Mandatory Spending Continues to Drive the Budget

This morning, the Congressional Budget Office (CBO) released its updated Budget and Economic Outlook report, known in Washington, D.C. parlance as the “baseline.” This report details CBO’s projections on federal spending and revenue for this year and into the future.

Below are a few key points from the new report.

  • The deficit for 2014, the difference between federal spending and revenue, will be $506 billion, up from the $492 billion forecasted in April. This is driven by lower-than-expected corporate income tax revenue.
  • According to CBO, Medicaid spending jumped 15 percent year-over-year. Adding millions of new individuals under ObamaCare to Medicaid comes at a steep price.  Social Security spending jumped 4.6 percent.
  • The entitlement programs continue to drive spending projections and put enormous weight on the budget. CBO estimates that Social Security, the major health care programs, and interest account for 85 percent of projected spending increases over next ten years.
  • Mandatory spending–which includes the big entitlement programs–will increase 5.5 percent annually over next ten years. ObamaCare leads the way. The newly created subsidies for health insurance will cost taxpayers $1 trillion over ten years, growing from $17 billion in 2014 to $450 billion in 2024.
  • The one bright spot continues to the Budget Control Act of 2011 which is controlling the growth of discretionary spending. Fiscal Year 2015 spending will be $1.016 trillion compared to $1.014 trillion in FY14.

New Front Opening in Core War

Reports are out this morning that Louisiana will be challenging in court federal coercion behind the Common Core standards. If so, it will open a new front in the war against the Core, a standardization effort that has been listing badly in public opinion, but nonetheless survives in the vast majority of states. That could very well change should the force of Race to the Top funding or, more importantly today, waivers from the No Child Left Behind Act, be eliminated by the courts, as Core supporters likely knew when they asked for federal pressure.

Does this suit have a chance of success? I’m not a lawyer – though I’ll be consulting a few! – so this is not the best-informed legal analysis. From what I do know, though, the chances of prevailing are middling, at best. The courts in the past have been pretty lenient in cases in which Washington gets states to do its bidding in exchange for funding when the feds don’t have authority in the Constitution to do something. And the Louisiana suit hinges largely on federal action that seems very intentionally to push the Core – standards “common to a majority of states” under RTTT, and only one other standards option to get a waiver – but that doesn’t state outright that the Core must be adopted. That way the feds can say they aren’t prescribing a specific “program of instruction,” which would clearly violate the letter of several education laws, while in reality very much requiring such a program.

Sadly, one major diversion likely to be employed by Core opponents to battle this suit is impugning Governor Bobby Jindal’s motives. Since Jindal first reversed course on the Core, supporters of the standards have said his stance is all about presidential aspirations and not about what’s best for kids. Those may well be his motives, I don’t know. But as with all aspects of the Core debate, we should focus on the merits of the arguments being employed, not the motives for offering them. (This goes for opponents who attack people like Bill Gates, too.) We should look at the merits of the lawsuit, which requires an honest assessment of both the Constitution and federal education statutes, just as we should look at the research on national standards, the content of the Core, and the reality of how so many states adopted standards that are now heavily disliked.

Do those things, and I think the Core loses hands down. Ignore them completely, and everyone loses.

Religious Liberty in China: The Good, the Bad, and the Ugly

BEIJING—Today China’s big cities look much like urban areas anywhere in the world. There are lots of cars. What I didn’t expect was to see a Christian “fish” on an auto. 

Religion is “on the rise,” one U.S. diplomat told me.

It also is under attack by the Chinese government.  As I wrote in the American Spectator online:  “When it comes to religious liberty in the People’s Republic of China, there’s the (surprisingly frequent) good, (not so constant) bad, and (still too often) ugly.”

China turned hostile to Christianity after the 1949 revolution. The PRC has routinely been ranked among the worst religious persecutors. 

In its latest report on religious liberty, the State Department observed: “The government exercised state control over religion and restricted the activities and personal freedom of religious adherents when these were perceived, even potentially, to threaten state or Chinese Communist Party (CCP) interests, including social stability. The government harassed, assaulted, detained, arrested, or sentenced to prison a number of religious adherents.” 

Nevertheless, the experience varied geographically:  “In some parts of the country, however, local authorities tacitly approved of or did not interfere with the activities of unregistered groups.”

