Tag: mitt romney

Spending Cut Goal: 10% in Two Years

The new issue of International Economy has an article by Canada’s Liberal finance minister from the 1990s, Paul Martin, who succeeded in shrinking that country’s federal government. If a new President Mitt Romney wants to cut spending in Washington, Martin has some tips for him, such as cutting spending broadly, forecasting conservatively, and aiming to eliminate the deficit in a fixed time frame and sticking to it. (I’d also advise President Obama to follow the Canadian example, but he’s issued four budgets so far and seems to be more interested in following the Greek fiscal approach).

Paul Martin says:

I tabled the 1995 Budget in the House of Commons. No department of government escaped untouched. Transfers to the provinces for healthcare and education were reduced, public sector employment was cut by 20 percent, the Department of Transport was cut deeply, historic subsidies in the Department of Agriculture were eliminated, and spending in the Department of Industry was cut by 65 percent.

These were massive cuts, far greater than anything Canada had ever seen. Nor were the cuts simply reduction in the growth of future spending as is so often the case. These were absolute cuts in existing spending, such that by the end of the process the federal government’s expenditures as a percentage of GDP were lower than they had been at anytime in the previous fifty years.

From a libertarian perspective, Canada’s cuts weren’t actually “massive,” but for a Liberal government in a country with a population that had gotten used to government coddling, it was pretty impressive. As I noted in my recent article on Canada, Martin and his team cut the budget by 10 percent in just two years.

So my suggested goal for Romney and team if elected this Fall: at least match the Canadians and push for $380 billion of cuts out of otherwise expected spending in 2015 of $3.8 trillion. And do what the Canadians did: cut everything, including entitlements, aid to subnational governments, defense, business subsidies, farm subsidies, and much more in one big push. Many in Congress will resist of course, but presidents have their most leverage in the first year. Mitt will have nothing to lose but the country into a vortex of debt and economic despair if he doesn’t at least try.

Romney Etch-a-Sketches His Opposition to ObamaCare with Leavitt Pick

Mitt Romney has appointed ObamaCare profiteer and former Utah governor Mike Leavitt to head his presidential transition team. Politico reports that Leavitt has “headlined health care policy discussions at $10,000 per-person Beltway fundraisers for Romney” and may become White House chief of staff if Romney wins. ObamaCare opponents should be outraged.

Leavitt has spent the last couple of years spreading dangerous (but self-enriching!) nonsense about how states would benefit by establishing ObamaCare’s health insurance “exchanges.” He seldom mentions that his “consulting” business Leavitt Partners rakes in tons of ObamaCare cash by bidding on those contracts. Perhaps this is because reporters seldom ask.

Here’s a video Cato produced about why states should flatly refuse to create ObamaCare Exchanges:

Ben Domenech blogs about Leavitt’s ObamaCare-related iniquities here and here. Domenech writes, “Thankfully, this has been a push that Leavitt has been losing.”

But don’t count Leavitt out. Politico writes:

Leavitt has said some relatively positive things about certain elements of Obama’s health reform law…

[Leavitt’s longtime chief aide, Rich] McKeown, who still works with Leavitt at his Utah-based health care consultancy [Leavitt Partners], acknowledged that the former governor does not want to undo one key part of the controversial legislation.

“We believe that the exchanges are the solution to small business insurance market and that’s gotten us sideways with some conservatives,” he said.

The exchanges are not only a matter of principle for Leavitt — they’re also a cash cow.

The size of his firm, Leavitt Partners, doubled in the year after the bill was signed as they won contracts to help states set up the exchanges funded by the legislation.

And yet someone somehow managed to say this:

“He’s 100 percent in it for Mitt, no secret agenda for himself,” said one Romneyite.

The Romney camp still says Mitt will “repeal[] Obamacare, starting Day One.” If he were serious, he would announce that he will rescind this IRS rule on day one. But the fact that Romney picked Leavitt suggests he really doesn’t mind ObamaCare that much, and that he is just saying whatever he needs to say to get what he wants. I know. Mitt Romney. Go figure. In this case, that means assuaging all the Republicans and independents who hate ObamaCare.

