Tag: federal spending

Walking to School? Yeah, There’s a Federal Program for That

The Associated Press reports:

For a growing number of children in Rhode Island, Iowa and other states, the school day starts and ends in the same way — they walk with their classmates and an adult volunteer to and from school. Walking school buses are catching on in school districts nationwide because they are seen as a way to fight childhood obesity, improve attendance rates and ensure that kids get to school safely….

Many programs across the country are funded by the federal Safe Routes to School program, which pays for infrastructure improvements and initiatives to enable children to walk and bike to school.

 

Senate Committee Hearing on Disability Fraud

On Sunday, CBS’s 60 Minutes profiled Sen. Tom Coburn’s (R-OK) on-going investigation of fraud and abuse in the federal government’s two main disability programs: Social Security Disability Insurance and Supplemental Security Income (see Chris Edwards’ discussion here). Yesterday, the Senate Committee on Homeland Security & Governmental Affairs (Coburn is the ranking member) held a hearing on a particularly egregious example centered on the Social Security Administration’s Huntington, WV office. 

The case is a perfect example of what is quickly becoming known as the “disability-industrial complex”: specialty law firms overwhelming the system with dubious disability claims, doctors vouching for applicants with dubious claims, and federal administrative law judges awarding disability benefits to individuals with dubious claims.

 

The committee produced a 160+ page report that is jaw-dropping from beginning to end. If you’re pressed for time, at least check out the “findings” on pages 4-7. In the Huntington case, it’s pretty clear that the three points of the triangle were all in cahoots. It’s also quite similar to a still unfolding disability scandal in Puerto Rico that I discussed in August. In both cases, the public is now aware of the scandals thanks to the Wall Street Journal’s Daniel Paletta’s excellent investigative reporting. That begs two questions, however: what other major disability scandals are sitting out there waiting for a curious reporter discover? And what other ticking time-bombs are Social Security Administration bureaucrats aware of but doing little to defuse? 

And Next Year There Will Be an Eighth Budget “Showdown”

The Washington Post’s David Fahrenthold counts six budget “showdowns” in Washington over the past two and half year. The looming battle this fall over funding the government and raising the debt ceiling will be number seven. That led Fahrenthold to examine what the six showdowns have accomplished with regard to the size of government. 

In sum: we had big government two and half years ago and today we have…big government.  

Some left-leaning pundits are in a tizzy that the Washington Post would dare run an article that doesn’t speak of “draconian” spending cuts to “popular programs.” Instead, Fahrenthold looked at four measures and concluded that little has changed: federal spending is slightly down, the number of federal employees is slightly down, the number of regulations is up, and the federal government still has a lot of real estate. 

Fahrenthold’s sin (one of them) is that in pointing out that spending has gone flat after the bipartisan spending explosion of the 2000s he didn’t recognize the alleged virtues of increasing government spending to “stimulate” the economy. I’m guessing Fahrenthold didn’t get the memo that a journalist writing for a mainstream news outlet is supposed to supply a quote from some macroeconomic forecasting Nostradamus like Mark Zandi.    

I do wish, however, that Fahrenthold would have explicitly differentiated between the size and scope of government. When it comes to the scope of government activitybasically, what all Uncle Sam doesI don’t know how anyone could argue that it has receded in the past two and a half years. Or the past ten years. Or, well, you get the point. 

Breaking: The (Possible) End of the Agri-Nutritional Complex

The Roll Call blog has just broken news that the GOP House leadership has decided to drop food stamps from the farm bill, in an attempt to get the farm subsidies passed by the House, presumably with Republican votes alone. Nutrition is quite an “appendage” to jettison, by the way: it usually accounts for about 80 percent of all “farm bill” spending. Here’s a great infographic on food stamp usage from the Wall Street Journal online.

I think this development could be very good news: I have long called for splitting the food welfare (or “nutrition”, as it is euphemistically called) portion of the farm bill from the subsidies part. Legislators should be forced to vote on all of these programs on their individual merits, not as part of some logrolling extravaganza. The costs and benefits of programs to feed poor people deserve to be considered separately from farm subsidies, and ideally belong at the state or, even better, local community level anyway. Do we really need the federal government specifying that our kids eat greek yogurt? But I digress.

The problem is that farmers just don’t have the political or demographic clout that they used to (and in any case are starting to squabble amongst themselves) so it has long been believed that you need to load up farm subsidies with other, somewhat related programs more palatable in urban and suburban districts. That’s why energy, environmental, and food stamps are included in the “farm bill”. If you include enough goodies for diverse special interests, you’ll cobble together the votes.

