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February 26, 2013 5:06PM

Sequestration: Governors Are a Special Interest Too

The president made an appearance at the National Governors Association’s winter meeting to drum up support for his position that the sequestration spending cuts should be mitigated with tax hikes. The president understands that state politicians are dependent on federal handouts (see chart below), which makes them ideal candidates to help him convince the citizenry that spending cuts would usher in the apocalypse.  

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In the battle with congressional Republicans over sequestration, it would be particularly helpful to the president to have Republican governors fan the flames. The post-appearance coverage that I’ve read indicates that some GOP governors took the bait and others did not. For instance, Louisiana Gov. Bobby Jindal dismissed the president’s position as “just trying to scare the American people.” On the other hand, Virginia Gov. Bob McDonnell expressed dissatisfaction with congressional Republicans (and the president’s) inability to come to an agreement to avoid sequestration. 

If an article in Politico is accurate, however, Republican governors are working behind the scenes to get congressional Republicans to acquiesce: 

The new rumblings match what's been going on behind the scenes for months. Governors have publicly signed on to letters bashing Obama and praising House Republicans' efforts, but privately their offices have been urging lawmakers to work harder to avoid potentially devastating cuts — particularly those that could hit local programs. 

Having worked for a Republican governor who made it a mission for his state to grab as many federal dollars as possible, I have zero reason to doubt that this is the case. The reason is simple: every federal dollar that a state politician can spend is a dollar that he or she doesn’t have to ask his or her voters to part with. Thus, state politicians love the “free” money from the feds and expend great effort (and additional taxpayer money) trying to obtain it. 

Of course, it isn’t really free.

February 26, 2013 4:37PM

The Sequestration Immigration Scare

Immigration and Customs Enforcement (ICE) has released several hundred unauthorized immigrants from detention in Texas, Florida, Arizona, and Louisiana in preparation for budget cuts as part of the sequestration. The administration has noted that cuts would effectively reduce Border Patrol by about 5,000 agents—down to about 2007 levels of staffing if all of the cuts occur on the Southwest border. 

This reduction in Border Patrol will not unleash a tidal wave of unauthorized immigrants like many claim. Since 1989 the Border Patrol’s appropriations have increased by 750 percent and there are six times more staff today than in 1989. 

Apprehensions of unauthorized immigrants on the border are also near 40 year lows because fewer unauthorized immigrants are trying to enter illegally due to the poor economy. Decreasing the size of the Border Patrol will not do much to increase unauthorized immigration because many would-be immigrants are repelled by high unemployment rates.  

Unauthorized immigration has slowed dramatically because of a lack of economic opportunity in the United States, not because border patrol is larger or more effective. Cuts to Border Patrol, even those that would return its size to the 2007 levels, will not much affect unauthorized immigration.

American unemployment rates and demand for immigrant workers drive unauthorized immigration.  Look at this graph relating border apprehensions and the national unemployment rate:

Apprehensions and Unemployment Rate

The higher the rate of unemployment, the fewer unauthorized immigrants try to enter, and the fewer apprehensions are made.   

Perhaps if you had looked at this graph, you might have thought that the size of the Border Patrol could deter unauthorized immigration:

Apprehensions and Border Patrol Staff on Southwest Border

But if Border Patrol deterred unauthorized immigration, it would probably also deter other illegal activity—like cross border drug seizures. Consider this graph:

Border Patrol Staff and Marijuana Seizures

 

Drug seizures have increased along with the size of the Border Patrol. Americans still demand marijuana so increased security results in more marijuana seizures (and more marijuana entering the black market). In contrast, unauthorized immigration is down because there is less American economic demand for their labor. Decreasing the size of the Border Patrol down to 2007 levels will not result in a flood of unauthorized immigration because not as many people want to come here as they did during the housing boom.

February 26, 2013 3:28PM

Whip Illegitimacy Now (WIN)!

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You just know a David Brooks column featuring the refrain, "my dream Obama would..." is going to be exasperating. And it is: especially when he suggests that his "dream Obama" could and should:

... talk obsessively about family structure and social repair. Every week we get another statistic showing how social and income inequality is dividing the nation. .... while childhood obesity is falling among kids whose parents graduated from college, it is still rising among kids whose parents have a high school degree or less.

Because of his upbringing, President Obama is uniquely qualified to talk about family structures. Traditional values are an investment in the young, and he could do what he can to restitch the social fabric.