Romney’s appointment of Leavitt is a first step toward flip-flopping–or Etch-a-Sketching, or Romneying(TM), or whatever–on ObamaCare repeal. But it’s hard to blame Romney for thinking Republicans won’t care. These are, after all, people who picked Mitt Romney as their presidential nominee.

Getting Cato - and Fed Ed Policy - Right

I want to thank Kevin Welner for giving the Cato Institute’s education people some pub, and I’m heartened that he thinks our ideas have a lot of influence with the Romney folks. As far as I can tell, though, they don’t. Why? Because if they did, Gov. Romney wouldn’t be offering federal open-enrollment, voucher, or even “neovoucher” proposals. He would be calling to get the federal government out of education, which is exactly what I and my colleagues have long advocated.

Do we like school choice? Absolutely, because logic and mounds of evidence strongly suggest that it works. But that does not mean we want the federal government to impose or “incentivize” it.

There are myriad reasons for this, even though it requires resisting the powerful temptation to have the federal government impose a policy we like in one fell swoop rather than going through the hard work of having individual states and districts adopt it.

First and foremost, we oppose federal involvement because the Constitution doesn’t give Washington authority to meddle in education outside of its 14th Amendment duty to prohibit state and district discrimination, and its jurisdiction over federal lands and DC itself. To press for what we know to be unconstitutional just because it would be politically easy would be to subvert the very rule of law, that which protects us from the arbitrary – and as the Founders understood, very dangerous – rule of men.

But the reasons for keeping Washington at bay are not simply legal or to avoid an oppressive dictatorship.

The fact of the matter is that no one person or group of people – even those of us at Cato’s Center for Educational Freedom – are omniscient, or even close to it. There are lots of things we don’t know, and we all make mistakes. That’s why it is never wise to give broad authority to a central government, even if it is utterly benevolent. If it does something wrong everyone goes down, and the human tendency is to do lots of wrong things. It is this understanding that backs the “laboratories of democracy” concept of states. Individual states can try different ideas, but others are free to steer clear of those that fail and run with those that work.

But aren’t state governments and districts prone to the same human failings as Washington, not to mention the same special-interest driven politics, misalignment of political and educational incentives, etc.?

They certainly are, which is why education policy people at Cato support school choice generally and education tax credits – which crucially do not involve public money – specifically. Given the numerous reasons that government fails, as well as the need for the specialization, competition, and innovation that government quashes, we understand that education would work much more effectively if government didn’t control the schools. But it is far better to let fifty states control their own education systems – including getting to experiment with their own school-choice delivery mechanisms – than to empower the central government to dictate one policy for all.

Yes, education analysts at Cato like school choice. But we’re also big fans of federalism and the Constitution, and when it comes to federal policy those things must come first.

C/P from the National Journal’s “Education Experts” blog.

Romney, Kerry Miss the Point on Threats: Size Matters

Senator John Kerry (D-MA) is the latest person to mock Mitt Romney’s declaration that the Russian Federation “is, without question, our number one geopolitical foe.” It was a pretty silly statement, particularly given the fact that Russia is a demographic basket case and a very humble economic power. But there’s all sorts of weirdness going on in Romney’s assertions and those of his critics.

Take, for example, Wolf Blitzer’s follow up to the Romney assertion:

BLITZER:  But you think Russia is a bigger foe right now than, let’s say, Iran or China or North Korea? Is that—is that what you’re suggesting, Governor?

ROMNEY:  Well, I’m saying in terms of a geopolitical opponent, the nation that lines up with the world’s worst actors.  Of course, the greatest threat that the world faces is a nuclear Iran.  A nuclear North Korea is already troubling enough.

But when these—these terrible actors pursue their course in the world and we go to the United Nations looking for ways to stop them, when—when Assad, for instance, is murdering his own people, we go—we go to the United Nations, and who is it that always stands up for the world’s worst actors?

It is always Russia, typically with China alongside.

And—and so in terms of a geopolitical foe, a nation that’s on the Security Council, that has the heft of the Security Council and is, of course, a—a massive nuclear power, Russia is the—the geopolitical foe and—and the—and they’re—the idea that our president is—is planning on doing something with them that he’s not willing to tell the American people before the election is something I find very, very alarming.

In fairness to Governor Romney, it does seem like he realizes he’s made a gaffe here, so he tries to back up and take another run at it. But in doing so, he just makes it worse. Taking a mulligan, he tries to pivot from the Russia allegation by folding in Iran (“the greatest threat the world faces”) and North Korea, and gesturing at Syria.

