mark him as an amateur. America is not Chicago. Nor are those who oppose his agenda synonymous with the Republican Party. They’re far more numerous than that, and their numbers are growing.
Politics is one thing: “It ain’t beanbag,” Mr. Dooley noted. But scorched-earth politics is something else. It’s over the edge, like Nixon’s enemies list. It has no place in America, except in political backwaters like Chicago. (Personal note: In 1972 my wife and I served as Republican election judges in the first Mayor Daley’s Chicago. On election day, when we walked into the Hyde Park polling station at 5:30 a.m., the three Democratic judges looked at us in astonishment: “Are you real Republicans?” How else are you going to control the election?! Hamid Karzai has nothing on Chicago.)
As a practical matter, in our two-party system the Republican Party is the organizational antidote to this kind of abuse. But as the Wall Street Journal editorializes this morning, the party’s going to have to get its act together before that happens. It’s claim to be a party of principle has been seriously undermined in recent years by Republican officials at all levels of government. That leaves it to private individuals and organizations to call Congress and the administration on what they’re up to. And that’s why we too are in Obama’s cross-hairs. It won’t work — unless we let it happen. Thank you, Politico, for drawing these sad facts together in one place.
Hurting the Sick Is Not Good Politics
I was glad to see James Pinkerton engage my criticism of Louisiana Gov. Bobby Jindal’s (R) endorsement of federal price controls for health insurance. I was even more pleased to see that Pinkerton has his own blog devoted to developing a Serious Medicine Strategy.
If I understand Pinkerton, his argument is essentially: it’s all well and good for some unelectable wonk in the “citadel of libertarian thinking” to “uphold ivory-tower free-market purity” by opposing price controls. But Republicans need “art-of-the-possible solutions” to win elections, and 90 percent of the public support those price controls. “Everyone has a right to his or her principled position,” Pinkerton writes, “but the majority has rights, too.”
Two problems.
First, Pinkerton suggests that libertarians oppose price controls for reasons that only matter to libertarians, and therefore may be safely ignored. Problem is, price controls hurt people. Were Pinkerton to explore the merits of Jindal’s proposal, he would soon conclude that imposing price controls on health insurance taxes the healthy, reduces everyone’s health insurance choices, and creates even greater incentives for insurers to shortchange the sick. (Turns out that what Larry Summers said about price controls applies to health insurance, too.) As John Cochrane explains, those price controls also block innovative products that would provide more financial security and better medical care to the sick.
But Pinkerton’s advice for Republicans is, essentially: “Do what’s popular now, even if it hurts people and voters end up blaming Republicans for it later.” How is that a good strategy?
Second is this idea that “the majority has rights.” Majorities don’t have rights. Individuals have rights. For example, you have the right to negotiate the terms of your health insurance contract with the individuals at this or that insurance company. Majorities may attain power, but that’s the opposite of rights. (See the Bill of Rights.)
Finally, a couple of important odds and ends. Pinkerton suggests it is “un-libertarian” to be “pro-life,” or to “support the police, the military, and other upholders of public order,” or to “support government restrictions on…euthanasia.” Writing from the “citadel of libertarian thinking,” I can assure him he is wrong. Might I suggest Pinkerton read the relevant chapters from The Encyclopedia of Libertarianism? (The health care chapter is a page-turner!) Also, I did not “denounce Jindal” any more than Pinkerton denounced me. I criticized his ideas, and I respect the man.
(Cross-posted at Politico’s Health Care Arena.)
Filed under: Government and Politics; Health, Welfare & Entitlements
ACORN Challenge for the GOP
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.
Filed under: Government and Politics; Tax and Budget Policy
Bob McDonnell: The Modern Republican
This is from the Reagan administration’s deregulatory 1981 energy plan: “All Americans are involved in making energy policy. When individual choices are made with a maximum of personal understanding and a minimum of government restraints, the result is the most appropriate energy policy.”
Many modern Republicans claim devotion to Ronald Reagan’s ideas, but they often seem to forget about the “minimum of government” thing. The following points are from Republican Virginia gubernatorial candidate Bob McDonnell’s “More Energy, More Jobs” plan:
- “McDonnell was the chief sponsor of legislation creating the Virginia Hydrogen Energy Plan.”
- “McDonnell also supported grant programs for solar photovoltaic manufacturing, tax exemptions for solar energy and recycling property, and tax credits for solar energy equipment.”
- “In order to protect Virginia’s citizens from the skyrocketing wholesale prices of electricity seen in other states, McDonnell brought together all the necessary stake holders to re-regulate electricity in Virginia.”
