Topic: Government and Politics

A Niagara Falls of Money — So What?

NPR’s Andrea Seabrook had a truly disturbing discussion with House Appropriations Committee chairman David Obey (D-WI) about the absence of earmarks in the non-stimulus bill.

SEABROOK (voice-over): Instead of Congress, hundreds and hundreds of public servants all over the country will decide how to spend the economic stimulus money … But when you pull earmarks out of the bill, you also change the balance of power in the government. If members of Congress aren’t writing into the bill how the money is to be spent, then someone else is making those decisions … When this bill passes, a Niagara Falls of money will flow out of Washington and into the accounts of state highway commissioners, governors and legislatures, local school boards, county executives, even mayors …

OBEY: We simply made a decision, which took about three seconds, not to have earmarks in the bill.

SEABROOK (voice-over): This is David Obey, the chairman of the House Appropriations Committee. He helped write this bill, and he does not like being asked about earmarks.

OBEY: And with all due respect, that’s the least important question facing us on putting together this package.

SEABROOK: Does that mean, though, that Congress will have less control and less, in fact, ability to say, “You spend it in the way we wanted you to spend it”—

OBEY: Of course it does. Of course it does. So what? This is an emergency. And so, with all due respect, we have got to simply find a way to get this done as fast as possible, and as well as possible, and that’s what we’re doing.

SEABROOK: Aren’t there a thousand ways that this money could be spent badly, though?

OBEY: There are a thousand ways it could be spent badly. There are a thousand ways it could be spent well. So what’s new?

SEABROOK: What’s new is that you’re not telling them how to spend it as much as you usually do.

OBEY: So what?

SEABROOK: Won’t you be responsible when it’s spent badly, then?

OBEY: No, the person who spends the money badly will be responsible. We are simply trying to build as many protections in as possible. We’ve got more oversight built into this package than any package in the history of man. If money is spent badly, we want to know about it, so we can hold accountable the people who made that choice. And guess what? Regardless of what we do, there will be some stupid decisions made.

Will be?

The entire story is worth a listen.

The Incredible Growing Spending Bill

Headlines today tell us that Senate centrists are trying to trim the massive spending bill that President Obama is pressing for. They may even have found as much as $90 billion in cuts already. But remember: This snowballing kitchen-sink bill has already grown by more than $100 billion since it left the House. A cut of $90 billion would be less than 10 percent of its now gargantuan girth. It would leave the bill larger than the $819 billion monstrosity that passed the House, which would already be the largest spending bill in the history of the world. (Barney Frank may be right that the total cost of the Iraq war will end up being more than the cost of this liberal wish list — though right now it looks like a close race — but there were actually many separate authorizations for the war, so this remains the largest single spending hike.)

Can we afford this bill? No we can’t.

P.S. Don’t miss Charles Krauthammer, “The Fierce Urgency of Pork,” today:

It’s not just pages and pages of special-interest tax breaks, giveaways and protections, one of which would set off a ruinous Smoot-Hawley trade war. It’s not just the waste, such as the $88.6 million for new construction for Milwaukee Public Schools, which, reports the Milwaukee Journal Sentinel, have shrinking enrollment, 15 vacant schools and, quite logically, no plans for new construction.

It’s the essential fraud of rushing through a bill in which the normal rules (committee hearings, finding revenue to pay for the programs) are suspended on the grounds that a national emergency requires an immediate job-creating stimulus — and then throwing into it hundreds of billions that have nothing to do with stimulus, that Congress’s own budget office says won’t be spent until 2011 and beyond, and that are little more than the back-scratching, special-interest, lobby-driven parochialism that Obama came to Washington to abolish. He said.

Week in Review: Stimulus, the Drug War and Partisanship

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Stimulus Debate Heats up in Senate

President Obama’s stimulus bill moved to the Senate this week where it is facing stiff opposition from Republicans. In its current form, the bill still lacks enough votes to make it to the president’s desk.

The Cato Institute placed a full page ad in newspapers nationwide showing that there is no consensus among economists about the stimulus plan. The ad features a statement signed by more than 200 economists, including Nobel laureates and other leading scholars who agree that the best way to boost economic growth is to lessen the burden of government. Each day, more economists continue to add their names to the online version of the ad. On Monday, a new version of the ad with more names will run in The Wall Street Journal.

Read Chris Edwards and Ike Brannon’s recent article in the National Post, “Barack Obama’s Keynesian Mistake,” to learn more about the economic principles underlying the stimulus plan.

You can also watch senior fellow Alan Reynolds discuss the stimulus plan on CNN, Fox News and listen to his latest interview on the false consensus for stimulus.

If you think the word “stimulus” is a misnomer given the actual contents of the bill, then you’re not alone. Cato executive vice president David Boaz and senior fellow Daniel J. Mitchell discuss why the plan should not be termed a “stimulus.”

If you run a blog or Web site and want to take a stand against this massive government intervention plan, go to cato.org/fiscalreality and click “Spread the word.” We have created an online widget that you can post on your Web site that will show your readers that you do not agree with the stimulus plan.

The Washington Post Magazine Takes Another Look at the Berwyn Heights Tragedy and the Drug War

In an article in The Washington Post Magazine, author April Witt recounts the day police stormed into the home of Berwyn Heights, Md., mayor Cheye Calvo on a botched drug raid, killed his two dogs and held him and his mother-in-law at gun point. Police said they conducted the raid because a package containing marijuana had been delivered to Calvo’s doorstep earlier that day. It was later found that Calvo had nothing to do with the suspicious package.