The group China Aid, headed by Bob Fu, a former house church pastor, compiled a list of incidents. The authorities in Zhejiang Province have been particularly repressive, destroying churches and crosses. 

Provincial officials pointed to the zoning laws to justify this and similar actions elsewhere, but Renee Zia, of Chinese Human Rights Defenders, argued that it was just “an excuse for the current wave of clamping down on Christian churches.” The government’s real concern is Christianity’s growth. Provincial party chief Xia Baolong reportedly complained that Christian symbols were too “conspicuous.”   

Still, the situation in the PRC is far better than it was even a decade or two ago. The majority of persecution cases, wrote blogger Renee Riley, involved Christians who “were either engaged in activity which the government perceived as a threat, or they ran afoul of the economic or political interests of corrupt local leaders.” Open Doors reported that the government has “chosen not to strictly control Christian activities in most regions in China,” and that the majority of churches “are not registered, but tolerated.” 

The number of Christians was estimated in 2011 by Pew Research at 67 million and likely is much higher today. There already may be more Christians than Chinese Communist Party members. Yang figured there could be 247 million Christians by 2030. 

The PRC hopes to constrain Christianity by forcing it into a “patriotic” channel. Nevertheless, the PRC may not find it easy to create a Sinicized Christianity. I attended the 800-member Beijing Chaoyang Church. There were 70 baptisms on the day I attended. The church is state-sanctioned, but the sermon seemed orthodox theologically (simultaneous translation was provided for foreigners).

My friend Phil Sheldon, who regularly attends the church with his Chinese wife, spoke positively of his experience. He earlier wrote: “I have seen and heard Christianity expressed in public. I have been in restaurants with Christian music playing.”  And then there’s that car sporting a “fish”!

Even some CCP members recognize the challenge.  Admitted Wang: “If we rush to try to push for results and want to immediately ‘liberate’ people from the influence of religion, then it will have the opposite effect.” 

In the PRC today, people are ever less willing to worship the false god of communism.

The Future of Dollarization in Ecuador

A new “monetary and finance” law that was approved by Ecuador’s National Assembly in July, is expected to be signed into law any day now. Many suspect that this marks the beginning of the end for dollarization in Ecuador, which began in January of 2000. But the underlying threat to dollarization is the incessant growth of public spending. Losing dollarization would be a sad development, considering it is what has protected Ecuadorians from one of the worst evils of populism: high inflation.

The remarkable contribution dollarization has made to the Ecuadorian economy is worth noting. A 2010 study published by Ecuador’s central bank (BCE) analyzed the first decade of the absence of independent monetary policy and found that average GDP growth increased from -6.3 percent during the 1990s to 4.4 percent during the 2000s; annual inflation decreased from a high of 90 percent in September of 2000 to single digits within a year, and has averaged 3 percent since 2004. Additionally, interest rates went down immediately, thereby reducing the cost of capital. According to the World Bank, the percentage of Ecuadorians living on less than $2 a day (PPP) decreased from 37.7 percent in 2000 to 10.6 percent in 2009.

Of course, there are many problems dollarization cannot solve and the positive outcomes above are not solely due to it. But it probably has been one of the main factors contributing to Ecuadorian growth prior to and during our current “revolutionary” government. In fact, Ecuador owes its superior economic performance today–compared the two most prominent populist nations in the region, Argentina and Venezuela–mostly to dollarization.

Climate Alarmism: When Is This Bozo Going Down?

Global Science Report is a feature from the Center for the Study of Science, where we highlight one or two important new items in the scientific literature or the popular media. For broader and more technical perspectives, consult our monthly “Current Wisdom.”

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Climate alarmism is like one of those pop-up Bozos. No matter how many times you bop it, up it springs. In fact, the only way to stop it, as most kids learn, is to deflate it. In this case, the air inside Bozo is your and my tax money.

Two scientific papers released last week combine for a powerful 1-2 haymaker, but, rest assured, Bozo springs eternal. The first says that human aerosol emissions are not that responsible for offsetting the warming influence of greenhouse gas emissions, while the second finds that the observed warming from human greenhouse gases is less than a lot of people think.