- “Currently, Virginia is the second largest importer of electricity behind California. This is unacceptable.”
- “Bob McDonnell will establish Virginia as a Green Jobs Zone to incentivize companies to create quality green jobs. Qualified businesses would be eligible to receive an income tax credit equal to $500 per position created per year for the first five years.”
- “The Virginia Alternative Fuels Revolving Fund was established to assist local governments that convert to alternative fuel systems . . . Bob McDonnell will expand the purpose of this fund to include infrastructure such as refueling stations, provide seed money and aggressively pursue additional grants.”
- “Bob McDonnell will make Southwest and Southside Virginia the nation’s hub for traditional and alternative energy research and development…To assist with the attraction, building and operation of major energy facilities in Southside and Southwest Virginia, we will also support the establishment of the Center for Energy.”
- “To help Virginia universities gain access to federal stimulus money, as Governor, Bob McDonnell will establish the Virginia Universities Clean Energy Development and Economic Stimulus Foundation.”
- “As Governor, Bob McDonnell will leverage stimulus funding to incentivize individuals and businesses to conduct energy audits and encourage public private partnerships between small businesses and government.”
It’s true that McDonnell’s plan has some free market elements, and also that Ronald Reagan supported some wasteful energy boondoggles. However, the degree to which the modern Republican wants to micromanage and manipulate the energy industry is remarkable. McDonnell is almost setting out a Soviet five-year plan for a substantial part of the Virginia economy. For goodness sakes, he wants to treat Virginia like a separate country and try to fix the supposed problem that it is “importing” too much energy from other states!
It’s not just energy. Look at the top-down central planning ideas that McDonnell has for “creating jobs”:
Filed under: Energy and Environment; General; Government and Politics
Have the Democrats Outsmarted the Republicans on Health Care?
In their attempt to defeat Obamacare, Republicans have focused their criticism on the public option, painting it as the most objectionable feature of existing proposals. Senator Max Baucus, (D-Mont.), has now proposed a plan without the public option. This leaves the Republicans in an awkward position, especially since Baucus’s plan is projected to cost less than earlier proposals.
If Republicans oppose the Baucus plan, they surely risk the ire of voters who will be told during the mid-term elections, “The Republicans blocked a plan that would have covered the uninsured and reduced the deficit.”
The problem is, the public option was never the crucial issue; instead, it was the mandate to purchase insurance. Once government mandates insurance coverage, it gets to define what constitutes insurance, which means it can ban pre-existing condition clauses and the like. The mandate also”justifies” large subsidies for insurance, to avoid non-compliance with the mandate. So, an individual mandate, which the Baucus plan includes, implies a rapid takeover of the entire health care system by the federal government.
Something like the Baucus plan will pass. It will either cost far more than existing projections, if government administrators fail to impose the restrictions on reimbursements that generate the projected cost savings, or it will involve massive rationing of care.
The Democrats played it perfectly. The Republicans got sucker-punched.
C/P Libertarianism, from A to Z
Filed under: General; Government and Politics; Health, Welfare & Entitlements
‘No Child Left a Dime’
That’s my favorite placard from the Washington tea party protests on Saturday. No Child Left a Dime underlines perhaps the central concern of the protesters — the ongoing massive fiscal irresponsibility in Washington by both parties.
We’ve got deficits of more more than $1 trillion for years to come. Federal debt will approach World War Two levels within a decade. Even so, the Democrats are trying to ram through a $1 trillion health care expansion, and the head of the Republican National Committee, Michael Steele, is defending against any cuts to Medicare, the program that is the single biggest threat to taxpayers. People are marching not just because Obama and the Democrats are scaring their pants off, but because most Republicans in positions of power are spendthrifts as well.
The chart illustrates that no child will be left a dime because the government will have it all. This is the CBO’s “alternative fiscal scenario,” which essentially means the business-as-usual scenario if Congress doesn’t cut anything in coming years.
Note that the most rapidly growing box, the white box, is the program that Michael Steele doesn’t want to touch. The program is expected to grow by 6.3 percent of GDP by 2050. In today’s money, 6.3 percent of GDP is about $900 billion a year in added spending. So it’s like Steele doesn’t see anything wrong with tomorrow’s young families forking over an additional $900 billion a year in taxes on this one program, or about $7,700 a year for every American household.
It’s worse than that. The biggest box on the chart by 2050 is interest on the government debt, and by far the biggest contributor to the growth in interest is Medicare. So including interest, Michael Steele’s (ridiculous) Medicare position is sort of like supporting a more than $10,000 tax hike on every young family for this one program.
