Tag: Republicans

Boehner Plan Doesn’t Cut Spending

House Speaker John Boehner is scrambling to revise his budget plan after the CBO found that it would only cut spending by $850 billion, not the $1.2 trillion promised.

However, the Boehner plan doesn’t actually cut spending at all. The chart shows the discretionary spending caps in the Boehner plan. Spending increases every year—from $1.043 trillion in 2012 to $1.234 trillion in 2021. (This category of spending excludes the costs of wars in Iraq and Afghanistan).

The “cuts” in the Boehner plan are only cuts from the CBO baseline, which is an imaginary path of future spending designed as a planning tool for Congress. Boehner can propose to spend any amount in any future year he wants, and in this plan he choose to have a steadily rising spending path.

The Boehner plan also doesn’t cut spending in a more fundamental way. It doesn’t lay out any particular programs or agencies to terminate. I’m in favor of spending caps as a secondary enforcement mechanism, but actual cuts have to come first. A caps-only plan like Boehner’s just kicks the can down the road. At best, it simply nudges future legislators to actually cut something specific.

Why doesn’t the House leadership propose real cuts? They’ve certainly got the resources and expertise to do the job. A single senator – Tom Coburn – produced a 620-page report last week detailing hundreds of programs to cut and terminate. Coburn and his staff read through thousands of articles and reports on the real-world performance of federal programs, and they made a good case for each particular cut they proposed.

Republican leaders can’t hide behind baselines forever. If they really want a smaller government as they keep claiming, they’ve got to target particular programs and agencies and begin a national debate about terminating them.

Health Care Entitlements Are the Real Debt Bomb

I’m a few days behind on this, but over at The Corner Yuval Levin has written an important post about how health care entitlements are the real cause of the debt crisis facing the federal government. Using Congressional Budget Office projections, Levin creates this magnificent chart, which I plan to steal over and over again:

If Republicans want to conquer the federal debt, they need to embrace health policy like they embrace tax cuts.

John Boehner’s Spending and Debt Promise

House Speaker John Boehner has promised to tie substantial spending cuts to upcoming debt-limit legislation. He said spending cuts will have to be at least as large as the dollar value of the allowed debt increase. Thus, if the legislation increased the legal debt limit by $2 trillion, then Congress would have to cut spending over time by at least $2 trillion.

How can we be sure that spending cuts are real?

There are only two types of solid and tough-to-reverse spending cuts—legislated changes to reduce entitlement benefit levels and complete termination of discretionary programs. Republicans will have to define what time period they are talking about, but let’s assume it’s the standard 10-year budget window.

  • Entitlements: The legislation, for example, could change the indexing formula for initial Social Security benefits from wages to prices. The Congressional Budget Office says that change would reduce spending by $137 billion over 10 years (2012-2021). Other options include raising the retirement age for Social Security and raising deductibles for Medicare.
  • Discretionary: Each session of Congress decides the following year’s discretionary spending. Promises of discretionary spending cuts beyond one year are meaningless. Thus, the various promises in Republican and Democratic budget plans to freeze various parts of discretionary spending through 2021 or reduce spending to 2008 levels over the long term have no weight. Those are not real cuts.

The only way to get real cuts in discretionary spending—cuts that would be tough to reverse out in later years—is complete program termination and repeal of the program’s authorization. That way, policymakers in future years would generally need at least 60 votes in the Senate to reinstate the spending.

Thus, if the GOP promises to save $50 billion over 10 years by reducing the levels of Title 1 grants to the states for K-12 schools, that is not a real and solid cut. However, if they pass a law to repeal Title 1 spending altogether, that cut may well be sustained over the long term.

To make spending cuts even more secure, the GOP should also insist on a statutory cap on overall outlays with a supermajority requirement to break, as I’ve outlined here. For program termination ideas, see www.DownsizingGovernment.org.

In sum, the GOP needs to ensure that spending cuts tied to the debt-limit vote are either:

  1. Changes to entitlement laws to reduce benefit levels, or
  2. Discretionary program terminations.

    Promises to hold down future discretionary spending levels and partial program trims are not real spending cuts.

    Will Republicans Come to Grips With Immigration?

    Today POLITICO Arena asks:

    Given President Obama’s speech today in El Paso, Texas, is immigration a winning issue for Democrats?

    My response:

    Immigration will be a winning issue for Democrats only if Republicans allow it, which they’re quite capable of doing. Where’s the anti-immigrant part of the Republican base going to go — to the Democrats? Hardly. With so much else at stake, will they sit out the 2012 elections, over this one issue? Please.

    If Republicans play it right, this can be a winner. No one seriously believes that the estimated 10 to 12 million illegal immigrants in the country, most working, can or should be sent back to their countries of origin. So the main issues are paving the way to legalization, better securing the borders, and providing for a rational guest worker program. If Republicans got behind a package like that, immigration would cease to be a Democratic issue. This isn’t rocket science.

    Thursday Links

    2011 Budget Battle in Perspective

    Today the Cato Institute placed an ad in major newspapers highlighting specific spending cuts that policymakers should make to restore our country’s fiscal sanity and economic stability. Our public call for policymakers to demonstrate leadership on spending cuts comes in the midst of the on-going battle on Capitol Hill over funding the government for the remainder of fiscal 2011.

    A graphic at the top of the ad measures the $61 billion in cuts that Republicans have proposed against fiscal 2011 estimates for total spending, the deficit, and interest on the debt. As the graphic shows and the ad notes, it is clear that “leaders and members of both parties are in deep denial about the fiscal emergency we face.”

    There are news reports that Republican and Democrat negotiators are heading toward a compromise figure of $33 billion in spending cuts. Let’s put that figure in perspective alongside the GOP’s original proposal to cut a whopping $61 billion:

    Record spending levels…trillion dollar plus deficits…mountainous debt…a weak economy…

    What, Congress worry?

    What Are Republicans Thinking?!?

    I posted recently at International Liberty about the stunning political incompetence of Republican Senators, who reportedly are willing to give Obama an increase in the debt limit in exchange for a vote (yes, just a vote) on a balanced budget amendment.

    As I explained, there is no way they can get the necessary two-thirds support to approve an amendment, so why trade a meaningless and symbolic vote on a BBA for meaningful and real approval of more borrowing authority for Obama? My analogy yesterday was that this was like trading an all-star baseball player for a utility infielder in the minor leagues.

    I did acknowledge that forcing a vote on a BBA was a worthwhile endeavor, but said that the GOP has that power anyhow, so why trade away something valuable to get something you already can get for free?

    Little did I realize that Republicans already did force a vote on the balanced budget amendment. Less than one month ago, on March 2, Senator Lee of Utah got a vote on a “Sense of the Senate” resolution in favor of a balanced budget amendment. Senator Lee’s resolution received 58 votes, which is nice, but an actual amendment would need a two-thirds supermajority, so this test vote demonstrated that there is no way to approve an amendment this year.

    I’m glad Senator Lee proposed his resolution. I’m glad Senators were forced to go on the record.

    But I’m mystified, flabbergasted, and stunned that Republicans apparently are willing to give Obama a bigger debt limit in exchange for something they already got.

    Returning to our baseball analogy, this would be like the Yankees giving Derek Jeter to the Red Sox in exchange for a player they already have, such as Alex Rodriguez. I imagine New York sportswriters would be dumbfounded by such stupidity and would rip the team’s management to shreds. So that gives you an idea of how I feel about what’s happening in Washington.

    As I noted in my earlier post, I’ll soon write about the fiscal reforms fiscal conservatives should demand in exchange for a higher debt limit.