November 3, 2010 11:55AM

What Spending Should the GOP Cut?

Congratulations to the wave of Republicans who successfully ran on promises to tackle rising government debt and cut the hugely bloated federal budget. On the campaign trail, most candidates were not very specific about how they would cut the budget, but when they come to Washington they will be looking for good reform targets.

Newcomers to Congress can find a wealth of budget‐​cutting ideas in recent plans by various D.C. think tanks:

Cato’s website, www​.down​siz​ing​gov​ern​ment​.org, also provides a treasure trove of spending cuts, and I will be publishing a detailed budget‐​reform plan in coming days. 

Some of the above budget plans include tax increases, but voters gave a resounding message yesterday that they want Congress to focus on cutting spending, not raising taxes.

Out of the starting gate next year, fiscal reformers in Congress should push for an across‐​the‐​board cut to discretionary spending for the rest of the current fiscal year. One approach would be for House leaders to propose a continuing resolution that extends spending at last year’s levels, less some substantial percentage cut applied to every program.

For the upcoming fiscal year of 2012, reformers need to carefully target some major program cuts and eliminations. The president and the Democrats in the Senate will likely resist proposed cuts, but the point is to further the national debate that has begun about the proper size and scope of the federal government.

Some initial targets for GOP reformers, with rough annual savings, could include: community development subsidies ($15 billion), public housing subsidies ($9 billion), urban transit subsidies ($9 billion), and foreign development aid ($18 billion). On the entitlement side, initial cuts could include raising the retirement age for Social Security and introducing progressive price indexing to reduce the growth rate of future benefits.

We will not get federal spending under control unless we begin a national discussion about specific cuts. And we won’t get that discussion unless enough members of Congress start pushing for specific cuts. Ronald Reagan was able to make substantial cuts to state grants in the early 1980s because policymakers had discussed such reforms throughout the 1970s. Republicans in the mid‐​1990s were able to reform welfare because of the extended debate on the issue that preceded it.

The electorate wants spending cuts, and they will support the policymakers who take the lead on cuts if they are pursued in a forthright and serious‐​minded manner.

October 1, 2010 1:48PM

A Thousand Cuts

That’s the title of a recent paper from the liberal Center for American Progress, which attempts to demonstrate “what reducing the federal budget deficit through large spending cuts could really look like.”

The authors, Michael Ettlinger and Michael Linden, issue a challenge that I whole-heartedly embrace:

By showing sets of specific spending cuts we hope to deepen the discussion of where deficit reduction is going to come from. The challenge we issue is this: If you think all or most of the deficit problem should be dealt with on the spending side, are you then willing to own the cuts we outline? If not, then it’s time to go public with what your cuts are, with at least the same level of precision we do—no gimmicks, “sunsets,” or other games. No infomercial claims that you’ve got a magic elixir that gets the same results for half the money.

My colleague Chris Edwards anticipated this challenge with his 2005 book Downsizing the Federal Government. The book led to the creation of Cato’s Downsizing Government website, which is going department-by-department to outline specific --- and substantial --- spending cut recommendations.

The CAP authors lay out specific spending cuts of $255 billion in fiscal year 2015, which is the projected figure necessary to achieve a balanced “primary budget” in that year. (The primary budget is total spending minus outlays for servicing the federal debt). The White House’s most recent projections show “primary” spending of $3.8 trillion in FY2015, so we’re talking about an overall reduction of about 7 percent.

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September 20, 2010 10:20AM

President Obama’s Speech Czar

President Obama’s Secretary of Health and Human Services Kathleen Sebelius is still threatening to bankrupt insurance companies who tell their customers that ObamaCare’s mandates will increase premiums by more than 2 percent, even though her department’s projections show that, starting this week, just one of the law’s new mandates will increase some premiums by nearly 7 percent.

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In a CBS News story last week, Sebelius tried to defend those indefensible threats:

But don’t the insurance companies have a right to make their own analyses and claims to their customers?

“Absolutely, they have a right to communicate with their customers,” replied HHS Secretary Kathleen Sebelius. “We just want to make sure that communication is as accurate as possible.”

The government can and should police fraud — but that’s not what Sebelius is doing. She is suppressing legitimate differences of opinion in the pursuit of political gain.

