McCain’s Budget: Balance by 2013?

In a new campaign document, John McCain detailed some of his economic proposals today. The promise that caught my eye is a pledge to balance the federal budget by 2013. That is curious promise for him to make.

The Joint Committee on Taxation projects that federal revenues in fiscal 2013 – with the extension of the current tax cuts and AMT relief – will be 17.6 percent of GDP.

This year federal spending will come in at about 20.6 percent of GDP. That means that in four years a President McCain would cut spending worth about 3 percent of GDP, or about $427 billion annually in today’s dollars.

That would be fabulous, and Mr. McCain can read my Downsizing plan to find out exactly where to cut. Indeed, he might have already read it (see the picture). However, today’s plan from McCain includes few specifics on discretionary spending cuts, and his (laudatory) entitlement reforms would probably not generate major savings in just the first four years.

Here’s where fiscal conservatives get nervous about Mr. McCain’s intentions. In the same campaign document. McCain repeatedly lauds bipartisan efforts to fix the budget. Thus, if elected, would he actually fight for $427 billion in federal spending cuts? Or would he just trim some minor waste and earmarks, and make up the vast bulk of the budget gap with tax increases in the name of bipartisanship?

To end on a positive note, we have seen in recent years that federal revenues are highly dependent on the strength of the economy. If balancing the budget is the main fiscal goal of the next president, he will need to both cut spending and support pro-growth economic policies. To McCain’s credit, his tax proposals are very growth-oriented, and an economic boom could well boost revenues to higher levels than currently projected.  

Telco Immunity Is Just the Icing on the FISA Bill

I’ve got an in-depth piece at Ars Technica examining the provisions of the FISA “compromise” that the Senate will vote on this week. Most of the media coverage has focused on the telecom immunity question, but I thought it was important to dig into the law’s other provisions, which are potentially more important in the long run. Sadly, but not unexpectedly, the news isn’t good:

When it comes to judicial oversight of domestic-to-foreign calls, the legislation the House passed last month is an unambiguous victory for the White House and a defeat for civil libertarians. The legislation establishes a new procedure whereby the Attorney General and the Director of National Intelligence can sign off on “authorizations” of surveillance programs “targeting people reasonably believed to be located outside the United States.” The government is required to submit a “certification” to the FISA court describing the surveillance plan and the “minimization” procedures that will be used to avoid intercepting too many communications of American citizens. However, the government is not required to “identify the specific facilities, places, premises, or property” at which the eavesdropping will occur. The specific eavesdropping targets will be at the NSA’s discretion and unreviewed by a judge. Moreover, the judge’s review of the government’s “certification” is much more limited than the scrutiny now given to FISA applications. The judge is permitted only to confirm that the certification “contains all the required elements,” that the targeting procedures are “reasonably designed” to target foreigners, and that minimization procedures have been established.

Crucially, there appears to be no limit to the breadth of “authorizations” the government might issue. So, for example, a single “authorization” might cover the interception of all international traffic passing through AT&T’s San Francisco facility, with complex software algorithms deciding which communications are retained for the examination of human analysts. Without a list of specific targets, and without a background in computer programming, a judge is unlikely to be able to evaluate whether such software is properly “targeted” at foreigners.

The House legislation also drastically extends the timeline for reviewing surveillance activities, potentially allowing the government to commence eavesdropping and then drag out judicial review for months. Under existing law, the government must obtain judicial approval within 72 hours of the start of emergency wiretapping. In contrast, the judicial review of “certifications” can stretch out as long as four months. After beginning eavesdropping, the government has a week to submit its “certification” to the FISA court, which has 30 days to review the application. If the judge finds problems with the certification, the government can continue eavesdropping for another 30 days before it is required to comply with the order. And the government can buy still more time by filing an appeal to the FISA Court of Review. The appeals court may take as long as 60 days to make its decision, and the government will often be allowed to continue eavesdropping throughout the process of judicial review. This means that in many cases, the government will have completed its spying activities long before the courts reach a decision on its legality.

I point out that after a 2002 court decision, there are now few restrictions on coordination between intelligence-gathering and law enforcement agencies. So while the NSA wouldn’t be able to specifically target American citizens for surveillance, it could follow suggestions from the FBI to tailor its filters to intercept evidence of American citizens engaged in, say, tax evasion or Internet gambling. Terrorism would need to be a “significant purpose” of the surveillance, but if these “intelligence gathering” activities can be designed to also catch a significant number of domestic criminals, so much the better!