Come on Republicans, you can do better than that. How about starting simply by proposing some of CBO’s modest and commonsense Medicare reforms like raising deductibles?
(By the way, interest costs rise in coming years because of an excess of spending, not a shortage of revenues. Under this CBO scenario, all current tax cuts are extended, and yet federal revenues still rise as a share of GDP over time above the historical norm of recent decades).
Filed under: Health, Welfare & Entitlements; Tax and Budget Policy
The DNC’s Pure Uninformed Demagoguery
The other day, Sarah Palin cited my work in an oped for the Wall Street Journal. So when the Democratic National Committee savaged her for it, ABCNews.com asked me for comment. Here’s an excerpt from George Stephanopoulos’ blog:
“Instead of poll-driven ’solutions,’ let’s talk about real health-care reform: market-oriented, patient-centered, and result-driven,” wrote Palin. “As the Cato Institute’s Michael Cannon and others have argued, such policies include giving all individuals the same tax benefits received by those who get coverage through their employers; providing Medicare recipients with vouchers that allow them to purchase their own coverage; reforming tort laws to potentially save billions each years in wasteful spending; and changing costly state regulations to allow people to buy insurance across state lines.”
Cannon, the Cato expert referenced by Palin, has not had any direct contact with the former Alaska governor or any of her advisers.
He did, however, come to her defense on the Medicare issue.
‘Vouchers would not make seniors less secure, it would make them more secure,’ Cannon told ABC News. ‘Everyone agrees that Medicare cannot go on spending as much money as it does now. The voucher idea allows individual consumers to make their own decisions about what they need and what they don’t need.’
‘Giving Medicare seniors a voucher is the most rational, the most humane way to contain Medicare spending,’ he added.
Asked about the DNC’s charge that Palin’s proposal would leave seniors with pre-existing conditions vulnerable, Cannon, the director of health policy studies at Cato, called it ‘pure uninformed demagoguery.’
Cannon says that under proposals he has developed, bigger vouchers would be given to people with pre-existing conditions as well as to people with low incomes.
Actually, I think what I said was that DNC communications director Brad Woodhouse was engaging in pure ignorant demagoguery. But whatever.
The DNC is even running an ad claiming that Republicans are trying to “cut” and “kill” Medicare, presumably with vouchers. Never mind that President Obama proposes to “cut” (i.e., slow the growth of) Medicare spending too.
If Republicans were smart — hey, where are you going? — they would be running ads that say:
President Obama wants government bureaucrats to decide whether seniors get health care. Republicans are fighting to control health care costs and preserve seniors’ ability to make their own health care decisions and choose the benefits that they value most. Support Medicare vouchers!
For more on reforming Medicare the right way, click here.
Obama’s Health Care Speech in Plain English
Hell of a speech last night, eh? Here are a few of my favorite gems.
Under this plan, it will be against the law for insurance companies to deny you coverage because of a pre-existing condition.
Translation: I, Barack Obama, ignoring thousands of years of failed price-control schemes, will impose price controls on health insurance. I will force insurers to sell a $50k policies for $10k. What could go wrong?
We were losing an average of 700,000 jobs per month.
True. And your employer mandate would kill hundreds of thousands of low-wage jobs that would never come back.
They will no longer be able to place some arbitrary cap on the amount of coverage you can receive in a given year or a lifetime. We will place a limit on how much you can be charged for out-of-pocket expenses…. And insurance companies will be required to cover, with no extra charge, routine checkups and preventive care.
Translation: Boy! Are we going to force you to buy a lot of coverage!
I will make sure that no government bureaucrat or insurance company bureaucrat gets between you and the care that you need.
…except for the bureaucrats I proposed to put between you and your doctor.
Some… supported a budget that would have essentially turned Medicare into a privatized voucher program. That will never happen on my watch. I will protect Medicare.
Translation: I will never let seniors control their own health care dollars. I will never give up Washington’s control over your health care decisions. Mmmmuuuuhahahahahaha!
…there are too many Americans counting on us to succeed.
Translation: There are too many lobbyists counting on me to succeed: drug-industry lobbyists, health-insurance lobbyists, physician-cartel lobbyists, large-employer lobbyists, hospital lobbyists….
It’s a plan that asks everyone to take responsibility for meeting this challenge – not just government and insurance companies, but employers and individuals.
Translation: I’m going to tax the hell out of you, but I don’t want you to notice how much I’m going to tax you. So I’m going to tax employers and insurance companies, and they’re going to pass the taxes on to you. Most of the taxes won’t even show up in the government’s budget. It’s all very clever. No, seriously – just ask my economic advisor Larry Summers.