That cynicism was turned on its head, though, when the farm bill failed last month because the Republicans thought food stamp spending was too high (even after some cuts and tightening of eligibility criteria). The Democrats, on the other hand, thought the cuts were too severe. Votes were lost on both sides of the aisle.

So, by dropping food stamps, GOP leaders think that enough Republicans will vote for this new bill to pass, even without Democrats’ support. They might be correct: clearly, powerful people in Congress think that all of these hippy issues are distracting attention from more deserving welfare programs, like farm subsidies. But I am not too sure: without sufficient Democratic votes on a subsidies-alone bill, they would need every R vote they could get, and some of the Republicans aren’t too keen on farm subsidies, either.

Another, promising development in this new farm bill is the repeal of the 1949 Agriculture Act. I said in a blog post a few weeks ago (and, indeed, on many other occasions before) that the key to reforming U.S. agricultural policy is to repeal the permanent legislative infrastructure—of which the 1949 Act is an important part—that lies behind the deplorable farm bill circus to which the American body politic is subjected every five years. By taking this law off of the books, farmers and their political supporters couldn’t threaten us with dairy cliffs and other elements of farmageddon if we don’t pass farm bills.

A huge, important caveat to all of this hopeful thinking: the GOP leadership may be splitting the bills only so they can pass them piecemeal with the hope of rejoining farm subsidies and food stamps in conference with Senate Democrats (the Senate passed their bill, logrolling intact, already), then have the conference report pass the House with Democrats’ support. Certainly Majority Leader Eric Cantor (R-VA) is by all accounts disappointed that the farm bill failed to pass and is looking for another vehicle, or several vehicles, to push this puppy through. That’s not something to get excited about: death by a thousand drips of poison is still death.

The other problem, which is theoretically fixable, is that the new GOP bill doesn’t repeal the 1938 Act, which includes several commodity titles that aren’t covered by the Agricultural Act of 1949, including price supports and marketing quotas, and the establishment of the Federal Crop Insurance Corporation. So the 1938 Act has to go, too, if we are to be fully threat-free.

I am sure that others will disagree with my analysis of how the votes will break down, and my analysis of parliamentary procedure regarding conference, etc. I’m really not too interested in that, anyway. My main concern is to get American agricultural policy on the road to reform/elimination, and in my eyes these two developments could be helpful toward that end.

Time to End the Farmers’ Dole

Last week Washington enjoyed a miracle. Legislators failed in a high profile attempt to mulct the public.

Legislators were debating the Farm Bill, which mixes Food Stamps and agricultural price supports. Even though Washington is drowning in red ink, Republicans and Democrats wanted to approve a measure to spend nearly a trillion dollars over the next decade. 

The Democrats and Republicans disagreed only over details. The Democratic Senate approved $955 billion. The House Republican leadership wanted $940 billion. The president took no position other than to support more spending. 

However, last Thursday the House leadership miscalculated and lost support from Democrats as well as conservative Republicans, leading to the bill’s surprise defeat.

Of course, Washington was filled with recriminations. But the collapse of the legislation is very good news. As I pointed out in my latest Forbes column, the politicians’ failure creates a rare opportunity for real change. 

Indeed, both parts of the Farm Bill require transformation.

As I wrote:

The first step would be to separate Food Stamps from price supports. Debate the former in the context of the scores of overlapping and expensive welfare programs. Indeed, the Carleson Center for Public Policy recently counted an astounding 157 means-tested federal programs. Total government spending on general welfare runs about $1 trillion a year. It’s time Congress rethought and revamped the entire welfare industry.

As for the farmers’ dole, abolition is the only sensible policy. New Zealand successfully took this approach in 1984. 

Farmers are practiced businessmen who employ sophisticated scientific techniques to produce food and sophisticated financial tools to manage risk. Farmers are enjoying boom economic times. Wealthier on average than other Americans, farmer don’t need their own special welfare program.  Indeed, many operators already make a profit with little or no federal support. 

It is rare to stop the two major parties when they combine for a raid on the taxpayers. The task now is to make their defeat permanent. In recent years Americans have deregulated communications, finance, and transportation. Agriculture should be next.

Read the rest here.

Heritage Immigration Study and Government Spending

Conservative and libertarian scholars are clashing over the findings and political implications of the new Heritage Foundation immigration study. The study spans 92 pages and is jam-packed full of statistics and detailed calculations.

