Tag: George Allen

GOP Groups’ Ads on Sequestration, Defense Jobs Are Misleading

It is no surprise that the defense contractors want to protect their profits by getting taxpayers to pony up more money. Now they have secured the support of Crossroads GPS in a commercial against Senate candidate and former Virginia governor Tim Kaine. The Crossroads ad follows similar ones from Kaine’s challenger, George Allen, and the National Republican Senatorial Committee. All three ads claim that spending cuts under sequestration will result in devastating job losses to the defense industry and Virginia; the Crossroads ad claims 520,000 jobs will be lost. But these estimates are wildly inflated and represent the short-term interests of the defense industry, not the American taxpayer.

In actuality, the cuts, if they occur, will be evenly divided between the Pentagon and the rest of the discretionary budget. They are a very modest share of total federal spending over the next decade, and the assertion that the cuts will lead to massive job losses have been thoroughly refuted here, here, and here. Indeed, there is good reason to believe that such cuts will have beneficial effects over the medium- to long-term, if the savings are returned to taxpayers, and not merely plowed into other federal spending.

All of these pro-GOP ads get the lost jobs number from a study commissioned by the Aerospace Industries Association and authored by George Mason economist Stephen Fuller. Last Friday, the Cato Institute hosted a forum—which included Fuller—that considered the effects of military spending cuts on employment and the economy. We discussed the positive impact that cuts in Pentagon spending can have in the wider economy, and even in a state like Virginia that is more dependent than other states on federal spending. The Wall Street Journal’s Steve Moore argued we should just let sequestration happen (I agree). As the Washington Post reported, Economist Benjamin Zycher summed up the hypocrisy of conservatives claiming the defense budget produces jobs:

“Conservatives . . . are highly dubious about the purported [gross domestic product] and employment benefits of federal domestic spending, as illustrated by the meager effects of the Obama stimulus fiasco,” he said. “There’s no particular reason to believe that defense spending is different.”

I wish that organizations like Crossroads GPS were as committed to saving the taxpayers money as they are to electing Republicans. I’d also like it if they relied on objective facts, not statistics designed to protect the narrow interests of an industry that relies overwhelmingly on taxpayer dollars. We wouldn’t expect Republicans to accept the teachers unions’ claims about job losses from cuts in the Department of Education. Why, then, do they promote these phony numbers by the defense contractors?

On Thursday, Dan Mitchell and I will be discussing this issue—the effects of sequestration—on Capitol Hill. It is not too late to register, but space is limited, so act now.

George W. McDonnell

Virginia governor Bob McDonnell must be a Bush Republican. The Washington Post reports today:

Virginia Gov. Robert F. McDonnell plans a massive spending campaign that he said would unclog state roads, award thousands more college degrees and spur job creation, part of an aggressive legislative agenda he is expected to roll out this week.

McDonnell (R) will press lawmakers to approve a series of statewide projects he said would be paid in part through Virginia’s $403 million budget surplus, $337 million in higher-than-expected tax revenue, and $192 million generated through cuts and savings….

He plans to borrow nearly $3 billion over the next three years.

That doesn’t sound like the agenda of a Reagan Republican or a Tea Party Republican. It sounds a lot like the program of George W. Bush, the biggest-spending president between LBJ and, well, the president who followed Bush.

Of course, McDonnell might also be called a George Allen Republican. Allen, who served as governor of Virginia from 1994 through 1997, has a reputation as a staunch conservative. But he earned a grade of 40 on the Cato Institute’s Fiscal Policy Report Card. McDonnell seems to be headed for a similar grade.