Where Have All The Deficit-Cutters Gone?

From time to time, both Republicans and Democrats express concern about the out-of-control accumulation of federal debt and the annual federal budget deficit.  Republicans raise the issue when they want to get elected.  Democrats raise the issue when they want to stop the GOP from cutting taxes.

But in reality, and for years now, no one in either party has done anything meaningful about the ever-growing national debt.

debt-limit-history-data-for-web-2013-updated-rjr-chart120largeConsider what’s going on now.  Republicans have been laboring over a tax bill for months, and are supposed to get it through Congress and to President Trump this week.  Of course, tax relief is an easier political sell, as rates paid by various constituencies, and backroom deals, get cut.  But where are we on spending?  Well, the House Republicans apparently want to “temporarily” extend spending for most agencies at current levels, with a $650 million increase in defense spending.  In the Senate, where Democrats hold the balance of power because of the filibuster, Democratic leaders say that we need to have equivalent increases in defense and non-defense spending.  Oh, and there’s this, too:  we’re facing another one of those stupid self-inflicted shutdown points, where some government activity will stop unless a spending bill is signed into law by Friday.

So let’s take stock here.  The House Republicans want to hold spending steady, except for an increase in defense spending — i.e., increase spending.  The Senate Democrats want to increase defense and non-defense spending — i.e., increase spending.  And our elected representatives have conveniently maneuvered themselves into a position where they can say that they need to cut a deal that will no doubt increase spending in order to avoid a partial government shutdown.  And by the way, there is absolutely no sign of the kind of thoughtful review of the thousands of ongoing government programs and subsidies and agencies to determine whether they are truly needed and should be modified or eliminated outright — which is what truly committed and rational deficit-cutters would be trying to accomplish.

Gee . . . I wonder why Congress’ credibility with American voters is so low?

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In Defense, Recognizing “Fiscal Reality”; In Domestic Spending, Not So Much

Yesterday Defense Secretary Chuck Hagel unveiled plans to reduce the size of the U.S. military. The plans were motivated, Hagel said, by the need to recognize “the reality of the magnitude of our fiscal challenges.”

Hagel’s plan includes cutting the size of active duty forces, changing pay structures, benefits, and housing allowances, eliminating certain weapons programs, and potentially closing military bases. Obviously, the proposals will need to be carefully considered to ensure that we are fair to the women and men who have served so capably in our military, but I have no problem with the concept of reducing the footprint of our military and modifying its focus. The world has changed since our forces were actively fighting in Iraq and Afghanistan; those changes inevitably will affect our defense planning. If bases or weapons programs are no longer needed, they should be ended, and our focus should be concentrated on the weapons programs and forces we truly need to respond to the threats posed by the current, fractured, dangerous world.

I am struck, however, by the difference between our approach to defense spending and our approach to other parts of the federal budget. The “reality of the magnitude of our fiscal challenges” obviously doesn’t exist just with respect to the military budget, it exists with respect to every dollar spent by the federal government. Where is the careful evaluation of whether other federal programs are no longer needed, as the Pentagon apparently has decided with respect to the U-2 spy plane? If we are willing to cut 80,000 active duty personnel from the military rolls — about 15 percent — why should we hesitate to cut a similar percentage from the non-military federal government payroll? If we are willing to close military bases, why shouldn’t we end federal programs, like those that fund advertisements to use your seat belt, that have long since served their purpose? Of course, there has been no such reevaluation of the true need for the morass of seemingly permanent federal programs and federal employees in the non-defense area.

During his campaigns and during his presidency, President Obama has talked a good game about fiscal prudence, but the actual evidence of his commitment to rational federal spending and deficit control has been lacking. Now his Defense Secretary has recognized the “reality of the magnitude of our fiscal challenges” and has used that reality to justify proposed reductions to the arm of the federal government that protects us from peril. If President Obama doesn’t use the “reality of the magnitude of our fiscal challenges” to make similarly significant reductions in domestic spending, he will lose whatever remaining credibility he may possess on budget control issues.

You can’t cut the jobs of soldiers and sailors, but continue to spend like a drunken sailor on every federal program we’ve inherited from the New Deal onward.

Why I’m Voting For Mitt Romney And Paul Ryan

On Tuesday, I’ll walk in to the polling booth at the church in New Albany where we vote and touch the screen for Mitt Romney and Paul Ryan.  I recognize that that decision won’t come as much of a surprise for loyal readers of our family blog.  I think it’s only fair to explain why, if only to add one more person’s perspective to the national conversation about this election.