We aren’t at all surprised by the first result.  The cooling effect of sulphate particulates, which go into the air along with carbon dioxide when fossil fuels (mainly coal) are combusted, was only invoked in the mid-1980s, when the lack of warming predicted by computer models was embarrassingly obvious.

This is the kind of thing that the iconic historian of science, Thomas Kuhn, predicted in his classic book, The Structure of Scientific Revolutions. When a scientific “paradigm” is assaulted by reality, increasingly ornate and bizarre explanations are put forth to keep it alive. Sulfates smelled like one of those to us back in the 1980s, and now it looks like the excuses are finally getting comeuppance.

The second result also comes as little news to us, as we have been saying for years that the human carbon dioxide emissions are not the only player in the climate change game.

The two new papers, in combination, mean that the human influence on the climate from the burning of fossil fuels is far less than what the IPCC’s ensemble of climate models says it is. This also goes for the U.S. Global Change Research Program, the EPA ,and the White House.

Rest assured, though, Bozo will rise again—despite a near-continuous barrage of blows supporting the idea that the climate’s sensitivity to human greenhouse gas emissions is far too low to justify any of the expensive and futile actions emanating from Washington and Brussels.

Years After the Recession, Welfare Rolls Hit New Highs

New Census data shows that the number of households receiving welfare benefits hit a record high of almost 33.5 million in the fourth quarter of 2012. While part of the surge was due to the recession, the proportion receiving benefits has increased from 25.2 percent to 27.4 percent since the recession officially ended in June 2009. These inflated welfare rolls are not just a temporary response to an economic downturn, and could instead become the new normal. This poses a problem not only for the country as a whole, but for the individuals beneficiaries as well.  These welfare programs could eventually become unaffordable as programs for the elderly take up an increasing share of our budget. At the same time, for a record number of beneficiaries the structure of our current system could actually make it less likely they escape poverty for good.

Of particular concern are the households participating in three or more means-tested non-cash programs, which has also increased significantly, rising from 7.3 percent of all households at the end of the recession to 8.6 percent by the end of 2012. Participation in multiple programs is even more commonplace among families headed by a single mother, similar to the case family we used in The Work versus Welfare Trade-off 2013. In that paper, we found that in some states, the welfare benefits package available could be so generous that it could disincentivize work in some cases. One critique of the paper was that not every low-income household qualified for the programs in our benefit package. This is true, and we acknowledged as much in the paper. We even included a scenario where the family only received benefits from a more limited package. However, this Census data shows that cases like the one we examinedare becoming increasingly common. Almost 44 percent of households headed by a single mother participated in three or more means-tested non-cash programs in 2012, compared to only 38.7 percent when the recession ended.  While the point remains that not every low-income household participates in every welfare program, many do participate in multiple programs, and the proportion has continued to increase years after the recession ended.

Defeat the Islamic State by Allowing Syria and Others to Kill Radicals

Administration officials proclaim the Islamic State’s isolated experiment in 7th Century Islam to pose a dire threat to America.  After promising to strictly limit the military mission in Iraq, the president is preparing to expand the war to Syria, where the administration is working to overthrow the Assad government—which now blocks Islamic control over the entire country.  Instead, the administration should encourage other nations, starting with Syria, to kill ISIL radicals.

Iraq is a catastrophic failure.  Yet the Obama administration risks falling into war there again. 

Gen. Martin E. Dempsey, chairman of the Joint Chiefs of Staff, wants to address the Islamic State “on both sides of what is essentially at this point a nonexistent border” between Iraq and Syria. 

However, Washington’s intelligence capabilities in Syria remain limited.  More important, the Obama administration has spent three years attempting to overthrow Syria’s Assad regime, which possesses an air defense system and warned that it would treat any attacks as “aggression.” 

The administration should reconsider its policy in Syria.  As I point out in Forbes online, “The Assad government is even more committed than Washington to eliminating the Islamic State as a geopolitical force.”

Yet America’s support for the opposition has weakened the Assad government’s ability to fight ISIL.  Washington’s preference for less radical groups also has discouraged Damascus from targeting the Islamic State, whose existence inhibits U.S. involvement. 

Reaching a modus vivendi with Damascus would encourage Assad to focus on ISIL.  Assad is no friend of liberty, but Washington must set priorities.