Tag: Republicans

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.

Conservative Rift Widening over Military Spending

More and more figures on the right – especially some darlings of the all-important tea party movement – are coming forward to utter a conservative heresy: that the Pentagon budget cow perhaps should not be so sacred after all.

Senator-elect Rand Paul of Kentucky was the latest, declaring on ABC’s “This Week” on Sunday that military spending should not be exempt from the electorate’s clear
desire to reduce the massive federal deficit.

His comments follow similar musings by leading fiscal hawks Sen. Tom Coburn of Oklahoma and Gov. Mitch Daniels of Indiana, a presumptive contender for the GOP nomination in 2012.  Others who agree that military spending shouldn’t get a free pass as we search for savings include Sen. Johnny Isakson, Sen. Bob Corker, Sen.-elect Pat Toomey—the list goes on.

Will tea partiers extend their limited government principles to foreign policyI certainly hope so, although I caution that any move to bring down Pentagon spending must include a change in our foreign policy that currently commits our military to far too many missions abroad.  To cut spending without reducing overseas commitments merely places additional strains on the men and women serving in our military, which is no one’s desired outcome.

If tea partiers need the specifics they have been criticized for lacking in their drive for fiscal discipline, they need look no further than the Cato Institute’s DownSizingGovernment.org project.  As of today, that web site includes recommendations for over a trillion dollars in targeted cuts to the Pentagon budget over ten years.

Meanwhile, the hawkish elements of the right have been at pains to declare military spending off-limits in any moves toward fiscal austerity.  That perspective is best epitomized in a Wall Street Journal op-ed by Ed Feulner of the Heritage Foundation, Arthur Brooks of AEI and Bill Kristol of the Weekly Standard published on Oct. 4—a month before the tea party fueled a GOP landslide.  (Ed Crane and I penned a letter responding to that piece.)  Thankfully, it looks like neoconservative attempts to forestall a debate over military spending have failed. That debate is already well along.

Immigration and Election Day

Immigrants are a voting block worth courting, but it seems both Democrats and Republicans aren’t terribly concerned about earning immigrants’ allegiance. The sometimes-dehumanizing rhetoric hurled at immigrants by a small, vocal minority of Republicans would seem to push immigrant voters into the loving arms of Democrats. But Democrats have been in charge of two branches of the federal government for two years and have done nothing to reform our immigration system. For his part, President Obama pledged that 2009 would bear witness to comprehensive immigration reform.

Dan Griswold discusses the rhetoric surrounding immigration in light of today’s election for today’s Cato Daily Podcast (subscribe, already!):

On Election Eve…

With Tuesday’s election widely predicted to bring a near-historic shake-up of the political establishment, here are some things we can say for certain even before the first results are tallied:

  1. This election will be a win for economic conservatives, not social conservatives.  Not surprisingly given the economic climate, economic issues dominated the campaign, with social issues barely registering.  This was particularly helpful for Republicans, since economically conservative, socially moderate suburban voters, who backed Democrats in 2006 and 2008, switched to Republicans this year. There is a lesson here for Republicans in the future.
  2. In the months leading up to the election, we have heard a great deal about the so-called “civil war” in the Republican Party.   As it turns out, there wasn’t one.  Despite some spirited, even bitter, primary fights, Republicans of all stripes were able to unify around a common opposition to the Obama agenda.  But having achieved electoral success, Republicans will now be forced to confront the serious divisions in their party: tea partiers vs. the GOP establishment; economic conservatives vs. social conservatives; budget hawks vs. neoconservatives.  The “civil war” will be back with a vengeance.
  3. Voters will choose Republicans in this election because they aren’t Democrats.  It doesn’t mean that voters have fallen in love with the Republican party.  In fact, polls show that Republicans remain only slightly more popular than used car salesmen—or Democrats.  At best, voters are willing to give Republicans one last chance.  If they don’t deliver, it will be a long, long time before they get another one.
  4. No issue hurt Democrats as much as the health care bill.  It wasn’t just that voters hate the bill—they do—but that it crystallized the average American’s antipathy to a government that was too big, too costly and too out of touch.  Voters will declare that they don’t want government running health care…and come to think of it, they don’t want government running much else either.

Boehner Endorses More Medicare Spending: Meet the New Boss, Same as the Old Boss?

While flipping through the radio on my way to pick my son up from school yesterday afternoon, I was dumbfounded to hear Congressman John Boehner talk about repealing Obama’s Medicare cuts on Sean Hannity’s show.

I wasn’t shocked that Boehner was referring to non-existent cuts (Medicare spending is projected to jump from $519 billion in 2010 to $677 billion in 2015 according to the Congressional Budget Office). I’ve been dealing with Washington’s dishonest definition of “spending cuts” for decades, so I’m hardly fazed by that type of routine inaccuracy.

But I was amazed that the presumptive future Speaker of the House went on a supposedly conservative talk radio show and said that increasing Medicare spending would be on the agenda of a GOP-controlled Congress. (I wondered if I somehow misinterpreted what was being said, but David Frum heard the same thing)

To be fair, Boehner also said that he wanted to repeal ObamaCare, so it would be unfair to claim that the interview was all Bush-style, big-government conservatism. But it is not a positive sign that Boehner is talking about more spending before he’s even had a chance to pick out the drapes for his new office.