Here’s a letter I sent to Politico:
Jonathan Allen’s November 28 article, “Mandatory budget cuts after supercommittee failure will trigger pain for some,” is misleading. A cut is when spending goes down. Federal spending will go up every year for at least the next ten years, even with the supercommittee’s failure to reach a bipartisan agreement.
According to the Congressional Budget Office, defense spending is projected to increase by 18 percent between 2013 and 2021. Discretionary spending is set to increase by 12 percent over the same period. These increases are lower than previous projections. But they are still increases. And an increase is not a cut. Not even in Washington.
See also the chart below that the Mercatus Center’s Veronique De Rugy put together using CBO data. I can’t put it more plainly: there are no supercommittee-related budget cuts. Stop saying that there are.
Here’s a letter I recently sent to The New York Times:
TO THE EDITOR:
Richard Sennett and Saskia Sassen worry in their August 11 op-ed that government spending cuts may be causing the UK riots. They also hint at what that could imply for the U.S.
A problem with their argument is that government spending in the UK has gone up sharply over the last decade. Government spending there is currently about 45 percent of GDP. In 2000, it was only 34 percent. There were no riots then.
A similar story has played out in America. When President Clinton left office, federal spending was 18 percent of GDP. Now it is 24 percent.
If spending cuts cause riots, then we should have nothing to worry about. The fact that we do means something else must be behind the looting.
Washington, D.C. Aug. 11, 2011
The writer is a fellow at the Competitive Enterprise Institute.
Eleven people were arrested for staging a sit-in today inside the U.S. Capitol. They were protesting budget cuts. They must not have known that spending is set to increase every year for at least the next decade, even under the Boehner plan.
Take a look at this handy discretionary spending chart that Cato’s Chris Edwards put together:
Congress is debating a $2 trillion spending cut right now. Or at least that’s what they’re calling it. Ten years from now, even with the cut in place, spending is projected to be $1.8 trillion higher than it is today. This video explains why in one short minute:
Democrats want the federal budget to be about $3,730,000,000,000. Republicans want it to be about $3,630,000,000,000. As with many other issues, the difference between the two parties is less than three percent. Even so, it nearly led to a federal government shutdown.
The deal that the two parties recently struck to avoid a government shutdown meets somewhere in the between. It is advertised as cutting $38.5 billion of spending. But on closer inspection, it would actually cut $14.7 billion. That would cut total federal spending by 0.39 percent.
I have a hunch that even those small cuts may not actually happen. This blog post I wrote in 2005 explains why.
The rules of the game in Washington are severely stacked in favor of spending increases. Presidents Bush and Obama grew the federal government by about 100 percent in only a decade with little political pain. And it apparently takes the specter of a government shutdown to reduce spending by 0.39 percent.
If anyone is looking for a reason for fundamental institutional reform, that would be a big one.
The House passed a budget enforcement resolution yesterday. It sets 2011’s discretionary spending $7 billion below what President Obama has requested.
Next year’s discretionary spending target is $1.12 trillion for next year. The $7 billion difference represents savings of 0.625 percent. Barely a rounding error. If total spending (including mandatory and defense spending) ends up at $3.5 trillion next year, the savings becomes 0.2 percent.
Of course, 2010 discretionary spending was $1.39 trillion. 2011 spending will very likely end up much closer to that than the targeted $1.12 trillion. The appropriations process is not kind to non-binding resolutions, however well-intentioned. Especially when the resolution “doesn’t detail how Congress should reach that [deficit reduction] goal.”
Congress lacks the will to cut $270 billion of spending. The interests benefitting from that spending will scream bloody murder the second their programs are put on the chopping block. In an election year when incumbents are more fearful than usual, no politician worth his salt wants to cause an uproar.
Congress need not worry too much, though. Even in anti-incumbent years, re-election are almost always above 90 percent. The vast majority of congressional turnover happens through retirement, running for other office, or death.
The pattern is holding this year, so far. The University of Virginia’s Larry Sabato recently pointed out that 5 incumbents have lost their state primary elections this year, while 240 were re-nominated. That’s a 98 percent success rate. There will be a few more casualties, especially in the November general elections.
Most members are safe. They can, and should, rock the boat by cutting unnecessary spending. If anything, the most aggressive cutters might become folk heroes like Chris Christie in New Jersey. They just don’t have the guts.
I will be more than happy if Congress proves me wrong. We’ll find out over the next few months.
Posted in Economics, Elections, Political Animals, Spending
Tagged budget enforcement resolution, chris christie, congress, deficits, election 2010, incumbents, larry sabato, nonbinding resolution, obama, president obama, Public Choice, spending, spending cuts, trillions, university of virginia
Senator Tom Coburn offered several amendments to an appropriations bill yesterday. The most notable of these would have saved $454 million by cutting two dubious pork projects in Alaska. The fury Coburn aroused in his colleagues bordered on the absurd. Senator Patty Murray of Washington made threats to Coburn and anyone who voted with him. Senator Ted Stevens of Alaska actually threatened to resign on the Senate floor.
Keep in mind that, from the current $2.5 trillion federal budget, you need four decimal places before that $454 million even shows up.
The amendment failed by 15-82, a margin of 67 votes. The Senate can’t even bear to cut 0.02% of the federal budget without someone threatening to resign. Is it really that hard?
Grow up, children.
Excellent coverage of the whole fiasco is at The Club for Growth, The Daily Kos, and at National Journal.