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.

Consider 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?

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.

Please, Not More “Stimulus”!

Tomorrow President Obama gives his State of the Union speech.  Advance stories indicate that the speech will focus on the economy — no surprise there! — and that the President will call for more government “investment” in science, education, and innovation.

“Investment” is, of course, just a code word for more government spending.  The only reason the word “stimulus” isn’t used any more is that it has acquired deadly connotations for American voters, who recognize that the initial “stimulus” package was a leaden failure that grossly increased the federal debt without producing much in exchange. Doesn’t “investment” in “education” and “science” sound an awful lot like using our tax dollars to pay for more government jobs?  And as for “investment” in “innovation,” is there really anyone out there who thinks that members of Congress or government bureaucrats could distinguish true innovation from a cracked pumpkin?

We may find out tomorrow that the President has a great plan — but until then, color me skeptical.  Whenever I hear the argument that the way out of our ongoing recessionary doldrums is still more government spending, I have the same horrified and anguished reaction as the poor, lost soul Richard depicted on the wonderful bit of “kid art” accompanying this posting.

Federal Pay Freeze

President Obama has called for a two-year freeze on the salaries of some federal workers.  If the proposal is approved by Congress, it is estimated that it will save $5 billion during that two-year period.  Unless a freeze is approved, federal workers would automatically get a pay increase (!) as a result of a 1990 law.

Everett Dirksen

Republicans have said that the President is just hopping on board a proposal that Republicans made months ago, and others are criticizing the pay freeze as a drop in the bucket when compared to the budget deficit.  I don’t care who gets credit, I’m just glad to see that the President is focused on deficit reduction as a worthy goal, and I hope Congress agrees.  And as for the size of the savings, I’m hoping that the pay freeze proposal will be the first of a long series of deficit reduction initiatives that will include things like actually cutting the head count in the federal workforce, eliminating unnecessary agencies and departments, lopping off programs that we can no longer afford, eliminating ill-advised subsidies, limiting the size of congressional staffs, restricting congressional travel, and many, many others.  (I’m simply mentioning these as examples; I think there are lots of places where cutting should occur.)

When it comes to deficit reduction, I’m a big proponent of the wise words attributed to former Senator Everett Dirksen:  “A billion here, a billion there, and pretty soon you are talking about real money.”  We shouldn’t throw up our hands because no one bit of belt-tightening will result in a balanced budget.  Instead, the focus should be on taking a number of spending reduction steps that will cumulatively have that ultimate desired effect.

On A Possible Republican Sweep, And The Political Lessons To Be Learned From The Tale Of Brave Sir Robin

If the polls are to be believed — and that remains an open question in my mind — Republicans are likely to win the House of Representatives and have a long shot chance of assuming control of the Senate.  If that occurs, voters will find out whether the Republicans mean what they have been saying during the campaign or whether they will instead be like Brave Sir Robin.

Remember Brave Sir Robin from Monty Python and the Holy Grail?  He was the publicity-hungry knight who desperately wanted to join in the search for the Grail.  He left on his quest accompanied by a minstrel and a cadre of musicians who sang constantly about his adventures.  And yet, when the going got tough and the giant three-headed knight awaited, Brave Sir Robin made no attempt to fight.  As his minstrel sang:

When danger reared its ugly head
He bravely turned his tail and fled
Yes, brave Sir Robin turned about
And gallantly he chickened out
Bravely talking to his feet
He beat a very brave retreat
Bravest of the brave, Sir Robin

I’m tired of politicians who talk a good game but don’t deliver.  I’m hoping that, if Republicans in fact sweep to victory this November, they will indeed slash spending, reduce the deficit, and restore fiscal sanity to our federal government.  If they instead act like Brave Sir Robin, I think that will be it for me and the Republicans.  I’ll have to start looking for Sir Lancelot elsewhere.

Low Standards

The White House has issued a report stating that the stimulus spending, so far, has occurred on time and under budget, with fewer claims of outright fraud and abuse than some people expected.  The report also argues that the stimulus spending has been an economic success story.

There is no need to comment on the latter point, because the economic statistics and the common experiences of average Americans tell the tale.  What I find humorous about this latest report is the suggestion that we should be grateful that the process of spending hundreds of billions of dollars was “relatively free” of claims of outright fraud.  Well, thank goodness!  We’ve managed to avoid rampant criminal behavior!  Should that really be the standard by which we judge the effectiveness of a federal spending spree that has contributed mightily to enormous budget deficits and a sickening rise in our national debt?

Fool Me Once, Shame On You, Fool Me Twice, Shame On Me

The 2010 mid-term election is less than three months away.  Polls indicate that the President’s approval rating is sinking, but the President won’t be on the ballot this year.  Instead, we will be voting for Senators and Representatives — and polls indicate that the public is very dissatisfied with Congress.   My brother-in-law recently declared that he has decided to vote against whoever has been in office for the last two years, because he is so fed up with how things are going.  I think that view is shared by many here in central Ohio.