It'll be tough to "restitch the social fabric" when you need at least one hand free to bend the arc of history, but no doubt President Obama believes he's up to the task. Still, why does David Brooks think it would help to have the president "talk obsessively about family structure and social repair"?

Barack Obama has been talking obsessively about capital-'h' Hope for nearly a decade, and during his administration, as with his predecessor's, many more Americans think the country's on the "wrong track" than think it's moving in the "right direction." (.pdf).

The evidence that the presidential "bully pulpit" reliably sways the public's policy preferences is weak enough, as Ezra Klein documents here. What evidence is there that presidential jawboning about family structures changes anyone's behavior? Birth rates for unmarried women went down in the era of Monica Lewinsky and Gennifer Flowers, resuming their upward trend under family values president George W. Bush. Do people really make their choices about marriage and family under the influence of presidential rhetoric or with an eye toward the example he sets?

The campaign Brooks envisions would be about as effective as Gerald Ford's little Whip Inflation Now (WIN) buttons. Maybe it's time for a little less magical thinking about our presidents. 

February 26, 2013 2:39PM

It’s Plane Pork

The Washington Post’s David Fahrenthold has identified another budget zombie. This time it’s an obscure grant program administered by the Federal Aviation Administration that dumps money on tiny airports with scant activity. 

From the article: 

Along a country road in southern Oklahoma, there is a place that doesn’t make sense. It is an airport without passengers. 

Or, for that matter, planes. 

This is Lake Murray State Park Airport, one of the least busy of the nation’s 3,300-plus public airfields. In an entire week here, there might be one landing and one takeoff — often so pilots can use the bathroom. Or none at all. Visiting pilots are warned to watch out for deer on the runway. 

So why is it still open? Mostly, because the U.S. government insists on sending it money. 

Every year, Oklahoma is allotted $150,000 in federal funding because of this place, the result of a grant program established 13 years ago, in Congress’s golden age of pork. The same amount goes to hundreds of other tiny airfields across the country — including more than 80 like this one, with no paying customers and no planes based at the field. 

And why does the federal government insist on sending Lake Murray—and other seldom used airports—money? 

In the years since 2000, pork has gone far out of fashion in American politics. But this program has remained strikingly difficult for anyone — from Washington to Oklahoma City — to kill. 

President George W. Bush, more than once, proposed budget cuts that would have ended the program. In 2011, Coburn suggested making states share more of the costs. Instead, last February, Congress kept the program in place when it reauthorized the FAA. 

Budget watchdog groups say these airport entitlements are in a league with the Essential Air Service program — which subsidizes commercial flights to small places — and Amtrak. Their services are spread wide enough to give them a strong base in Congress. 

One constantly hears the cries that the federal government (i.e., taxpayers) isn’t “investing” enough money on “our crumbling infrastructure.” Yet this is precisely what happens when you put politicians in charge of allocating resources: decisions are largely made on the basis of political and parochial concerns rather than sound economic and financial considerations. 

(See this Cato essay for more on federal involvement in airports and air traffic control.)  

Addendum: Fahrenthold notes that former House Transportation and Infrastructure Committee chairman Bud Shuster (R-PA) engineered the “carpet-bombing” of money from this program to congressional districts far and wide. His son, Bill Shuster, now heads the same committee and the apple didn’t fall far from the tree. So don’t expect this zombie to finally be put down anytime soon. 

February 26, 2013 1:57PM

An Unconstitutional Tax Bill in Virginia?

My long-ago colleague Norman Leahy, once a young research assistant at the Cato Institute, has an op-ed in the Washington Post today. I wonder where he got the idea that an act of the legislature is invalid just because it violates the state constitution.

Those praising the Virginia General Assembly’s transportation compromise may not realize that the bill runs afoul of the plain language in the state’s constitution.

Virginia’s constitution is clear that the General Assembly can impose only uniform taxes across the state for similar activities. But the bill that emerged from the House-Senate conference committee last weekend upsets the historic balance between localities and state government; it contains new provisions about taxation, some of which would effectively set up a two-tier system for residents in certain parts of the state. It’s difficult to see how some of these provisions could survive legal challenge....

As a constitutional matter, these local tax provisions could probably be struck down without affecting the rest of the legislation.

