Tuesday, February 02, 2010

Once again, we're about to see why...

We can't cut the federal budget.  Of course, farmers are incensed to be included in possible spending reductions, especially to the largest, richest producers.
Sen. Tom Harkin, D-Ia., who got CSP enacted in 2002, said Obama's proposed cuts in "agricultural conservation will be damaging for rural America."
Sen. Charles Grassley, R-Ia., who has championed cuts in payments to large farms, said Obama's proposals didn't go far enough because they wouldn't cap subsidies that are linked to fluctuations in crop prices.
But Senate Agriculture Committee Chairwoman Blanche Lincoln, D-Ark., has been a staunch defender of subsidies, and she said the president's plan "places a disproportionate burden on the backs of farmers and rural communities." [More]

One key argument is that farmers only take a tiny, tiny sliver of the federal budget, so it won't help much. Laying aside that tiny sliver is still billions of dollars, and that it only goes to a proportionally even tinier group of citizens, that "too small to cut" principle could be applied to any program under the knife. Having already put security and entitlement programs off the table, that leaves...almost nothing to cut.
So if even Democrats won’t raise taxes and even Republicans won’t cut Medicare, what’s left? Perhaps defense. The problem here is that while targeting defense waste always has some support, there are few politicians willing to question the real driver of Pentagon cost—the American military’s global mission. The presence of a huge number of American military assets in Japan isn’t waste. But it’s hardly vital to the security of the American people, either. In this regard, it’s typical of our military expenditures, which are neither about waste nor about “defending our freedoms,” but about projecting power. In particular, we choose to be key players in East Asian security rather than leaving it to the Chinese and Japanese and Koreans to sort out for themselves.
These are the real options we have to close the deficit—taxes that are higher than where they were in the 1990s, cuts in Medicare, or a redefinition of the mission of the American military. For now, there’s no political support for any of them. Which is why even though you’ll hear a lot of complaints about Obama’s proposed deficit being too high, Congress is much more likely to return a document with deficits that are even higher than one that trims them. [More]
Nonetheless, we can pretend we're going to cut the budget and that will convince many people.

Well, sort of. I give Ryan credit for being more forthcoming than most supposed deficit hawks, but the truth is that for the most part he doesn't explain how he's going to save all that money. It's true that he's got a plan for Social Security private accounts, a plan for Medicare vouchers, and a plan for tax credits to replace the current tax deductibility of health insurance. It's good conservative boilerplate.
But it turns out that's all it is. Those things themselves don't really save any money. The real action comes from a collection of arbitrary spending limits, but these limits don't offer any clues about how we're going to meet them. There's a freeze on nonsecurity discretionary spending from 2010-2019 — but saying you're going to freeze spending is easy. The hard part is figuring out what to cut. There's also a limit to the growth of Medicare payments — but saying you're going to limit growth is easy. The hard part is figuring out how to limit growth and deciding what you're going to cut to meet your caps. Medicaid is treated the same way: Ryan's plan simply sets a limit on growth rates without saying how those limits will be met.
In fairness, there are a few specifics. The eligibility age for Medicare would rise gradually to about age 70. Social Security payments would be reduced. All the money in the stimulus bill that hasn't been spent yet would be eliminated.
But those are nits. For the vast bulk of the savings, Ryan simply declares that they'll happen. His bill would cap growth rates, and that's that. Whatever happens, happens — and he carefully avoids actually saying what would happen. That's not serious, and it doesn't deserve praise. [More]

In all, the rhetoric surrounding the budget deficit reminds me of farmers trying to make their cashflow work out right by leaving expenses unchanged and assuming better marketing. Believing you can change things you really can't seems much more attractive than actually changing the things you can.
I don't think anything is too transparently phony for this crowd. There's a famous old Onion headline [More] that goes like this: "Report: 98 Percent Of U.S. Commuters Favor Public Transportation For Others." This is pretty much the sentiment that Pawlenty — and the rest of the Republican Party — are pandering to in the tea party movement: 98 percent of them favor spending cuts for others. Just don't cut their Medicare or their Social Security or take away their mortgage interest tax deduction or — in Minnesota — do anything to rein in farm subsidies. Unfortunately, Pawlenty can't think of anything sizeable to cut that would affect only "others" for a large enough definition of others. So he's stuck. Just like his entire party is stuck, never willing to put its money where its mouth is because they know perfectly well that would mean having to make some hard decisions. [
What truly mystifies me is the strategy of Republicans to prevent any progress on any front in order to regain power by simple obstructionism. If they are successful, won't they simply inherit a nation hurtling faster toward a cliff and have thrown away any tools (like tax increases and major spending reductions) that might bend the budget curves?

This is why I don't take fiscal hawks seriously until they add some real math to their narrative.


Anonymous said...

Amen. No politician can tell the truth to the American people. It is time to "Face the Music". You can't live beyond your means forever. The current situation is nothing more than fiscal "child abuse". Do we hate our children and grand children. Term limits are the only answer, because a politician can't get re-elected by telling the truth, and if your motivation was to really help the country, you wouldn't have to worry about the political costs. While both parties are guilty as sin, the Republicans are particulary disengenuous with trying to harness anger for political gain.

Bill Harshaw said...

Ezra Klein passes on a nice graph of federal spending since 1962 here:http://economix.blogs.nytimes.com/2010/02/01/government-priorities/

Oddly enough, agriculture is one of the slices which is big enough to be labeled.

Anonymous said...

Not to defend politicians but they don't tell the truth because as a people, the citizens don't want to hear the truth. To each and every citizen, THEIR government benefit is vital and justified while everyone else's is waste and can be cut. We have the government and fiscal issues we have because that is what we have asked for and demanded. I don't buy the deficit hawk's self righteousness since they are lying to themselves and everyone else.

Anonymous said...

Did you ever consider the Republicans have ideas that the Democrats wont listen to. Tort reform for example. Your bias is disapointing.

Anonymous said...

Ahh yes tort reform. Another common diversion tactic to avoid dealing with the real economic issues. Lets blame the lawyers. Unless of course it is ones own family member who is sick, injured or dead, then "sue em"! Another deception another day.