In my view, the most important issue confronting our country is our federal deficit and national debt — the latter of which has passed the $16 trillion mark.  I care about other issues, of course, but I view our debt as the most fundamental issue of all because it involves basic concepts of national sovereignty.  Our debt is so large, and has existed for so long, that we tend to think of it as a kind of abstraction . . . but every dollar of that debt is a real obligation of our country, reflected in an instrument sold by the U.S. treasury to a willing buyer who will be paid a specified interest rate.  With each additional bit of borrowing, we give those people from whom we are borrowing leverage that may allow them to dictate terms — at first, the terms of the debt instruments, by insisting on higher interest payments, and then eventually the terms of how our government operates, by dictating whether we need to adopt austerity measures in how our country operates if we hope to obtain additional loans.  At that point, our national sovereignty is at stake.

We know this to be the case, because over the past few years we have seen it occur in Iceland and Ireland, and in Greece and Portugal.  Those countries borrowed irresponsibly and saw the interest rates on their debt instruments rise as investors became increasingly concerned that the debts might not be repaid and demanded higher rates as the price for accepting that risk.  And, ultimately, outside forces — the International Monetary Fund, European Union bankers, and others — went to each of those formerly sovereign nations and told them what they needed to do if they hoped to continue to borrow money.  Those governments accepted the conditions and agreed to the austerity measures imposed by outsiders because they had no choice.

I don’t want to see that happen here — yet, over the last four years, we have seen the United States move down that very same path, with annual trillion-dollar deficits that have taken our total debt past the unimaginable sum of $16 trillion.  We also passed a significant milestone on that road to perdition when our national credit rating was downgraded.  I don’t think that downgrade has received the attention it deserves.  Imagine!  Credit rating agencies presuming to raise questions about the credit of the leader of the free world, a country so stable that its currency gave rise to the now-antiquated phrase “sound as a dollar.”  But the ratings agencies are so presumptuous, and we are kidding ourselves if we think our many lenders aren’t also carefully considering our credit-worthiness.

I don’t want to wake up one morning and see that our political leaders are having to dance to the tune called by teams of grey-suited bankers from the IMF, or China, or Germany.  If that happens — and if we continue to rack up trillion-dollar annual deficits, it inevitably will — we shouldn’t kid ourselves about what it would mean.  Does anyone think federal funding of NPR or contraceptives, to identify only two of the issues being discussed during this campaign, would survive under the austerity measures forced upon us by creditors?  Does anyone think the bankers would hesitate to require fundamental changes in entitlement programs like Social Security and Medicare?  Does anyone think our country could continue to function as a world leader, and a force for good, as a debtor nation struggling to deal with its overwhelming credit problems?

I recognize this is a dire scenario, and some believe it just can’t happen here.  My response is to look at what has happened in Europe, to countries that have just been ahead of us on the irresponsible fiscal policy curve.  Their experience shows, I think, that it can happen here — and it will, if we don’t do something about it.  I’m too proud of this country and what it has accomplished to let that happen without trying to change course.

I don’t think President Obama places a high priority on grappling with our deficit and debt problems.  He’s talked about them, but his actions speak louder than his words.  He continues to propose budgets that would result in trillion-dollar debts for years into the future, and continues to propose the creation of new federal agencies and federal programs as the solution for every problem.  He hasn’t used the bully pulpit of the presidency to encourage Congress to act.  I’ve seen nothing from President Obama to indicate that his performance over the next four years on this crucial issue of national sovereignty would be any different than his performance over the past four years.

Mitt Romney and Paul Ryan, on the other hand, do focus on the issue of our deficit and our debt and have proposed approaches.  I think they understand the fundamental nature of the problem and would make working with Congress to address the issues in a meaningful way their top priority.  I want someone in the White House who will tackle the debt problem, not let us drift into catastrophe.  That’s why I’m voting for Mitt Romney and Paul Ryan.

Penile Pumps And Public Spending

A story has been rolling around the internet about how, since 2001, Medicare has spent $240 million — i.e., almost a quarter of a billion dollars — on penile pumps for elderly men who are experiencing erectile dysfunction.  The Centers For Medicare and Medicaid Services Local Coverage Determination states that, for Medicare to pay for such a device, the “patient’s medical record must contain sufficient documentation of the patient’s medical condition to substantiate the necessity for the type and quantity of items ordered.”

This is the kind of story that, obviously, can become the subject of jokes and double entendres — but I think the jollity just obscures a deeper, serious question.  When the federal government pays for medical care, what is it supposed to be paying for?

Is it simply paying for whatever care is necessary to keep someone alive?  Is it paying for a level of health necessary to achieve a certain quality of life?  Or, is it obligated to pay for whatever drugs, devices and other forms of treatment that the covered person thinks he or she needs to keep their health as close to 21-year-old perfection as it can possibly be?

If it is the first option, then we are going to spend a lot less — but some governmental agency is going to be making some brutal baseline decisions.  If it is the second option, then bureaucrats are going to be making uncomfortable judgments about what constitutes a “reasonable” quality of life.  And if it is the third option, our debt-ridden nation is going to be spending millions of dollars on things like penile pumps for aging men who think their bedroom performance level should be as close as possible to what it was when they were horny 20-year-olds.

