Tag: Republicans

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.

Earmarks, Spending, and the Scope of the Federal Government

The Washington Post reported yesterday that Republican senators were turning their back on a massive spending bill stuffed full of their own earmarks. Those earmarks, the Post noted, included quite a few to benefit Mississippi, the home state of Senators Roger Wicker and Thad Cochran:

Wicker, along with Cochran, had by then already sponsored earmarks in the spending bill that would fund an airport expansion in Tunica ($1.75 million), new riverwalk lights in Columbus ($300,000), improvements to a hiking and biking trail in Hattiesburg ($700,000) and improvements to an assortment of bridges, highways, trails, railways and streets across Mississippi.

A burgeoning Tea Party revolt against earmarks caused the bill to be withdrawn. Senate Majority Leader Harry Reid held a press conference to defend earmarks as the constitutional duty of the people’s elected representatives. (And, as many of our friends have emailed to tell us, held up a copy of the Cato pocket Constitution — 10 for $10 this Christmas season! — to make his point. Ah, well.)

But the real problem here is not earmarks. The underlying issue is not whether members of Congress or unelected bureaucrats spend the money that Congress appropriates for highways and the like. The real question is, why are local roads and bridges and hiking trails and riverwalk lights being paid for by taxpayers across the country?

If the people of Columbus, Mississippi, want new lights on their riverwalk, why are they asking the families of New Hampshire and Indiana and Oregon to pay for them? Shouldn’t they pay for their own lights, and let the people of Hattiesburg pay for their own hiking trails, and let the people of Oregon pay for any roads, bridges, or hiking trails that they value?

The fundamental problem is not earmarks. It is that the federal government is paying for clearly local and state responsibilities. Opponents of excessive spending should not stop at an earmark ban. They should insist that the federal government pay for national needs and leave state and local projects to the states and towns that want them.

Still Not Serious About Cutting Spending

The howls of outrage that have greeted the report of the bipartisan National Commission on Fiscal Responsibility and Reform shows two things:  1) most Democrats have no interest in reducing the size and cost of government; and 2) few Republicans are actually serious about it.

From the initial reaction, one would think that the Commission has slashed government to the bone, throwing the elderly, poor and sick into the street.  In reality, the Commission report is far from a radical document.  It proposes a reduction in government spending from 24.3 percent of GDP today to 21.8 percent over the next 15 years.  That’s a start.  But as recently as 2000 total federal spending was just 18.4 percent of GDP – and people were hardly dying in the streets during the Clinton years.  

In fact, the Commission doesn’t actually “cut” federal spending.  Under the Commission’s proposal, it would rise from roughly $3.5 trillion today to more than $5 trillion by 2020.  So, under the terrible “cuts” that the Commission is recommending, federal spending would still increase faster than inflation.  This is the old Washington game of calling a slower increase than previously projected a “cut.”

But Democrats appear unwilling to support even this modest slowing in the growth of government.  Instead they call for simply raising taxes to support a virtually unlimited amount of federal spending.  Republicans, meanwhile, talk about reducing government, but fall back on bromides about reducing waste, fraud, and abuse when faced with the need to make specific cuts.

If we were serious about reducing the size, cost and intrusiveness of government, we should roll back spending to Clinton-era levels.  (My colleague Chris Edwards has shown how that can be done.)  That would eliminate the need for the tax increases that the commission proposes. 

Alas, we still await political leadership with that amount of courage.

Will the Deficit Compel Congress to Cut Military Spending?

Over at National Journal’s National Security Experts blog, Megan Scully notes the military spending cuts contained within a proposal by Erskine Bowles and Alan Simpson, the co-chairs of the president’s deficit reduction commission. Scully asks: “How feasible would it be for lawmakers to make these kinds of cuts to defense?…What kind of sway will fiscal hawks have in the next Congress - and will it be enough to push through sweeping defense cuts over the objections from pro-defense members of their party?”

Government spending across the board must be cut, I explain, beginning especially with entitlements.  I continue:

Other spending must also be on the table, however, and that includes the roughly 23 percent of the federal budget that goes to the military. This often poses a particular challenge for Republicans given their traditional support for military spending and their professed commitment to fiscal discipline. But it need not be particularly difficult. If Republicans reaffirm that the core function of government, many would say one of the only core functions of government, is defense (strictly speaking), then the path to a politically sustainable and economically sound defense posture is clear: a military geared to defending the United States and its vital national interests, and not permanently deployed as the world’s policeman and armed social worker. Such a posture would allow for a smaller Army and Marine Corps as the wars in Iraq and Afghanistan are drawn to a close (as they should be), deep cuts in the Pentagon’s civilian work force, which has grown dramatically over the past 10 years, and sensible reductions in the nuclear arsenal. More modest cuts are warranted in intelligence and R&D. Finally, significant changes in a number of costly and unnecessary weapons and platforms, including terminating the V-22 Osprey and the Expeditionary Fighting Vehicle, and greater scrutiny of the F-35 program, for example, must also be in the mix….

Serious cuts to military spending… must be part of a broader strategic reset that ends the free-riding of wealthy and stable allies around the world, and that takes a more balanced and objective view of our relative strategic advantages and our enviable security.

 You can read the rest of my response here.

Ban Spending Earmarks, But Not Tariff Cuts

Republican leaders in Congress announced Monday that they are all on board to ban spending “earmarks” when the newly elected Congress convenes in January. That is all to the good. While not a large share of the federal budget, the designation of tax dollars to fund specific pet projects in member districts has come to symbolize out-of-control spending in Washington.

Those same leaders should clarify that the earmark ban applies only to spending projects—not to the kind of tariff suspensions including in a recent miscellaneous tariff bill.