Over the past 25 years, police agencies throughout the United States have increasingly become militaristic, using no-knock raids to carry out routine police work. But how far is too far? In the Washington Post article, Witt cites a Cato paper, “Overkill: The Rise of Paramilitary Raids Across America,” in which former Cato policy analyst Radley Balko examines the increasing role of military tactics in domestic police work, especially when involving drug enforcement.

Calvo spoke at a Cato forum in September, where he told his story about that day.

In Mexico, the drug war has had an even worse outcome than in the United States. While the Mexican government attempts to quell the illegal drug trade, violence has broken out along the border. Signs indicate that it will only continue to get worse. In a new Cato policy analysis, vice president for defense and foreign policy studies Ted Galen Carpenter says the only way to slow the violence is to abandon the prohibitionist model of the drug problem.

“As long as the prohibitionist strategy is in place, the huge black market premium in illegal drugs will continue, and the lure of that profit, together with the illegality, guarantees that the most ruthless, violence-prone elements will dominate the trade,” Carpenter writes. “Ending drug prohibition would de-fund the criminal trafficking organizations and reduce their power.”

New at Cato

Attention Struggling Workers in New York State…

Click here to see a good example of how your state government is spending your money.

For those disinclined to click, the headline reads: “State employee: I get $93,803 for no work.”

If I were a taxpaying New Yorker I would be miffed that a state employee was getting paid $93,803 to work.

Of course, defenders of state government employees will dismiss this story as an anomaly.  But a key paragraph in the story indicates why societal drains like Mr. Hinton are more common in state bureaucracies than one might think:

“He [Hinton] said he has essentially done very little work since about 1999 but has a competitive civil service position so that he is protected should layoffs occur and cannot be fired without due process, unlike the political appointees occupying posts he seeks.”

Having worked in the “management” side of state government, I can attest that due process for state employees = incompetence insurance.

The Stimulus and Socialized Medicine

Most of the debate over the stimulus bill (or the Big Boondoggle as my colleague David Boaz calls it) has been over the cost and wasteful spending. Less mentioned are the bill’s many provisions that would increase government control over the U.S. Health Care system. For example,

  • The bill would spend $83 billion to subsidize state Medicaid costs, including paying 100 percent of the cost of Medicaid coverage for unemployed workers and their families. And there would be no income or asset limits whatsoever on eligibility. As a result, still more of the middle-class would be shifted into government health care. Nor is the extension of eligibility limited to just the middle-class. A Republican amendment to bar millionaires from the program was stripped out before final passage in the House.
  • For the unemployed who don’t go directly into government-run health care, the stimulus bill would spend $30 billion to extend COBRA coverage, and have taxpayers pick up 65 percent of premium costs. It would also require employers to continue COBRA coverage until a worker becomes eligible for Medicare. (Currently employers are only required to provide COBRA coverage for 18 months). Studies show that this would raise the cost of insurance for employers and workers.
  • The bill would spend $1.1 billion to create a Comparative Effectiveness Council, so that the federal government can decide on whether medical treatments are worth the money. Once the federal government decides how medicine should be practiced, according to the summary featured in a discussion draft of the bill, “interventions…that are found to be less effective and in some cases more expensive will no longer be prescribed.”
  • And, the stimulus would also spend some $20 billion for the federal government to muscle its way into the growing market for electronic medical records.

Does anyone actually believe that increasing government control over one-seventh of the U.S. economy is going to be stimulative?

Don’t Call It “Stimulus”

David Friedman raises a very good point:

A well chosen name wins an argument by assuming its conclusion. Label cash subsidies to foreign government as “foreign aid” and who can be so hard hearted as to oppose them? Call subsidies to the public schools “aid to education” and you neatly skip over the question of whether additional spending in the public school system results in more education.

And “economic stimulus” is a classic example.

Everyone—including Obama, back when he was running for President—is against deficit spending. Relabel it “stimulus” and everyone is for it. The label neatly evades the question of whether having the government borrow money and spend it is actually a way of getting out of a recession—a claim for which evidence is distinctly thin. It is stimulus, so obviously it must stimulate.

So what should we call it? President Obama’s spending proposal? The deficit-spending package? I think we’d have trouble getting the media to call it the Big Boondoggle. Maybe the government bailout, following the Wall Street bailout and the auto bailout?

Alas, we’re probably stuck debating the “stimulus.” But that means the battle was half lost before it began.

Cato Unbound: An Appreciation of Partisanship

This month’s Cato Unbound is up, featuring a lead essay by Harvard Professor Nancy Rosenblum. She discusses themes developed more fully in her book On the Side of the Angels: An Appreciation of Parties and Partisanship. Rosenblum makes the case that political parties have gotten an undeserved bad reputation, and that they do useful, unappreciated coordinating work in democratic politics.

In the first response essay, Brink Lindsey replies in essence that political parties are much better than they used to be, but there’s still plenty to complain about. Response essays by Henry Farrell of George Washington University and James Fishkin of Stanford University will appear on Friday and Monday, respectively, followed by a blog chat among the authors.

My own biggest questions on the topic are as follows.

First, is it even meaningful to say that we are “for” or “against” partisanship? Or, when we say this, are we really just saying that we’re for or against certain aspects of partisanship? Political parties seem to appear wherever we find the concepts of representative democracy and loyal opposition. Complaining about political parties is a bit like being against the weather.

We may hate many of the things that political parties do, but their main alternatives seem to be dictatorships and death squads. Even the most committed anti-partisans wouldn’t go that route. And even those who cheer for partisan politics may seem to be making a virtue of necessity.

Second, what about the legal regime that sustains the two-party system? The rules that support partisan politics were written by partisans, after all. Certainly we can’t just take them as a given. Ballot access regulations, campaign finance rules, and the incumbent advantage help to give us the specific type of partisan politics we have. Who else gets to write their own ticket like that, and should we let them?