What does this viewpoint mean for the Republican and Democratic parties?  Because there are more Democrats than Republicans in Congress right now, any anti-incumbent trend necessarily will work in favor of Republicans.  But Republicans shouldn’t kid themselves that such voters are passionate advocates of the Republican Party.  For people (like me) who are concerned about government spending and government debt, the memories of fiscal irresponsibility when Republicans controlled Congress and the White House are too fresh to be forgotten.  If enough Republicans are elected for that party to assume control of Congress, they won’t be drawing on any reservoir of trust in their first months in office.  If Republicans win and go back to their irresponsible ways, they will be the subject of even more fury than is now being directed at Democrats.

Polling data, confrontations at town hall meetings, and the results of interim elections show that many voters do not support more massive deficit spending, “stimulus” legislation and unending government bailouts.  Nevertheless, Democrats continue to pursue that failed agenda.  The recent approval of a bill to spend billions more in borrowed money to bail out laid-off teachers and overspending state governments confirms that Democrats in Congress aren’t listening to the public, or are listening and just don’t care because they think they know better than voters do.  Does anyone doubt that, if Democrats are returned to office, they will continue to follow their high-spending agenda?  If voters are uncomfortable with the skyrocketing federal debt and the concept of trillion-dollar deficits stretching well into the future, why would they want to vote for members of a party who seem oblivious to that concern?

At bottom, voters like me want our elected representatives to roll up their sleeves, tackle the deficit and spending problems head-on, and make some hard choices.  Democrats have shown they will not do so.  Republicans are the only current alternative.  But because both parties have performed so dismally when they were recently in control, there is enormous mistrust and frustration with both parties.  This is something Republicans really need to understand — if they win come November they had better deliver, or there will be hell to pay.

A Brief Response

We’ve had some good back-and-forth discussions on the blog lately about political issues, from UJ and some commenters, including my friend Doug.  I like a good, civil discussion as much as the next person; in fact, I wish we had more discussion in this country, not less.  That is why I think the internet and blogs are such terrific developments.  We’d all be better served if more Americans aired their views and respectfully noted their disagreements.

I don’t know where the fellow UJ identified got his information about what Republicans would do if they achieve a majority in Congress.  I certainly don’t support the impeachment of the President and haven’t heard anyone talking about that topic.  I can’t think what he has done that would justify impeachment.  The fact that I (and others) disagree with his approach to the federal budget obviously isn’t an impeachable offense.  I also don’t think anyone is eager to shut down the federal government.  That said, however, I do think there are many people, including Republicans, who think we would be better served by significantly cutting spending and repealing the “health care reform” legislation that was enacted earlier this year.

In my view, the biggest issue we face is our federal debt.  Today the Congressional Budget Office released an interesting and very troubling report about the level of our debt and the likely effects of the debt if we don’t do something about it — now.  I expect that we all agree that something needs to be done about the deficit and the federal debt.  The question is, what?

The CBO report outlines the two obvious options — raise revenues, decrease spending, or some combination of the two.  I have no objection to raising revenue as part of the solution, but I think that personal and corporate income taxes are high enough already.  The top brackets already pay about one-third of their income as federal income taxes; they also pay federal Social Security taxes, state income taxes, property taxes, local income taxes, sales taxes, and other taxes on top of that.  Is it really fair to ask the small business owners and high wage earners to pay even more?

So, how can you raise revenue?  I think user fees are one option; where the federal government provides a service — be it clearing and patrolling inland waterways, operating national parks, insuring bank accounts, or any one of countless other services — it is not unfair to ask the people who benefit specifically from that service to pay for it.  I would be in favor of increasing user fees to better cover the cost of providing those services.  I also think that the federal government needs to do a better job of charging for its assets.  When the rights to use broadband frequencies are sold, for example, let’s make sure that we get the fair market price.  I don’t expect such actions to solve the budget problems, but I do think that every little bit helps.

I think it is obvious that cutting spending is going to have to be the principal means of achieving fiscal discipline.  I previously wrote about the budget for NHTSA and how I thought it could be cut.  It is all a matter of making tough choices in view of our current predicament.  Should the federal government really be funding seat belt awareness and drunk driving prevention programs at this time when spending discipline is so desperately needed?  I’m sure that there are many other small agencies and federal programs that could be cut, too — and that includes programs in the Defense Department.  No federal spending should be off-limits. 

One significant objection I have to the Obama Administration is that it has tried to talk about the need to restrain spending and be more fiscally prudent but has done nothing to pursue that goal.  When I decide how to vote in November, and in 2012, one of the key decision points for me will be to choose the candidate who I think will be most willing to make the hard choices.  I don’t care whether they are Republican, Democrat, or something else — it is time to elect people who will roll up their sleeves and tackle the issue of our government spending.