The U.S. Manufacturing Enhancement Act approved by Congress in July suspended tariffs on hundreds of imported items of special interest to U.S. manufacturers. House Republican leaders made the mistake earlier this year of including such tariff suspensions in an earmark ban they announced in March.

The overly broad definition of an earmark boxed the leadership into opposing a perfectly sensible trade bill. Despite the half-hearted opposition of the GOP leadership, the U.S. Manufacturing Enhancement Act passed overwhelmingly in the House on July 21, by a margin of 378-43, with Republicans supporting it by a 3-1 margin.

Most members of Congress already understood what the Cato Institute pointed out in a September 2010 study recommending reform of future miscellaneous tariff bills—that tariff cuts are not the same as spending earmarks. Here is what I wrote in the study about the difference between tariff cuts and the kind of spending earmarks that has angered voters:

Spending-bill earmarks distribute tax dollars not for any public purpose authorized under the U.S. Constitution, but rather to benefit a certain special interest or a specific city or district. They grant favors to a small group of beneficiaries at the public’s expense. In contrast, a tariff suspension repeals a narrow tax that falls disproportionately and unfairly on a small group of producers. Instead of granting a favor at the public’s expense, a tariff suspension relieves individual producers of a burden that falls on them and nobody else. Unlike a spending earmark, a tariff suspension creates no new claim on public resources. It does not expand the scope or size of government.

Including tariff suspensions in the moratorium is not a matter of curbing the power of lobbyists. There is a world of difference between lobbying for a $500,000 government grant for a project with narrow benefits, and lobbying to remove a $500,000 tax bill that only a handful of enterprises are required to pay. The former seeks an expansion of the government’s power and influence, the latter a reduction. Republicans who rightly complain about the growth of the federal government should be the first to embrace the suspension and repeal of hundreds of nuisance taxes distorting the economy and burdening American producers.

The new Congress may soon consider another miscellaneous tariff bill to further reduce discriminatory tariffs that impose real costs on U.S. companies trying to compete in global markets. Republican leaders should join with their Democratic counterparts in the new Congress to clarify that suspending or repealing unfair tariffs should not be banned but should be vigorously pursued.

Earmarks and the Constitution

Today POLITICO Arena asks:

Is Senate Minority Leader McConnell’s announcement yesterday that he will support a moratorium on earmarks a sign that establishment Republicans are caving in to the tea party faction of their party?

My response:

Far from a sign that ”establishment” Republicans are “caving in” to the Tea Party faction soon to arrive here, Senate Minority Leader McConnell’s announcement yesterday that he “will join the Republican Leadership in the House in support of a moratorium on earmarks in the 112th Congress” suggests that Republicans may be rediscovering their roots in limited government, however reluctantly for some. At the same time, McConnell’s unusually long press release brings out two main difficulties surrounding the subject: first, and most important, the overall growth of spending; and second, the question of who decides where that spending goes.

On the second question, McConnell is clearly right: It’s hardly an improvement if ending earmarks amounts simply to giving the president the discretion to determine where spending goes. And on that point he contrasts earmarks he himself has made toward projects that properly were federal – e.g., cleaning up a dangerous chemical weapons site in his state, which presidents in both parties had ignored – with the Stimulus Bill, “which Congress passed without any earmarks only to have the current administration load it up with earmarks for everything from turtle tunnels to tennis courts.”

To be sure, there’s enough mischief at both ends of Pennsylvania Avenue to go around, but it’s the growth of spending, most on matters unauthorized by the Constitution, that is far and away the larger problem. McConnell calls for congressional oversight “to monitor how the money taxpayers send to the administration is actually spent.” Far more important will be hearings to determine whether Congress has constitutional authority to appropriate money on any particular matter in the first place.

Thus, the new Congress needs to see through the false alternative the earmarks debate has engendered. At bottom, it’s not a question of whether Congress or the president shall decide. Rather, after administration input, all but ministerial spending decisions belong to Congress – as constrained by the Constitution. Thus, if the voice of the electorate is to be respected, new and old members alike need to attend first to their oath of office.

The Deficit Commission: A Good Try That Falls Short

My colleagues, Dan Mitchell, Jagadeesh Gokhale, Michael Cannon and Chris Edwards have already provided their thoughts on the chairman’s mark released yesterday by the bipartisan deficit reduction commission.  A few additional thoughts:

The commission provides a good-faith look at the magnitude of the problem we face, and the magnitude of cuts necessary to bring spending down to even 21 percent of GDP (and it really should be far lower).  In doing so they show just how unserious Republicans are in proposing a paltry $100 billion in spending cuts.  And the commission makes it clear, unlike Republicans, that both entitlements and defense spending must be on the table.

The commission also starts the debate in a useful direction by implicitly acknowledging that their need to be some limits to government spending—that government cannot consume an ever-increasing proportion of GDP.  (Without a change in policy, the federal government will consume 43 percent of GDP by 2050.)

But ultimately the report falls short because it fails to address the proper role of government.  In fact, it tacitly accepts the idea that government should be doing everything it is doing now.  It even acquiesces to the new health care law.  As a result, it fails to reduce the size of government sufficiently to avoid tax hikes, let alone permit tax cuts in the future.

Moreover, because the commission leaves the basic structure and role of government intact, it raises questions about the future viability of its proposed mix of spending cuts and tax increases.  History demonstrates that it is far too likely that tax hikes will be permanent, while spending cuts will last as long as the next year-end emergency appropriations bill.

As the commission moves toward a final report on December 1, members would be advised not to focus just on the details of these proposals, but to have a serious and deliberative discussion of what the federal government should and should not be doing.