Topic: Government and Politics

Finally, Some Not-So-Bad News on the Budget

The big surprise in the Congressional Budget Office mid-year budget estimates released today isn’t that the year-to-year deficit shrank again.  Or that the long-term liabilities in Medicare and Social Security continue to impend. 

The surprise is that federal spending will only grow about 3% in the current fiscal year that ends this October.  That’s a big improvement over the annual average 7% growth we’ve seen since the first day of the George W. Bush presidency.

How did that happen?  Those familiar with my previous research will probably not be surprised to hear that the new political reality – divided government – has something to do with it.

True, agriculture subsidies are lower this year as a result of higher crop prices.  And the run-up in spending on a variety of programs in 2006 – like the payouts on flood insurance policies after Hurricane Katrina – was temporary.  The most remarkable factor in the trends, however, is that non-defense discretionary spending has been frozen for the first time since the maiden budget of the “Republican Revolution” Congress.  (If the trends CBO estimates hold for the remainder of the year, such spending might actually decline by $1 billion.) 

Sure, part of this is also the result of a decline in spending on federal Katrina relief.  But there’s something else going on, too.  Earlier this year, the new Democratic Congress decided to put the federal budget on auto-pilot until October.  Instead of passing new appropriations bills to fund the government for the entire year, they passed what is called a “continuing resolution” to keep the government operating. 

This didn’t happen because the Democrats were all that interested in spending less money.  They just wanted to get the old budget work left to them by the outgoing Republican Congress off the table so they could get on with more ideological-base-friendly legislation, like the minimum wage increase.  And the Democrats knew that the president might finally start vetoing legislation, too.  A protracted battle over the budget wasn’t something they wanted to spend their energy on in the first half of the year.  Thus, the auto-pilot continuing resolution: a piece of legislation that keeps the government running at basically the inflation-adjusted level of the previous year. 

With the White House veto strategy finally a credible threat*, it looks like we might have a similar sort of outcome on spending this year, too.  Isn’t divided government wonderful? 


* As I told David Jackson of USA Today a few weeks ago, George W. Bush “dislikes Democrats more than he likes big government.”

Get Rid of the National Weather Service

Because of technological advances, there is very little reason for taxpayers to shell out nearly $1 billion annually to finance a national weather service. As John Lott explains at Foxnews.com, private forecasters exist and (gee, what a surprise) they do a better job than government bureaucrats:

Despite dire predictions from the National Hurricane Center, no hurricanes hit the U.S. last year. …private weather forecasting companies predicted the threat to New Orleans well before the National Weather Service. In fact, AccuWeather issued a forecast that the hurricane would hit New Orleans 12 hours earlier than the government service. …It is not just for hurricanes that private forecasting comes out on top. A new study by Forecast Watch, a company that keeps track of past forecasts, found that from Oct. 1, 2006, through June 30, 2007, the government’s National Weather Service did very poorly in predicting the probability of rain or snow. Comparing the National Weather Service to The Weather Channel, CustomWeather, and DTN Meteorlogix, Forecast Watch found that the government’s next-day forecast had a 21 percent greater error rate between predicted probability of precipitation and the rate that precipitation actually occurred. In looking at predicting snow fall from December 2006 through February 2007, the National Weather Service’s average error was 24 percent greater. “All private forecasting companies did much better than the National Weather Service,” the report concludes.

Tax Code Industrial Policy

Millionaire football fans are among the beneficiaries of supposed emergency hurricane tax relief according to an AP report. The only positive aspect of this story is that the special tax breaks deprive politicians of extra money to waste (though they will continue to borrow and waste, so don’t get too excited). Actually, this corrupt form of tax-code industrial policy also has another positive attribute – it is an excellent example of why the internal revenue code should be junked and replaced with a simple and fair flat tax:

…federal tax breaks designed to spur rebuilding are flowing hundreds of miles inland to investors who are buying up luxury condos near the University of Alabama’s football stadium. About 10 condominium projects are going up in and around Tuscaloosa, and builders are asking up to $1 million for units with granite countertops, king-size bathtubs and ‘Bama decor, including crimson couches and Bear Bryant wall art. …And they intend to take full advantage of the generous tax benefits available to investors under the Gulf Opportunity Zone Act of 2005, or GO Zone, according to Associated Press interviews with buyers and real estate officials. …The GO Zone was drawn to include the Tuscaloosa area even though it is about 200 miles from the coast and got only heavy rain and scattered wind damage from Katrina. …The GO Zone investor tax breaks are credited with contributing to the condo boom in Tuscaloosa.