It’s the same thing Kerry does in his condescending lecture to Romney:

We have much bigger problems on this planet in the Middle East, with the evolution of Egypt, with the challenge of Syria, terrorism, al-Qaeda in Yemen, and so forth.

Both of these guys should be ashamed of themselves. And they ought to be light-headed from the amount of threat inflation they’re doing. We spend too much time debating the relative size of our enemies and too little debating their absolute size. Every country at all times has a #1, #2, and #3 “geopolitical foe.” But the threat environments posed by those foes vary radically.

In a better world, American political elites would discuss the absolute level of threat they face rather than just bickering over our enemies’ batting order. As Ben Friedman and I recently wrote in Orbis:

The dirty little secret of U.S. defense politics is that the United States is safe—probably the most secure great power in modern history. Weak neighbors, vast ocean barriers, nuclear weapons and the wealth to build up forces make almost nonexistent the threats that militaries traditionally existed to thwart. Americans cannot seriously fear territorial conquest, civil war, annexation of peripheral territories, or blockade. What passes for enemies here are small potatoes compared with what worried most states at most times. Most U.S. military interventions affect U.S. security at best marginally. We have hopes and sometimes interests in the places where we send troops, but no matter how much we repeat it to honor the troops, it is untrue that they are fighting to protect our freedom.

Part of the reason our national security politics are pathological is that we focus disproportionately on debating which enemy is the biggest without stopping to ask how big the enemies are.

If your three biggest problems are being infected with Black Death, having a bull rhino charging at you, and being knee-deep in quicksand, you can wonder—for a few seconds, at least—which is your #1 problem. Similarly, if your three biggest problems are that you got into an argument with your spouse about who left a dish in the sink, your shoelaces are untied, and you can’t log in to Facebook, you can puzzle over which of those is bigger. But only a fool would miss the distinctions between the two scenarios.

Cross-posted from the Skeptics at the National Interest.

Gov. Romney, Federal ‘Incentives’ Mean Federal Power

In a speech today, presumptive GOP presidential nominee Mitt Romney will lay out the foundations of his education platform. Based on an outline of his proposals released by Education Week this morning, Gov. Romney seems just a little less disinterested in the Constitution – and the 40-plus years of proven federal education failure – than the man he seeks to replace. And no, calling what you want federal “incentives” neither absolves them of being unacceptable federal intrusions, nor makes them any less coercive.

The heart of what Mr. Romney wants in elementary and secondary education is federal enticements to get states to implement everything from “open-enrollment” policies for schools, to individual school “report cards,” to encouraging “talented individuals to become teachers.”

As I wrote last week, while “incentive” sounds kinda harmless, an incentive program is really all that No Child Left Behind is. No state has to do anything in NCLB. It only has to follow the law if it wants the federal money attached to it. The funding is only an incentive, but it is so big an incentive it is irresistible, even with the law being a huge millstone around the neck of American education. And, of course, taxpayers had no choice about furnishing the ducats to begin with. (Well, I suppose they were incentivized by a trip to prison…)

Where Romney’s K-12 offering is most enticing is his proposal that federal money be attached to low-income and special-needs children and made portable even to private schools. (Portable, that is, “in accordance with state guidelines,” a proviso the outline doesn’t flesh out.) But the very real threat, as with all federal funding , is federal control. What Washington funds it will regulate – though usually for political show, not efficiency or effectiveness – and that is something we should strenuously avoid for  private schools when states can implement more varied – and less regulation prone – choice mechanisms such as education tax credits. And, of course, the Constitution gives the federal government no more authority to deliver school choice than to dictate curricula. That is, except in Washington itself, and to his credit Mr. Romney is proposing to save the D.C. voucher program that Mr. Obama, for whatever shoddy reason, seems determined to suffocate.

The good news about Gov. Romney’s outline is that it directly addresses the primary problem in higher education, and one of its primary causes: insane tuition inflation fueled by massive federal student aid. Indeed, though he will no doubt get flayed for it by the higher ed establishment, who will publically deny it like so many naked emperors, Mr. Romney’s outline is refreshingly straightforward in identifying the root problem:

Governor Romney realizes that more spending will not solve the problem of tuition increases – to the contrary, it has helped fuel the problem. When Washington puts more money into student aid programs to help families and individuals pay for higher education, colleges and universities raise tuition rates.