But few should know better than Gov. Bob McDonnell (R) that state legislators don’t have the power to impose a discriminatory local tax. He was the state’s attorney general when his office defended before the state Supreme Court the General Assembly’s previous attempt at a transportation tax package. The court rejected the argument.

 

February 26, 2013 1:09PM

Sequestration Will Not Make the United States Less Safe

Will sequestration undermine U.S. national security? Hardly. Today, the Cato Institute released a new infographic putting these minor cuts in perspective.

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Military spending will remain at roughly 2006 levels—$603 billion, higher than peak U.S. spending during the Cold War. Meanwhile, we live in a safer world. The Soviet Union has been dead for more than two decades; no other nation, or combination of nations, has emerged since that can pose a comparable threat. We should have a defense budget that reflects this reality.

To be clear, sequestration was no one’s first choice. But the alternative—ever-increasing military spending detached from a legitimate debate over strategy—is worse. We should have had such a debate, one over the roles and missions of the U.S. military, long before this day of reckoning. And politicians could have pursued serious proposals to prudently reduce military spending. Instead, they chose the easy way out, avoiding difficult decisions that would have allowed for smarter cuts.

Until now, there have been few constraints on Washington’s ability to spend what it pleases on the military. As my colleagues Benjamin Friedman and Justin Logan put it, Americans “buy defense like rich people shop, ignoring the balances of costs and benefits.”

Policymakers can’t postpone the tradeoffs forever, especially when the public has grown increasingly weary of foreign entanglements. If forced to choose between higher taxes, less military spending, or lower domestic spending, in order to balance the budget, the military fares least well, with solid pluralities favoring cuts in military spending over cuts in other programs.

Which is why it is so important to get the foreign policy debate right. If we are going to give our military less, we need to think about asking it to do less.

A number of experts have done that, rethinking the military’s purpose, and documenting the savings that would flow from a more modest foreign policy. The sequester is a first step, albeit an imperfect one, that could finally compel policymakers to do the same.

Download and share this infographic on your blog, Twitter, or Facebook.

My thanks go out to Harrison Moar and Zach Graves for conceiving this, pulling the data together, and making it look really cool.

Additional Cato resources on sequestration and military spending:

Infographic sources (in order of figures listed, left to right):

February 26, 2013 11:40AM

Earth to New York Times: Please Show Us these “Deep Spending Cuts” You Keep Writing About

Sigh. I feel like a modern-day Sisyphus. Except I’m not pushing a rock up a hill, only to then watch it roll back down.

divCompared to educating journalists about fiscal policy, this is an easy task

I have a far more frustrating job. I have to read the same nonsense day after day about “deep spending cuts” even though I keep explaining to journalists that a sequester merely means that spending climbs by $2.4 trillion over the next 10 years rather than $2.5 trillion.

The latest example comes from the New York Times, which just reportedabout “deep automatic spending cuts that will strike hard” without bothering to provide a single concrete number about spending levels in any fiscal year.

Yes, you read correctly. A story about budget cuts did not have any numbers for spending in FY2013, FY2014, or any other fiscal year.

So, for the umpteenth time, here are the actual numbers from the Congressional Budget Office showing what will happen to spending over the next 10 years if we have a sequester.

Sequester 2013



I don’t mean to pick on the New York Times. Yes, the self-styled paper of record has been guilty in the past of turning budget increases into spending cuts, but the Washington Post is guilty of the same sin, having actually written in 2011that reducing a $3.8 trillion budget by $6 billion would “slash spending.”

And the NYT story actually has some decent reporting on how Republicans so far have (fingers crossed) avoided the tax-increase trap that Obama thought the sequester would create.

But one would still like to think that Journalism 101 teaches reporters to include a few hard facts when writing stories. Particularly if they’re going to use dramatic adjectives to describe what supposedly will happen.

Anyhow, this is just part of a larger problem. As I explained in these John Stossel and Judge Napolitano interviews, the politicians and interest groups have given us a budget process that assumes ever-increasing spending levels, which then allows them to make hysterical claims about “savage” and “draconian” cuts whenever spending doesn’t rise as fast as some hypothetical baseline.

This is why almost nobody understands that it’s actually relatively simple to balance the budget with a modest bit of spending restraint. My goal is reducing the burden of government spending, not fiscal balance, but it’s worth noting that we’d have a balanced budget in just 10 years if spending grew by “only” 3.4 percent annually.