What if the government had said, “Absolutely, CBS News has a right to communicate with its customers — we just want to make sure that communication is as accurate as possible”? Should the government be able to put CBS News out of business if it decides those communications are not as accurate as possible? How about the National Rifle Association? Should the next Republican administration be able to put the Center for American Progress, the SEIU, or The New York Times out of business if it decides their communications are not as accurate as possible?

You don’t have to oppose ObamaCare to see the danger here.

August 18, 2010 12:20PM

Korb and Thompson on Military Spending

Today’s Los Angeles Times features an op‐​ed by Lawrence Korb of the Center for American Progress, and Loren Thompson of the Lexington Institute, that is worthy of attention. The theme, cutting military spending, isn’t particularly original. It has grown into a regular topic of conversation across the media spectrum, with the New York Times featuring an editorial this past Sunday making the case for real cuts in Pentagon spending, not the half‐​hearted cost‐​shifting that Defense Secretary Gates is busy selling these days. Ben Friedman and I wrote about cutting military spending in the LA Times a few months ago, and I collaborated with Larry Korb on this same subject at The National Interest Online. Nothing particularly newsworthy there.

Loren Thompson’s contribution is significant, however. Building on his entry at the National Journal’s National Security Experts blog earlier this month,he signals a willingness on the part of an established Washington insider to reconsider some fundamental propositions that have guided his work — and inside‐​the‐​Beltway thinking — for years.

One of Lexington’s bread‐​and‐​butter issues has been finding ways to grow the military budget. I don’t expect that to change entirely. Perhaps now, however, the focus will be on steering a finite and shrinking military budget to particularly worthwhile projects, and jettisoning the force structure that serves decidedly unnecessary or unwise missions (e.g. invading and occupying medium‐​sized countries in Southwest and Central Asia).

A related goal is to give U.S. taxpayers a break, and get others to spend more for their own defense. In this vein, I don’t agree with all of their predictions. I doubt that the Littoral Combat Ship will have much of a foreign market with a price tag exceeding $600 million a piece (when one includes the mission modules that each LCS will carry). I likewise am skeptical that the Joint Strike Fighter will attract a lot of buyers if the price continues on its current path — approaching $150 million a piece. Some countries that had previously committed to the JSF program, including Denmark and the Netherlands, are now getting cold feet.

That said, the bottom line in the Korb‐​Thompson collaboration is spot on, and worth repeating:

The big question for policymakers is not whether defense spending will be cut — that is inevitable — but how global security will be maintained as the U.S. role diminishes.…

It appears the only way this can be accomplished without encouraging aggression is to expect more of allies and friends. In other words, countries such as Germany, Japan and India must help fill the strategic vacuum created by America’s retreat.


The White House has already embarked on a series of initiatives to engage allies in more robust security roles while loosening the export restrictions that impeded arming them. These steps may have trade benefits for America, but their real significance is that America’s eroding economic might makes unilateralism too costly to be feasible. Washington needs to help overseas friends play a bigger security role so it can concentrate on rebuilding its economy.

Congrats and kudos to them both for setting forth such a clear and convincing argument for a dramatic change of course.

August 11, 2010 11:36AM

‘Border Enforcement’ Bill Driven by Election‐​Year Politics

A $600‐​million bill to enhance border enforcement has hit a temporary snag in the Senate, but it is almost inevitable, with an election only a few months away, that Congress and the president will spend yet more money trying to enforce our unworkable immigration laws.

“Getting control of the border” is the buzz phrase of the day for politicians in both parties, from Sen. John McCain, R‑Ariz., to Sen. Chuck Schumer, D‑N.Y. Never mind that apprehensions are down sharply along our Southwest border with Mexico, mostly I suspect because of the lack of robust job creation in the unstimulated Obama economy.

Meanwhile, since the early 1990s, spending on border enforcement has increased more than 700 percent, and the number of agents along the border has increased five‐​fold, from 3,500 to more than 17.000. (See pages 3 – 4 of a January 2010 report from the Center for American Progress and the Immigration Policy Center.) Yet the population of illegal immigrants in America tripled during that period. If this were a federal education program, conservatives would rightly accuse the big spenders of merely throwing more money at a problem without result.

To pay for this politically driven expenditure, Congress plans to nearly double fees charged for H1‑B and L visas used by foreign high‐​tech firms to staff their operations in the United States. The increased visa tax will fall especially hard on companies such as the Indian high‐​tech leaders Wipro, Infosys, and Tata.