I’ll leave the immigration policy to my colleagues who are experts in that area. To me, the study provides a very useful exploration into how massive the American welfare state has become. Here are some highlights:

  • “There are over 80 of these [means-tested] programs which, at a cost of nearly $900 billion per year, provide cash, food, housing, medical, and other services to roughly 100 million low-income Americans.”
  • “The governmental system is highly redistributive … For example, in 2010, in the whole U.S. population, households with college-educated heads, on average, received $24,839 in government benefits while paying $54,089 in taxes … [and] households headed by persons without a high school degree, on average, received $46,582 in government benefits while paying only $11,469 in taxes.”
  • “Few lawmakers really understand the current size of government and the scope of redistribution. The fact that the average household gets $31,600 in government benefits each year is a shock.”

Total federal, state, and local government spending in 2010 was $5.4 trillion, or $44,932 per U.S. household. The figure of $31,600 in “benefits” is total spending less spending on public goods, interest, and government pensions.

A useful feature of the Heritage study is a breakdown of the $5.4 trillion in spending into six categories constructed by the authors. “Direct benefits” includes mainly Social Security and Medicare. “Pure public goods” includes programs such as defense and scientific research. “Population-based services” includes programs aimed at whole communities, such as police and highways. (Some of these also seem to be public goods). “Means-tested benefits” includes programs such as food stamps. Education includes both K-12 and college subsidies. “Interest and pensions” is the current costs of past spending, which includes servicing the debt and paying for government pensions. The chart shows spending in 2010.  

This spending breakdown is useful for thinking about the proper size of government. From a libertarian standpoint, governments ought to be spending only on public goods and population-based services, as a first cut. That would be $1.94 trillion, or just 36 percent of the current total of $5.4 trillion. As a percent of GDP in 2010, that would be spending of 14 percent, rather than current spending of 38 percent.

But some of the population-based services mentioned by the authors could be privatized, and spending on some of the public goods could be cut. So a good libertarian target might be less than 36 percent of current spending, or less than 14 percent of GDP.

The Heritage study is sparking a debate about what type of immigration reform the nation should have. But hopefully, it will also spur more discussion about the massive size of the American welfare state. Immigration is partly, or mainly, such a contentious issue because we have such a huge welfare state.

The study includes projections about how many trillions of dollars of government benefits will flow to immigrants and their children in the decades ahead. But conservatives and libertarians agree that we ought to cut trillions of dollars in benefits to immigrants and nonimmigrants alike.

So is there some common ground here? Can we work toward an immigration reform that cuts government dependency in general and downsizes the welfare state?

Ryan Budget Proposal Is Not a Blueprint for Limited Government

The now annual release of House Budget Committee chairman Paul Ryan’s (R-WI) budget proposal has replaced the release of the president’s budget proposal as my least favorite policy event of the year. The president promises big government and Ryan promises smaller big government. What makes the Ryan proposal more aggravating is that it’s hardly a vision of limited government, but the left (and many on the right) treats it like it is.   

According to his numbers, Ryan’s budget ideas would reduce federal spending as a percentage of GDP from 22.2 percent this year to 19.1 percent in 2023. According to Democrats and liberals, such a savage reduction in the federal footprint would inflict unfathomable pain on various groups of Americans. 

Here’s Rep. Steny Hoyer (D-MD) with the standard Democratic scare-mongering that we can expect to hear over and over again in the coming months: 

Instead of insisting on a balanced approach to deficit reduction, Ryan’s budget will demand that our middle class, seniors, veterans, women, children, federal employees, low-income families, and those nearing retirement pick up the tab. 

Other than perhaps Oompa Loompas, I believe Rep. Hoyer got’em all (rich males aren’t included because they don’t pay their “fair share”).    

Instead of delving any further into Ryan’s numbers, I’m just going to get to my point. Proposing that the federal government borrow and spend less than what is currently projected is certainly better than the alternative. But if your goal is limited government then there has to actually be limits on what all the government is involved in

I don’t see anything in Ryan’s proposal that would end the federal government’s involvement in education, job training, energy, transportation, etc., etc. Yes, Ryan calls for ending Obamacare, but that wouldn’t end the federal government’s involvement in health care. Yes, Ryan says that higher education subsidies should be capped, but that wouldn’t end the federal government’s involvement in education. And so on. How the federal government delivers the goods would change (e.g., block-granting Medicaid and premium support for Medicare), but more efficient government isn’t the same as limited government.

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