Topic: Government and Politics

Too Close for Comfort

NPR reports on the Illinois legislative debate about impeaching Gov. Rod Blagojevich:

Their case for impeachment goes beyond criminal allegations. They say he abused the power of his office: bypassing the Legislature to create new programs he couldn’t pay for; circumventing hiring laws to give jobs to political allies; and misappropriating taxpayer funds.

“He has snubbed his nose at that oath of office and, therefore, snubbed his nose at the people and the constitution,” said Republican Rep. Mike Bost.

It’s a good thing for presidents that members of Congress don’t apply such standards in Washington.

You Say McCaskill, I Say McCaskill

A headline from yesterday’s online version of the St. Louis Post-Dispatch:

McCaskill joins McCain in anti-earmark effort, announces local grants

Ugh.  One of my chief policy pet peeves is the idea that congressfolk earmarking money to special interests is bad, but having bureaucrats dole out the same sort of cheese through grants and loans is A-OK.

Says Sen. McCaskill (D-MO):

We are looking at deficits in the trillions, and I think Americans are fed up with the way Washington has been spending their money…. Changing the earmark culture is not the whole solution to bringing fiscal responsibility back, but it’s a start.

So far so good, but then:

Also Wednesday, McCaskill announced two grants from the U.S. Department of Agriculture (USDA):

  • A total of $752,560 to the city of Silex in Lincoln County. “The money is being provided through the United State’s Department of Agriculture’s Rural Development funding initiative, which works to improve the economy and quality of life in rural communities by supporting and providing government loans and grants…. According to the USDA, the city will receive a grant of $387,560 and a low-interest government loan of $365,000. The funds will be used to upgrade the centralized sewer system, providing improved water treatment facilities and adding thousands of feet in main line.”
  • $50,000 to the city of Berger in Franklin County. The money comes from the same USDA program targeting rural communities. “According to the USDA, the funding will be used to provide a centralized sewer system that will improve the health and sanitary conditions of the area by providing water to residents who currently rely on failing septic tanks,” the senator’s office said.”

So, if another member of the Missouri congressional delegation had instead instructed the USDA to redistribute taxpayer money to these two Missouri communities via language in a piece of legislation it would have been bad?  According to Sen. McCaskill, the answer is apparently “yes.”

Look, I’m happy Sen. McCaskill is on board the anti-earmark train.  Kudos to her.  But whichever means Congress chooses, the end is the same: taxpayers on the hook for special interest spending.

Cass Sunstein and the Cato Institute

The Washington Post is reporting that Harvard law professor Cass Sunstein will be named director of the Office of Information and Regulatory Affairs, the White House’s regulatory review office. The appointment is baffling, not because the Obama administration has chosen Sunstein (he is a first-rate thinker), but because Sunstein has (apparently) accepted it. OIRA chief is one of the most thankless jobs in Washington, and the office has historically shown itself to be a victim of the political winds no matter how sharp-minded and sincere the chief is.

Sunstein would not fit the label “libertarian,” but he is, in his own way, a supporter of liberty. And he has been a good friend to the Cato Institute, speaking here and writing for Regulation (1, 2).

I wish Cass well in this difficult new job.

Does Congress Deserve a Pay Hike?

Richard Rahn suggests they do not:

Most of us would like to be in the position of voting for our own pay raises from an employer who has almost unlimited access to money … . Given that members of Congress were in a large part responsible for the current economic mess, it is hard to see how they can justify a raise … .

Well, at least three bills in the new 111th Congress would deny members a pay increase in fiscal 2010.

One of them should be attached to any big “stimulus” spending bill. But I imagine Congress is less interested in shows of rectitude from its own membership than from the business leaders it has bailed out.

Enjoy the Bowls—You’re Paying for Them

In the Wall Street Journal, Mark Yost explores the taxpayer subsidies to major college football bowl games:

while everyone’s fretting over the bailout package for the auto industry, most taxpayers would be shocked to learn that they’re also footing the bill for some of these highly profitable bowl games. From 2001 to 2005, seven tax-exempt bowls received $21.6 million in government aid.

During that time, 38 percent of the Brut Sun Bowl’s revenue came from a Texas rental-car tax. Now that’s Brutish.

And what do the bowls do with those taxpayer dollars? Well, they put on a football extravaganza, of course. But also:

To ensure the bowl games maintain their tax-exempt status, the committees hire state and federal lobbyists. Watts Partners, the Washington, D.C., lobbying firm run by former University of Oklahoma quarterback and Rep. J.C. Watts, has been paid more than $500,000 in consulting fees by the BCS.

So, as happens with many other government-funded enterprises, taxpayers’ money is spent on lobbyists to keep the taxpayers’ money flowing. Some of the money also goes to pay bowl executives upwards of $400,000. Leaving aside the issue of why tax-funded entities should pay their executives more than the president of the United States, I’m not surprised that bowl committees pay a CEO a handsome salary to make everything work perfectly. But I wonder: We hear a lot of complaints about the high pay of corporate CEOs. If the executive director of a $30 million bowl game is paid $400,000, how much should the CEO of a $30 billion company get?

More on taxpayer subsidies for sports business here and here. A lengthy bibliography here (pdf).

$1.2 Trillion Deficit

Before 1987, Americans only needed to understand the word “billion” to get a handle on federal budget numbers. Today, the word “trillion” is the needed metric in budget discussions.

The Congressional Budget Office released an update to its budget projections today, and the figures show that the federal deficit for fiscal 2009 will be $1.2 trillion. That deficit represents 8.3 percent of GDP, the highest share of the economy since World War II. Thus, a burden the size of 8 percent of all income earned in the United States this year is being thrust onto tomorrow’s taxpayers.

Here are some other observations on the data:

- If Congress passes a so-called stimulus package in coming weeks of say $800 billion, the 2009 deficit will top $2 trillion. Even the biggest critics of Washington’s spendthrift ways never thought they would see a number like that.

- The CBO shows federal spending in 2009 will be about $3.54 trillion. This number includes the spending effect of TARP and the federal takeover of Fannie and Freddie. But let’s consider those to be extraordinary items and take them out for a minute. And let’s add in $24 billion more for Iraq this year, as CBO indicates. The result is that – even aside the financial bailouts – federal spending would be about $3.165 trillion this year. That figure is up 6.3 percent over 2008, and up 70 percent over 2001, Bush’s first year in office.

- The CBO puts the deficit in fiscal 2010 at $703 billion. But that low-balls Iraq costs again, and doesn’t include extension of the AMT and other minor expiring tax provisions. Add those in, and the deficit in 2010 will be at least $829 billion.

Keynesian economists believe that government budget deficits “stimulate” the economy during a recession. But we’ve got $1.2 trillion this year and $800 billion next year of deficit “stimulus” without any special “stimulus” package.

Isn’t that enough? If I get up in the morning and drink five cups of coffee and that doesn’t stimulate me, I don’t go and drink another five. I’d recognize my addiction problem and start reforming my bad habits. Federal policymakers should do the same.