So what grade does Mr. Romney get on education, at least from this initial outline? About a 30 percent for K-12, and a 90 percent for higher ed. That works out to 60 percent – a woeful D-minus – but that’s probably a tad bit better than most presidents would have gotten since the 1960s.

After-Action Report on Cato’s Panel on the Future of the Navy Surface Fleet

Yesterday’s event on the U.S. Navy was a big success and generated a vigorous discussion. Ben Freeman from POGO spelled out his concerns about the littoral combat ship, specifically the Freedom (LCS-1) (documented here and here) and CBO’s Eric Labs raised a few additional ones pertaining to the program as whole. Under Secretary of the Navy Robert Work delivered an impassioned defense of the LCS within the context of the entire fleet design, drawing on examples from history to demonstrate how the Navy learns and adapts. Consistent with past practice, Work is confident that the fleet will put the LCS through the paces—two completely different ships—and figure out how to use them.

It was refreshing to engage in a serious discussion among people who are committed to a Navy that is second-to-none, and who care enough to raise questions designed to make it stronger. I focused my remarks on the LCS’s operating characteristics, but especially on the decision to buy two different LCS types. The original plan was for the Navy to select just one. The advantage of having two ships, Work stressed, was that the Navy would learn about each vessel’s unique capabilities. The disadvantage, as I see it, is the loss of economies of scale, including in parts, logistics and training.

I do think it is important to move past the specific technical problems identified in both LCS-1 and LCS-2. These are the first ships in the class, and such ships always have their share of problems (I was assigned to a first-in-class ship, USS Ticonderoga, from March 1990 to May 1993, and we were working through some problems nine years after the ship was launched). The blogger Galrahn (aka Raymond Pritchett) at Information Dissemination last week tweeted that the information in the POGO and Aviation Week reports was all old news, but that hadn’t stopped members of Congress from calling for another investigation. Under Secretary Work stressed that he believes the problems have been addressed, or will be, and he is committed to making this program successful.

But this discussion about fixing problems and learning as we go along reminds me of a conversation that I had a few months ago with a person who believes we should increase military spending. This individual is advising Gov. Romney, who has pledged to boost Pentagon spending quite substantially—perhaps as much as an extra $2.5 trillion over the next ten years, by my estimates—if he is elected president.

While talking, I raised the subject of the LCS, not the first time that the subject has come up between us. He was nonplussed and claimed that the problems with the ship could easily be fixed. More specifically, he said “It is nothing that money can’t fix.” That is pretty much a direct quote.

Nothing that money can’t fix.

There are two problems with that statement. First, Mitt Romney might not become the 45thpresident of the United States in January 2013—the polls say that it is basically a 50-50 proposition that he won’t—and I think it highly unlikely that the Navy’s shipbuilding budget will grow substantially if he isn’t elected.

Second, I seriously doubt that the Navy’s shipbuilding budget will grow very much even if Mitt Romney is elected president, and it certainly won’t grow enough to obviate any discussion of trade offs between different ships. Even if the Navy is handed billions or tens of billions of dollars more for shipbuilding, it is still the case that every ship that we build, or every new one proposed, is competing against one another. There are always opportunity costs, even when the topline budget grows. Navy warships compete against aircraft carriers. Navy surface ships compete with submarines. And the Navy competes with the Air Force. And the Air Force and Navy compete with the Army, etc.

For now, the Navy has chosen the LCS over possible alternatives. But there are alternatives. Eric Labs authored a good study a few years ago looking at the Coast Guard’s national security cutters (.pdf), but stated yesterday that the NSCs would be more costly than the LCSs. In the paper, “Budgetary Savings from Military Restraint,” Ben Friedman and I suggested retaining the Perry-class frigates for a few more years while we develop a different ship, perhaps a new class of frigates or corvettes that could do many of the same missions that the LCS is expected to perform, and, we believe, at less cost. At yesterday’s forum, Under Secretary Work stated that we could not purchase a new frigate for less than $750 million. While I respect the Under’s expertise, I plan to spend some time over the coming months scrutinizing that claim.