This all has the ring of election‐​year populism. Congress pretends to move us closer to solving the problem of illegal immigrants entering from Latin America by raising barriers to skilled professionals coming to the United States from India and elsewhere to help us maintain our edge in competitive global technology markets.

July 6, 2010 3:37PM

At Least They Spelled Our Name Right. Oops.

The folks at the Center for American Progress, in their daily anti‐​right email, wrongly call the Cato Institute conservative and wrongly spell our name CATO.

But what I find more amusing is that the email, prompted by Michael Steele’s confused remarks about Afghanistan and the reaction against him, is titled “The Right Wing’s Addiction to War.” They have a point. But who’s running the Iraq and Afghanistan wars now? Isn’t it the man who once said

I opposed this war in 2002. I will bring this war to an end in 2009. It is time to bring our troops home.


I was opposed to this war in 2002….I have been against it in 2002, 2003, 2004, 5, 6, 7, 8 and I will bring this war to an end in 2009. So don’t be confused.

The right wing may be addicted to war, but it seems to be a left‐​wing president who’s on the sauce now. I look forward to seeing the Center for American Progress start asking President Obama when it will be 2009.

April 20, 2010 12:15PM

Whitewashing Progressivism

Damon Root points out that the Center for American Progress has a particularly one-sided view of "The Progressive Tradition in American Politics." [.pdf]  To add to what Root is saying, my view is that American politics is essentially tribal warfare and an important factor in tribal warfare is the cohesion of the tribes.  One way to accomplish this is by romanticizing history to create a powerful identity with which the tribesmen want to associate themselves.  A political movement needs heroes, villains, narrative.  But CAP's account of the Progressive movement's history is remarkably one-sided.

When I ticked over to CAP's "Progressive Tradition" document [.pdf], I looked to see whether they included Wilson's 1916 reasoning that it was "in order to keep the white race or part of it strong to meet the yellow race -- Japan, for instance, in alliance with Russia, dominating China -- [that made it] wise to do nothing" with respect to the war in Europe.  They did not.  In fact, the authors select the passive voice for describing Wilson's slapdash diplomacy that sucked America into the war: "In his second term, he became preoccupied with international affairs due to the U.S. entry into World War I."  This phrasing makes it sound like "the U.S. entry" was an act of God, not an act of Wilson.  Moreover, if someone without any prior knowledge read the document they would be painfully unaware that the reason Wilson "became preoccupied with international affairs" was because he got us into a war.

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George Creel[/caption]

What about the Committee on Public Information, a government propaganda machine that made George Bush look like Glenn Greenwald?  The CPI worked in concert with (no kidding) the "Boy Spies of America" to root out insufficiently pro-war thinking.  CPI's perhaps most metaphysical pronouncement was that U.S. entrance to the Great War was, in fact, "a Crusade not merely to re-win the tomb of Christ, but to bring back to earth the rule of right, the peace, goodwill to men and gentleness he taught."  What about Roosevelt's puffed-up belligerence, again foreshadowing Bush, in stating that "He who is not with us, absolutely and without reserve of any kind, is against us, and should be treated as an alien enemy"?  What about the Palmer Raids, named for ur-Progressive and Attorney General A. Mitchell Palmer, wherein the U.S. Government ransacked union halls and homes, snatched up prisoners and held them without access to counsel or courts, and engaged in mass, summary, and unilateral deportations?  Not a word.

As to the Red Scare more generally, the best the authors can do is to shrug that as Wilson's "general intolerance of dissent during World I became exacerbated by fear of the 1917 Russian Revolution, he played a central role in promoting the Red Scare of 1917-20.  The Red Scare made domestic activism a target of both police suppression and nativist sentiment, producing an atmosphere hardly conducive to the cause of progressive reform."  Is that supposed to be a denunciation?

In contrast to all this obfuscation and equivocation, poor Warren Harding comes in for a soaking for having produced "a sharp increase in racial violence and the rise of the Ku Klux Klan, new restrictions on immigration, rises in protective tariffs, increases in economic concentration, and tax cuts for the rich."

Imagine if a conservative group came out with a history of American conservative thought that expressly linked modern American conservatism to the political thought of, say, John C. Calhoun, with only mealy-mouthed "to be sure" language like that used by CAP with respect to Progressivism.  Lefties would be outraged, and rightly so.  Will CAP clear the air on the Progressive movement's history of racism, imperialism, executive supremacism and contempt for civil liberties?  I bet I know the answer.