It’s a plan that incorporates ideas from Senators and Congressmen; from Democrats and Republicans – and yes, from some of my opponents in both the primary and general election.
Translation: I may have savaged your ideas in the past, called them irresponsible…risky…dangerous…whatever. But that wasn’t about principle; I just wanted to become president. Now that I’m president, I need a win. So you’ll help me, won’t you? Hey, where’s Hillary?
Summing Up Obama’s Health Care Address
Cato health care experts dissected President Obama’s address Wednesday night, providing live commentary throughout the speech.
Overall impressions:
Michael D. Tanner: Can’t see this as a game-changer. I would give him an ‘A’ on delivery, but at best a ‘C’ on substance. There were surprisingly few details and very little new.
Patrick Basham: Strikingly political/partisan rather than statesmanlike speech. Obama chose to pressure Republicans to support his plan rather than attempt to persuade them to do so. He risks a another wave of (effective) opposition from conservative talk radio & cable TV.
Michael F. Cannon: Translation: My health plan cannot work if you are free to make your own decisions.
Filed under: General; Government and Politics; Health, Welfare & Entitlements
Steele and the Left-Wing Republicans
One of the most disturbing things about the current health care debate is that some Republicans are positioning themselves as defenders of Big Government Medicare and against efforts to trim the program’s costs.
Yet the taxpayer costs of Medicare are expected to more than double over the next decade (from $425 billion in 2009 to $871 billion in 2019), and the program will consume an increasing share of the nation’s economy for decades to come unless there are serious cuts and reforms. Even the Obama administration talks about “bending the cost curve” to slow the program’s growth.
Yet Republican National Committee chairman, Michael Steele, takes to the Washington Post today to defend Medicare against any cuts, while at the same time criticizing the Democrats as “left-wing ideologues:”
- “Under the Democrats’ plan, senior citizens will pay a steeper price and will have their treatment options reduced or rationed.”
- “Republicans want reform that should first, do no harm, especially to our seniors.”
- “We also believe that any health-care reform should be fully paid for, but not funded on the backs of our nation’s senior citizens.”
- “First, we need to protect Medicare and not cut it in the name of ‘health-insurance reform.’”
- “Reversing course and joining Republicans in support of health care for our nation’s senior citizens is a good place to start.”
Steele uses the mushy statist phrasing “our seniors” repeatedly, as if the government owns this group of people, and that they should have no responsibility for their own lives.
Fiscal conservatives, who have come out in droves to tea party protests and health care meetings this year, are angry at both parties for the government’s massive spending and debt binge in recent years. Mr. Steele has now informed these folks loud and clear that the Republican Party is not interested in restraining government; it is not interested in cutting the program that creates the single biggest threat to taxpayers in coming years. For apparently crass political reasons, Steele defends “our seniors,” but at the expense of massive tax hikes on “our children” if entitlement programs are not cut.
Filed under: Government and Politics; Health, Welfare & Entitlements
Jeff Flake vs. the Spending Robots
Rep. Jeff Flake of Arizona is one of the very few fiscal policy heroes in Congress. Last night, he was doing what he does best — offering amendments to cut funding from a wasteful appropriations bill moving through the House.
Flake tried to strike spending earmarks slipped into the bill by both Republicans and Democrats. Watching the action on C-SPAN, I was struck by what a bunch of robots the big spenders defending the bill were. They said things like “this project is very important,” “it will help people,” and “it has a rate of return of 30-to-1 for every tax dollar spent.”
Flake pointed out the simple logical flaws in the spenders’ arguments. If an earmarked project is so important, why doesn’t it get funding through the normal competitive process? If a project has such a high return, wouldn’t private investors swoop in to earn the big profits? The “high return” claim is a commonly used gambit by big-spending politicians. Economist Martin Sullivan calls it the “liberal Laffer curve.”
Anyway, the spending robots listened politely to Flake, then they focused back in on their staff-prepared bullet points and continued with their self-interested drivel about how the nation’s fate rested on federal aid for the Elvis museum back in their hometown, or whatever their particular project was.
Flake presented some interesting statistics on the earmarks in the agriculture appropriations bill being considered last night. As shown in the chart below, two-thirds of the earmarks go to a small, exclusive club within the House of those on the appropriations committee, committee chairs, and party leadership. He characterized the appropriations process as a “spoils system,” which is evocative of government corruption of the past, such as Tammany Hall.
But unlike the original Tammany Hall, today’s spoils system is not party-based. Instead, it’s run by an elite and bipartisan group of spending robots within Congress, who pose as representatives of the people when they travel outside the beltway. As Flake implied, it’s odd that the great majority of members and their constituents, who get the short end of the stick from the spoils system, don’t revolt.