RomneyCare Falls A Bit Short

When Mitt Romney signed the Massachusetts health care plan into law, he bragged that it would provide universal health care coverage. In fact, he still says that on the campaign trail. After all, the plan does mandate that everyone in the state buy health insurance. The state has done pretty well at the welfare aspects of the bill, signing up some 150,000 people for subsidized insurance (families of four earning as much as $62,000 are eligible for subsidies). But the latest reports from Massachusetts indicate that of 170,000 people who are uninsured but have incomes too high for subsidies, only 17,500 have complied with the mandate so far. Someone should have pointed out that the Massachusetts mandate is probably unenforceable and almost certainly not going to achieve universal coverage. Oh, that’s right, we did.

Term Limits and the Happiness of the People

Hugo Chavez is the latest public official to join the effort to roll back term limits. He will soon be free of the limits on his terms as president of Venezuela as well as other constraints on his drive toward total power. If you ever wondered whether term limits contravened excessive ambition, perhaps President Chavez suggests an answer.

Chavez is seeking to end his term limit and other measures to increase his power “to guarantee to the people the largest amount of happiness possible.”

Is he so different from American politicians? He offers the voters happiness (not liberty) and demands power adequate to that end. Constraints on power like term limits are so, you know, neo-liberal, so pre-New Deal.

What Are You, Some Kind of Communist?

I never sprung for their six(!)-volume history of Whitewater, but I used to love the Wall Street Journal’s Clinton-bashing during the ’90s. Sure, writers for the WSJ could get a little, uh, exuberant with some of their charges, but even if they couldn’t prove that our 42nd president was a drug-running rapist, you could usually count on finding some good dirt on Bill and Hill on the editorial and op-ed pages. 

Well, boy, do I feel like a useful idiot now. It turns out that by savaging our president throughout the ’90s, the Journal was “taking a page from the old Soviet playbook.” Say it ain’t so, Paul Gigot!

Anyway, that’s what I got out of ”Propaganda Redux,” the op-ed by Ion Mihai Pacepa that ran in Tuesday’s Wall Street Journal, even though the author’s main focus, predictably, is on Bush-bashing. Pacepa is “the highest-ranking intelligence official ever to have defected from the Soviet bloc,” so he knows something about anti-American commie tactics, like spreading doubts about the president. You see:

Sowing the seeds of anti-Americanism by discrediting the American president was one of the main tasks of the Soviet-bloc intelligence community during the years I worked at its top levels. This same strategy is at work today, but it is regarded as bad manners to point out the Soviet parallels. For communists, only the leader counted, no matter the country, friend or foe.

As Pacepa recounts, Soviet bloc spies would stop at nothing in their disinformation campaign, portraying “Nixon as a petty tyrant, Ford as a dimwitted football player and Jimmy Carter as a bumbling peanut farmer.” When you think how close Americans came to believing some of that stuff, it really gives you a chill. We might well have lost the Cold War. 

Yet even today, over a decade and a half after the collapse of the Soviet Union, the ominous parallels remain. As Pacepa notes, “At the 2004 Democratic National Convention, for example, Bush critics continued our mud-slinging at America’s commander in chief.” This will not do, for, as Pacepa explains in the last paragraph:

[T]he communists got it right. It is America’s leader that counts.

And there you have it. Right in the pages of the Wall Street Journal. The second Clinton presidency sure is going to be interesting.