The comical penile pump spending story, therefore, is worth pondering as an example of the kinds of questions that are raised when the federal government becomes a primary payer for health care.  I’m not quite sure where I come out on the three options described above — but I do think it is ludicrous that the federal government has spent nearly $250 million on penile pumps in the last decade.

HUD Dud

President Obama, and many other others, have pointed out that those saying we can balance the budget solely by eliminating “waste, fraud and abuse” are taking a phony approach to fiscal discipline.  However, that doesn’t mean that “waste, fraud and abuse” doesn’t exist — a fact proven by yesterday’s Washington Post piece on spending by HUD on community housing projects.

The Post story found that in recent years more than $400 million in HUD money has been spent on stalled or abandoned projects.  In some cases, money was loaned and projects never got underway.  Many of the people to whom money was given had no experience in construction or had questionable qualifications for getting the federal booty.  The overall picture painted by the article suggests that our tax dollars were spent with little concern for how they would actually be used, and then with little attention to how they were actually being spent.

I recognize that $400 million is only a tiny drop in our colossal deficit bucket — but $400 million is still a lot of money in my book, and the Post article looks at only one program administered by one agency.  What would we find if every federal program were subjected to similar scrutiny?

I’m not surprised by the waste found in the HUD housing efforts, nor am I surprised by the attitude reflected in the quotes from government officials who are involved in this poorly run program.  One person who manages HUD money says we need to reduce the risk by enacting “basic standards” — which suggests that hundreds of millions of dollars have been spent without even “basic standards” that apply.  Could that possibly be true?  The Post quotes another government official, Mercedes Marquez, HUD’s assistant secretary for community planning and development, says “We can do better and we will.”  But why on Earth should we believe her?  Isn’t it safe to assume that every HUD official since that agency was formed has said pretty much the same thing?

This is an example of where governments and businesses diverge.  In any business, a division that failed to insist on basic accountability and frittered away $400 million would be shut down — period.  Why shouldn’t we take the same approach with this badly administered program?

Cowboy Poets And Harry Reid’s Passions

Senate Majority Leader Harry Reid has the grim outward demeanor of an undertaker.  But internally, beneath the dull-as-dishwater exterior, he burns with blazing passion about certain topics — one of which apparently is cowboy poetry.

Yesterday, in a speech on the Senate floor, Reid railed against the”mean-spirited” budget proposed by House Republicans.  As an example of such hardheartedness, he lamented that passage of the Republicans’ budget proposal would eliminate National Endowment for the Humanities funding for an annual cowboy poetry festival in Elko, Nevada.  Reid believes that the National Cowboy Poetry Gathering, and similar programs, create jobs.

Reid’s citation of funding for the cowboy poetry festival epitomizes the challenges involved in bringing our out-of-control federal budget back into balance.  There are countless examples of locally targeted federal funding in the budget, and every one probably has its ardent congressional defenders.  The question is not whether cowboy poetry is good or bad, but whether our federal government can afford to subsidize every local festival, every poorly conceived, over-budget weapons program, and every geriatric drug purchase — among countless other federal departments, programs, and projects.

I applaud those hardy souls who feel the poetic muse around the campfire on the open range, and people who want to celebrate their doggerel.  But getting our “fiscal house in order” will require tough choices.  If we can’t make the easy decision to cut federal funding for Elko’s cowboy poetry festival, and similar programs, we have no chance of closing our trillion-dollar budget gap.

 

Another Demonstration Of Why Balancing The Federal Budget Is Such A Huge Challenge

ABC News had an interesting story today that demonstrates why cutting spending and balancing the federal budget is so difficult.

The story is based on an email sent out by an unnamed Democratic staff member on the Senate Appropriations Committee subcommittee that will address the Labor and Health and Human Services budget.  The email set up a meeting with hundreds of lobbyists who support programs that fall within that budget and encouraged them to band together to oppose cuts to that budget.  The article quotes the email as saying that “[o]ne thing everyone should be able to agree on now is that a rising tide lifts all boats,” and that a higher budget allocation “improves the chances for every stakeholder group to receive more funding.”

Don’t you just love the phrase “stakeholder group”?  It aptly captures the reality of the out-of-control federal budget, where every bloated federal program is strongly supported by some interest group that has a huge stake in continuing to get funding for their pet program.  And now, thanks in part to the efforts of committee staffers who in reality are beholden to those interest groups rather than to voters, legions of K Street lobbyists will be hired and funded and encouraged to band together to stoutly resist the funding cuts that are essential to restoring some form of fiscal sanity to the federal budget.  The mind reels at the prospects of legions of lobbyists descending on Capitol Hill and of the legislative logrolling, campaign contributions, and stealthy cloakroom deals that will define the budgeting process during this Congress as a result.

Those of us who are interested in reducing the budget deficit and the federal debt shouldn’t kid ourselves.  The people and entities who are dependent on federal programs are highly motivated, well-funded, and will do whatever they can to see that efforts to cut spending are blunted and frustrated at every turn.