Posturing aside, legislators from both parties claim to know that our deficit is a bad thing. They know it now, they knew it last year, and they should have known it 25 years ago, because we were already being warned that it was a problem:
The American economy faces unprecedented risks in the years ahead unless the federal government takes measures to narrow the gap between tax revenues and spending. … Even when gauged in relation to a growing gross national product (GNP), the size of these deficits is startling. ¹
The president’s bipartisan “deficit reduction panel,” the National Commission on Fiscal Responsibility and Reform, made headlines with a draft report suggesting cuts in everything from Social Security to defense. The attention the report attracted is perplexing. The panel is charged with little more than issuing recommendations, and the inevitable Congressional roadblocks will ensure that the whole exercise becomes an experiment in futility.
The commission’s report includes a suggestion that we direct benefits to the “truly disadvantaged.” There has always been disagreement in Washington as to exactly who that entails, and membership in the group tends to vary with the partisan composition of Congress and their special interest supporters. Even the welfare of children, a perennial, inarguable excuse for spending, depends on the whims of special interests.
For example, last spring, Secretary of Education Arne Duncan asked for $23 billion to pay for teachers’ jobs. Legislators and the president hopped on the bandwagon. Teacher jobs were at risk. State budgets were depleted. We needed to spend, and spend a lot, to forestall a crisis, so Mr. Duncan appealed to House Speaker Pelosi:
We are gravely concerned that ongoing state and local budget challenges are threatening hundreds of thousands of teacher jobs for the upcoming school year, with estimates ranging from 100,000 to 300,000 education jobs at risk. ²
When the bill passed in August, Mr. Duncan only got $10 billion for teachers, but we added $16 billion for a state Medicaid bailout that paid for scores of public sector jobs unrelated to education. What was the common thread in the spending? Not children. Organized labor. The jobs that we funded have a union membership rate of 43.3%.³
Washington’s fears about teacher shortages did not prevent the Department of Education from offering a slideshow, “Counseling Undocumented Students about Financial Aid,” a guide to advising illegal immigrants on how to afford the cost of a U.S. education. The slides include information on which states grant illegal aliens in-state tuition at taxpayer-supported schools, and the guidelines necessary to qualify for those subsidized rates.4 State schools are already in trouble. Why is Washington seeking to add to our financial woes by luring students who have no right to be here?
The president claims to be a fervent advocate of deficit reduction, but he is also a big supporter of spending. Mr. Obama advocated the aforementioned $26 billion education jobs/Medicaid bill, a $30 billion bailout for community banks, and a $36 billion bump in Pell Grant spending. Recent suggestions include a $50 billion infrastructure bank, despite warnings that the near-term job creation effects of infrastructure projects will be minimal (see: A Federal Infrastructure Bank: Stashing Cash for a Jobless Tomorrow).
The deficit reduction panel’s ideas on how we can cut spending include freezing federal salaries, cutting government jobs, and instituting health co-pays for veterans. Even more laughable suggestions range from forming a committee to cut waste and bureaucratic excess, which begs the question of how much waste can be left, given the bills we plan to fund by controlling it, and the truly hilarious proposal that Congress eliminate earmarks. A love of earmarks may be the only issue for which Congress enjoys bipartisan agreement. Does the commission really believe we will vote that one into law?
Deficit reduction is an excuse to push spending bills with the easy rationalization that they will either not add to, or will reduce the deficit. Otherwise, it is little more than an elusive concept. Talking is easy, appointing commissions is easy, but agreeing on who gets hurt is tough. Without bipartisan agreement on spending cuts, the task will be impossible.
Mr. Obama’s commission will issue their report on December 1, 2010. The media will have a field day with the suggestions, senior citizens will fear for their financial lives, and special interests will lambast their senators and representatives. When the time comes to bring out the shears, will the commission’s ideas come to fruition, and will we make a good-faith effort to cut spending?
Not on your life.
1..Congressional Budget Office. Reducing the Deficit: Spending and Revenue Options. February 1983. p. 1.
2..U.S. Department of Education. Obama Administration Supports Emergency Funding to Save Teacher Jobs. Text of letter from Education Secretary Duncan to House Speaker Pelosi. May 13, 2010.
3..Bureau of Labor Statistics. Union Members Summary. January 22, 2010.
4..Federal Student Aid: Federal Student Aid for Counselors. Counseling Undocumented Students About Financial Aid.