The Failure of Do-Nothing Policies
A news story from today in a slightly alternate universe:
Jobless Rate at 26-Year High
Employers kept slashing jobs at a furious pace in June as the unemployment rate edged ever closer to double-digit levels, undermining signs of progress in the economy, and making clear that the job market remains in terrible shape.
The number of jobs on employers’ payrolls fell by 467,000, the Labor Department said. That is many more jobs than were shed in May and far worse than the 350,000 job losses that economists were forecasting.
Job losses peaked in January and had declined every month until June. The steep losses show that even as there are signs that total economic activity may level off or begin growing later this year, the nation’s employers are still pulling back.
White House press secretary Robert Gibbs said, “President Obama proposed a $787 billion stimulus program to get this country moving again. He tried to save the jobs at GM and Chrysler. But the do-nothing Republicans filibustered and blocked that progressive legislation, and these are the results.”
House Speaker Nancy Pelosi said at a press conference, “We begged President Bush to save Fannie Mae, Merrill Lynch, Bank of America, AIG, the rest of Wall Street, the banks, and the automobile industry. We begged him to spend $700 billion of taxpayers’ money to bail out America’s great companies. We begged him to ignore the deficit and spend more money we don’t have. But did he listen? No, he just sat there wearing his Adam Smith tie and refused to spend even a single trillion to save jobs. And now unemployment is at 9.5 percent. I hope he’s happy.”
Democrats on Capitol Hill agreed that the “do-nothing” response to the financial crisis had led to rising unemployment and a sluggish economy. If the Bush and Obama administrations had been willing to invest in American companies, run the deficit up to $1.8 trillion, and talk about all sorts of new taxes, regulations, and spending programs, then certainly the economy would be recovering by now, they said.
Filed under: Finance, Banking & Monetary Policy; Government and Politics; Tax and Budget Policy; Trade and Immigration
Trouble in Obamaland
The Washington Post reports on a recent survey:
The poll found little change in underlying public attitudes toward government since the inauguration, with slightly more than half saying they prefer a smaller government with fewer services to a larger government with more services. Independents, however, now split 61 to 35 percent in favor of a smaller government; they were more narrowly divided on this question a year ago (52 to 44 percent), before the financial crisis hit.
The Obama team probably assumes people who identify as Republicans will disapprove of Obama’s actions sooner rather than later. Independents, however, are crucial to keeping up his public approval and thereby getting what he wants out of Congress. On the size of government — as well as on many specific policy issues — Obama is now running counter to public opinion.
This may be the beginning of the end of the beginning.
GOP 99% Socialist
As I note in my New York Post op-ed today, Republicans are fond of implying that President Obama is a big-spending socialist. But the House GOP recently offered a spending cut plan that was able to find savings worth less than one percent of Obama’s budget.
As Tad DeHaven and Brian Riedl have also pointed out, the GOP spending reform effort is rather pathetic. It proposed specific annual budget cuts of about $14 billion per year.
Consider that the center-left budget wonks at the Brookings Institution put their heads together a few years ago and came up with a “smaller government plan” that proposed about $342 billion in annual spending cuts (by 2014). The Brookings authors note:
These cuts are achieved by reducing government subsidies to commercial activities ($138 billion); by returning responsibility for education, housing, training, environmental, and law enforcement programs to the states ($123 billion) . . . by cutting entitlements such as Medicaid, Social Security, and Medicare ($74 billion); and by eliminating some wasteful spending in these entitlement programs ($7 billion).
Thus, the Brooking’s scholars found cuts more than twenty times larger than the House GOP leadership cuts, and Brookings proposed its plan back when the deficit was about one-fifth of the size it is today. (Note that both the Brookings and GOP plans would also put a cap on overall nondefense discretionary spending, in addition to these specific cuts).
My point in the New York Post piece is that the GOP needs to challenge Obama’s big spending agenda at a more fundamental level. They need to do some careful research, pick out some big spending targets, and go on the offense. Why not propose to eliminate the Departments of Education and Housing and Urban Development? Why not sell off federal assets, such as the Tennessee Valley Authority, in order to help pay down the federal debt? Why not open up the U.S. Postal Service to competition?
Obama won’t agree to these reforms at this point, but they would hopefully open a serious national debate about reforming our massive and sprawling federal government. Ronald Reagan in 1980 and the congressional Republicans in 1994 didn’t win by splitting hairs with the Democrats over 1% of spending. They offered a more fundamental critique.
At least, GOP leaders need to offer up spending reforms as bold as those of the Brookings Institution.
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