It’s also important to remember that, as I write over at the Technology Liberation Front, the FBI has a long history of engaging in illegal wiretapping even when doing so is expressly prohibited by statute. The same is true of the NSA. Therefore, it’s sheer fantasy to imagine that the executive branch won’t exploit every loophole available to it. Federal spying agencies will do what they’ve always done: push the law to the breaking point in pursuit of more sweeping spying powers, and maybe break the law outright. This is why judicial oversight is so important, and why it’s so disturbing to see Congress replace traditional warrants with “certifications” that can cover broad eavesdropping programs. That will make abuses of power much easier to carry out and much harder for judges to monitor.

Still Don’t Think Universal Coverage Is a Religion?

In case my last post didn’t convince you that universal coverage is a religion, here is its apostle’s creed:

To believe in universal health care is to believe that we can do more and do better, all at once – that it is possible to have hospitals full of high technology and emergency departments with room for all comers; that it is possible for people to choose their doctors and have a say in their treatments; that it is possible to make the economy more free and more efficient; and that it is possible to do all of this for everybody, not just an economically or medically privileged few, in a way we can all find affordable.  [Emphasis added.]

(As delivered by Church of Universal Coverage high priest Jonathan Cohn and chronicled in the book Sick, chapter 9, p. 231.)

I may think that government often serves the few at the expense of the many, that people respond to incentives, that tradeoffs are unavoidable, that there may be better ways to promote health, and that introducing coercion into human affairs creates more problems than it solves. 

But just try telling that to someone who believes.

Who Killed the Economy?

Since America’s economy is still growing and our living standards are far above the vast majority of people in other developed nations, any game entitled “Who Killed the Economy” is guilty of overstatement. But setting aside that small detail, Portfolio.com has an amusing interactive game that allows you to choose, via an NCAA-style bracket, who is responsible for America’s economic woes.

Sadly, there is no entry for Congress, Democrats in Congress, or Republicans in Congress, but there are plenty of good choices. Even though I think Greenspan and Bernanke probably deserve to win because of their easy-money policies, I decided to award first place to Fannie and Freddie because they are such loathesome examples of how subsidies and favoritism distort markets and harm growth. They may not cause the same amount of damage to overall economic performance as politically-pliable central bank governors, but I graded on a most-damage-per-size basis.

The Church of Universal Coverage Becomes Self-Aware

I have blogged before about the “Church of Universal Coverage,” my affectionate term for those whose support for universal health insurance coverage is impervious to reason – or would be, were they to subject it to reason.  I read something today that has me wondering whether the Church might be waking up to the fact that it is indeed a religion.

The July/August 2008 issue of the journal Health Affairs contains a letter from Mitch Roob, the Indiana official who oversees Gov. Mitch Daniels’ (R) health care agenda.  Roob writes:

Like other advocates for children’s health, I have an almost religious conviction that the State Children’s Health Insurance Program (SCHIP) is effective public policy … Although I have no empirical evidence to support the assertion that SCHIP is a beneficial and effective way to invest in children’s health, I worked to expand the program … I was not able to base this expansion on empirical evidence because there is none … The lack of actual evidence of the benefits for children is simply damning to the program … Public policymakers need more than just a conviction that SCHIP works and is worthy of public investment.  We need facts.  [Emphasis added.]

Wow.  I mean, wow

I see three possible outcomes.  One, all that cognitive dissonance causes Roob’s head to explode.  Two, the Church hierarchy dispatches its goons to burn this heretic at the stake for noticing that their god has no clothes.  Three, the Left decides “to hell with it,” admits that it has a religion, and files for tax-exempt status.

It’s Not Easy Being an Argentine Farmer

Tax Freedom Day — the day we stop working for the government and start working for ourselves — took place this year on April 23rd according to the Tax Foundation. Some people rightly complain about working for the government almost 4 full months, but if you were an Argentine farmer, you’d still have to wait more than a month and a half for such a splendid day.

A recent survey of La Nación, an Argentine daily, found out that the average farmer in that country needs to work 240 days a year to pay all his/her taxes. In some cases this figure goes up to 300 days a year. Based on these numbers, Tax Freedom Day will be “celebrated” in most Argentine farms on August 27th.

A mate will be in order.