Month: January 2011

Are The GOP’s Cuts Serious?

FrumForum asks around. Here's Steve Bell:

Bottom line–if you want to cut $100 billion from spending in FY11, you will have to start with immediate furloughs of hundreds of thousands of government workers, stop paying the government’s share of the TSP savings programs, close down most government funded operations, and stop most of the research grants the U.S. funds.

It can be done.  But if it is done, President Obama and the Democratic Party will have been given one of the great electoral gifts of all time.

Just imagine the head of a local hospital, funded in part by federal monies, who headed up the finance team for one of the new House Republicans, calling that Member and saying, “Holy Cow, do you know that you have just closed down part of the cancer wing here.”

What Would The GOP Cut? Ctd

Ezra Klein spies a "battle between the Tea Party wing of the Republican Party, which wants to cut the budget by $100 billion this year, and the more establishment-oriented members, who've set their sights substantially lower". But he's right to praise the candor and specificity of the cuts, even though their short term impact could be, well, interesting:

[R]eading [the Tea Party wing's] legislation, you can see why more experienced members of their party might balk: $30 billion in savings comes from immediately selling off Fannie Mae and Freddie Mac, which would potentially throw a weak housing market into total chaos. Another $16 billion comes from repealing the help the federal government is giving states to handle Medicaid costs, which would potentially send a couple of states that are already teetering on the edge of bankruptcy right over the cliff. Amtrak would lose pretty much its entire federal subsidy, as would the Corporation for Public Broadcasting and the National Endowment for the Arts. Funding for high-speed rail is eliminated, and so too is more than $40 billion in stimulus funds, most of which are obligated to projects that have already begun. 

For all that, this is a healthy document: It shows what very deep cuts in spending would actually look like. Democrats, I imagine, will be quite interested in debating it. Whether or not Republican leadership will be as enthusiastic remains to be seen.

Malkin Award Nominee, Ctd

A reader takes issue with the nomination:

Does Lew Rockwell really qualify as right-wing? The only thing he hates more than Democrats are Republicans.  Hell, even the quote you pull rails equally against warfare as it does bank bailouts.

His take on the raising the debt ceiling is indeed shrill, but isn't it, well, self-evidently true?

Raising the ceiling is, by definition, continuing business as usual because it is, without exception, what we have done EVERY TIME we have been confronted by the immediate problem of having more spending than we have revenue and having legal limits in place in an attempt to get Congress to take responsibility for its spending rather than trying to just borrow against our long-term solvency for the sake of avoiding difficult short-term choices.  The conventional wisdom in the Beltway is that voting against raising the debt ceiling is wildly irresponsible – which is ironic considering that voting to raise the debt ceiling is, again, by definition an explicit announcement of Congress' abdication of responsibility. 

And, remember, the debt ceiling isn't some arbitrary concept, nor is it there entirely to try to get Congress to spend responsibly; it is there to limit the eventual damage in case Congress absolutely refuses to pay down debt.  Much in the same way toxic assets brought down the banking system because they jumped over the meager fences designed to limit the damage should they explode, so too does constantly raising the debt limit essentially constantly raise the risk to all of us that our debt entails (and it DOES entail risk). 

People who vote against raising the debt limit aren't some kind of wild-eyed fiscal purists demanding a return to a pre-New Deal America.  They're just asking that Congress adhere to its own self-imposed limits – limits there to protect us from their institutional short-sightedness (and limits, by the way, that it managed to adhere to LAST YEAR at the level they're at now without society imploding and governance grinding to a halt and all of us having to eat our pets and grandparents for sustenance in some kind of crazy Mad Max world).

Lew is right – refusing to, yet again, raise the debt ceiling is just voting to forever expand every aspect of government (which I wouldn't call necessarily a criminal enterprise, but that's Lew Rockwell for ya) and a steadfast refusal to make choices.  It is a blank check to everything, from social services to defense (read: warfare state), and an abject refusal to try to keep spending at a zero sum gain. 

I find it hard to take seriously people who hold the two competing ideas in their head that Republicans are hypocrites for not being serious about cutting spending but insane for trying to force the issue.

Because, you know, forcing the issue could devastate America's fiscal standing and create economic global chaos and uncertainty. And if Lew Rockwell isn't on the far right, then is my reader saying he's on the far left? Please. My record is strong and consistent on debt – and I find this kind of grandstanding, well, as reckless as the spending that got us into this hole.

What Would The GOP Cut?

This is a first step – at least the GOP is getting specific about how they would reduce the deficit, and many of the items seem ripe for pruning or removal. But it's also insane in many ways. In order to get a little more than half of Bowles-Simpson's savings, while leaving the real growth areas, entitlements and defense, alone, the GOP has to lay waste to discretionary spending in unprecedented fashion, while not altering our long-term prognosis more than a jot. They have restricted themselves, as Bruce Bartlett notes, to cutting from only 16 percent of total spending in 2009. If you have any clue about this country's finances, this is a joke. But even here, depressingly, the Democrats aren't biting: 

Democrats have been needling Republicans for months over their inability to name specific programs to cut. Now, they argue, the Republicans have enumerated cuts that will absolutely slash away jobs — federal workers, construction workers, and so on. 

Christina Romer's plan to reduce the deficit is much more reality-based, because it goes to where the money is and also doesn't avoid the core issue of revenues. This, by the way, is exactly the Dish criterion for judging Obama's speech next Tuesday:

I am not talking about two paragraphs lamenting the problem and vowing to fix it. I am looking for pages and pages of concrete proposals that the administration is ready to fight for. The recommendations of the bipartisan National Commission on Fiscal Responsibility and Reform that the president created are a very good place to start.

The need for such a bold plan is urgent — both politically and economically. Voters made it clear last November that they were fed up with red ink. President Obama should embrace the reality that his re-election may depend on facing up to the budget problem.

As the recovery moves forward, the excuses for not tackling long-term debt are collapsing. Is Obama a president unafraid to tackle the truly hard issues rather than leave them to the next generation? We'll see Tuesday night. This is a moment of truth for the Dish's support of this president.