Mr. Cameron, Would You Like A Job?

When the UK’s Prime Minister has had his fill of being pilloried for the budget cuts announced last week, we should offer him a job. This country needs someone with the courage to do more than shift priorities to give the appearance of cutting spending.

Our $1.3 trillion deficit, at only 8.9% of GDP, is a meager effort. Ireland boasts a deficit that is a stunning 32% of GDP. Americans are competitive, though, and if we are patient and focus on spending, we still have a chance to best the Emerald Isle. Our public debt could hit 69% of GDP by 2020 [1], so there is still hope for victory.

Federal agencies less self-interested than our Legislative and Executive Branches have warned about out of control spending for decades. We were cautioned in 1977, when the deficit was confined to two digits:

Under the less optimistic assumption about nonfederal demand, the federal deficit would still be sizeable by 1982 — approximately $72 billion. [2]

We were warned in 1984, when the billions required three digits:

Under current policies, the Congressional Budget Office projects very large and growing deficits, rising from nearly $200 billion in 1985 to over $300 billion in 1989. [3]

We passed the 1990 Budget Enforcement Act after Gramm-Rudman-Hollings failed, but the BEA did not work, either:

Nonetheless, the deficit did not come down to the levels promised in 1990. When the BEA was enacted, policymakers believed that the deficit would be lowered substantially, but the BEA included no requirement for additional deficit reduction if this outlook worsened. [4]

We now have a deficit that could balloon to $6.2 trillion over the next ten years. [5] Fortunately, with the deficit growing so rapidly, spending bills like the $50 billion infrastructure bank proposed by President Obama no longer have a cost:

This plan will be fully paid for.  It will not add to our deficit over time.  And we are going to work with Congress to see to that. [6]

Anticipating a 2010 election recovery, Republican leaders broached a potential $100 billion in budget cuts. Their language is bold, but the details are hazy. Stating that “spending cuts can happen” [7] is much easier than making those cuts a reality. The Pledge to America calls for a federal hiring freeze, which calls the GOP’s dedication into question. Why stop there?

Nearly thirty years ago, we were warned about the cost of civil service benefits:

Civil service retirement benefits are much greater than those typically available in the private sector. From this point of view, the costs to government of the current CSR system are excessive. [8]

Decades later, as recession forced the private sector to cut salaries and jobs, Washington followed the lead of the banks and passed out raises, including a 3.9% increase for federal pay systems in 2009, and a 2.0% bump in 2010.

Government takes care of its own, so state and local governments unable to pay their employees were given federal money to guarantee incomes. We paid $26 billion to save 300,000 state and local public sector jobs, which mollified labor unions that backed the show of federal solicitude, just in time for the midterm elections (see: No Money To Pay Teachers, Police, Firefighters, and Nurses? Fire Them.).

To ensure that those no longer working for government still enjoyed a raise, retirees in the Civil Service Retirement System received a 4.1% increase in January 2006, a 3.3% increase in January 2007, and a whopping 5.8% increase in January 2009. [9] Less fortunate Federal Employee Retirement System beneficiaries received only a 4.8% bump in January 2009. [10] Taxpayers who paid for these benefits lost their jobs and their savings, and watched their possessions being carried out to the curb alongside the trash.

Cutting public sector pay and benefits would be a historic accomplishment, and would demonstrate our resolve to cut spending, no matter what. A Washington so ethically bankrupt that it uses money collected from unemployed taxpayers during a recession to overly enrich its own personnel deserves to have its budget reduced to the barest essentials. If anyone in Washington, or hoping to prevail on Tuesday, has the courage to do this, the time to speak up is now. We have heard some noise, but what we need is resolve after the election is over. If Mr. Cameron is available, maybe he can help us with that.

1...Congressional Budget Office. The Budget and Economic Outlook: An Update. August 2010. p. ix.

2...Congressional Budget Office. Update to Five-Year Budget Projections: Fiscal Years 1978-1982. July 1977. p. 5.

3...Statement of Rudolph G. Penner, Director, Congressional Budget Office before the Committee on Appropriations. United States Senate. February 22, 1984. p. 2.
4...Congressional Budget Office. Reducing the Deficit: Spending and Revenue Options. March 1994. p. 6.

5...Congressional Budget Office. The Budget and Economic Outlook: An Update. August 2010. p. ix.

6...Remarks by the President on Rebuilding America’s Infrastructure. October 11, 2010.

7...John Boehner. Press Office. Yes, We Can Cut Spending: UK Leads the Way in Slashing Bloated Government. October 20, 2010.

8...Congressional Budget Office. Statement of Earl A. Armbrust, Deputy Assistant Director for General Government Management fore the Committee of the Budget. U.S. House of Representatives. March 12, 1981.

9...U.S. Office of Personnel Management. List of Cost-of-Living Adjustments (COLA).

10..Ibid.