Tag Archives: spending

Cutting Federal Spending

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Retired Federal judge and ex-US Senator (D, NY) James Buckley has an idea on this.

dismantle[] the more than 1,100 grants-in-aid programs that spend one-sixth of the federal budget on matters that are the exclusive business of state and local governments.
…
Those programs, which provide funding for Medicaid as well as everything from road and bridge construction to rural housing, job training and fighting childhood obesity—now touch virtually every activity in which state and local governments are engaged. Their direct cost has grown, according to the federal budget, to an estimated $640.8 billion in 2015 from $24.1 billion in 1970.

I’ve advocated elsewhere weaning the States off their Federal Medicaid grant addiction. The remaining 1,109 handouts to the States certainly should be eliminated, also. Those $641 billion compare to 2014’s Federal deficit of $483 billion. That surplus could be used to pay down (a little) our enormous Federal debt and to reverse its skyrocketing increase—a real bending of the curve.

That’s just the pecuniary fiscal cost of those programs and of the States’ addiction to them.

Because the grants come with detailed federal directives, they deprive state and local officials of the flexibility to meet their own responsibilities in the most effective ways, and undermine their citizens’ ability to ensure that their taxes will be used to meet their priorities rather than those of distant federal regulators.

Getting rid of these programs also would be a giant step toward restoring the Federalism that was, and can be again, the bedrock of our nation’s exceptionalism and greatness.

All Right Now

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…or nothing at all, ever. That’s the attitude of the Democratic Party in today’s Congress and of the farther right of the Republican Party in today’s Congress. It’s enough to paralyze Congress and keep it from doing much of anything—and to hand Congress back to the Democrats, which may explain some of their attitude.

I’ve argued before that gridlock isn’t, of necessity, a bad thing, but there are a few things Congress does need to accomplish.

A short, partial list includes

  • funding the legitimate tasks of government, those enumerated in Art I, Sect 8 of our Constitution
  • reforming taxes, which would have the side effect of paring back—significantly—an IRS that thinks it’s outside (not merely above) the law
  • reforming immigration
  • privatizing Social Security and Medicare, and getting rid of the Federal contributions to Medicaid

But none of this can be—nor should it be (Obamacare, anyone? Dodd-Frank?)—done all at once. Easy steps, compromises, that bring us incrementally into that reduced government place we should occupy—and will ultimately get us there.

But to get there, we need to take steps, one after another, not hold out for single leaps that cannot occur.

Congress over the next Two Years

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This is what our newly elected Congress needs to do over the next two years.

  • Re-pass the 40 jobs bills which Senator Harry Reid (D, NV) suppressed, without changing a word. Do it with a roll call vote, forcing the Democrats onto the Congressional voting record. President Barack Obama will veto or sign them.
  • Repeal the ACA and Dodd-Frank. Do these with roll call votes, forcing the Democrats onto the Congressional voting record. Obama will veto or sign them.
  • Repeal various parts of ACA, Dodd-Frank, one by one. Do each with a roll call vote, forcing the Democrats onto the Congressional voting record. Obama will veto or sign them.
  • Repeal most of the EPA’s regulations, particularly the ones impacting coal, oil, natural gas, and how private lands can be used. Do it with a roll call vote, forcing the Democrats onto the Congressional voting record. Obama will veto or sign them.
  • Pass tax reform with lowered personal, business rates, closed loopholes and subsidies. Do it with a roll call vote, forcing the Democrats onto the Congressional voting record. Obama will veto or sign them.
  • Pass budgets each year that fully fund the Federal government without funding the ACA or Dodd-Frank remnants and severely restricting funding for the EPA and the Labor Department and its political arm, the NLRB. Do this with roll call votes, forcing the Democrats onto the Congressional voting record. Obama will veto or sign them. Make clear how the obstructionist President prefers to shut off government altogether in his temper tantrum if he can’t have his way.
  • Pass border control legislation. Do it with a roll call vote, forcing the Democrats onto the Congressional voting record. Obama will veto or sign.
  • Pass immigration entry reform legislation contingent on a decently secured border, but don’t wait on border security to pass this. The contingency will allow this reform to be passed this session. Do it with a roll call vote, forcing the Democrats onto the Congressional voting record. Obama will veto or sign.
  • Pass legislation vis-à-vis existing illegal aliens contingent on a decently secured border and entry reform, but don’t wait on those to pass this. The contingency will allow this reform to be passed this session. Do it with a roll call vote, forcing the Democrats onto the Congressional voting record. Obama will veto or sign.
  • Seriously restrict regulation delegation authority. Do it with a roll call vote, forcing the Democrats onto the Congressional voting record. Obama will veto or sign.

Our Congress needs to do this against a backdrop of House—and now Senate—hearings into Fast and Furious, IRS, Benghazi, VA, Secret Service failures, immigration lawlessness, NSA snooping, Iran’s nuclear weapons program, DoJ stonewalling of those investigations. Both chambers need to pursue these investigations and associated hearings with zeal, but they shouldn’t be in attack dog mode.

Our Congress needs to take action on the findings of the House Select Committee on Benghazi chaired by Congressman Trey Gowdy (R, SC).

This adds up to a full slate of activities for the 114th Congress.

All cases—legislation and investigative hearings—have two purposes. The first, and foremost, purpose is to get government out of the way of our economy so we can regain our prosperity and to learn and expose the truth of what’s been going on during the Obama administration so that those…failures…can be corrected. The secondary purpose is to keep the Obama administration’s failures of policy and of behavior in the public’s eye.

Don’t waste time on an impeachment effort. They don’t have the votes to convict in the Senate, but the effort will let the NLMSM change the subject away from the Obama administration failures. Of course, the NLMSM might well attempt simply to spike the stories about the legislation and the investigations and hearings, like they did Jonathan Gruber’s truth-telling and most of them did Obama’s immigration “reform” speech last night. But it’ll be a hard thing to spike for two years.

This will be the most effective way of demonstrating the distinction between Conservatives and Democrats/Progressives, of showing what Conservatives stand for and work to achieve compared to what the Democrats/Progressives stand against and work to block. It will give Americans a choice in 2016: a President of little experience and no accomplishment—Hillary Clinton channeling one aspect of Barack Obama—a President bent on Progressive, Big Government policies without regard to the law or the American people—Elizabeth Warren channeling another aspect of Barack Obama—versus a Conservative President, bent on reducing government’s intrusion into Americans’ lives and shrinking government’s interference with Americans’ economy.

This will shape the elections of 2016.

Another Case for Tax Reform

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British Prime Minister had this to say Thursday (if that link doesn’t work, the Daily Mail has a good summary and paraphrase):

We know the economic case for cutting taxes: in a competitive world we cannot afford to carry on as a bloated, high-taxing, welfare-heavy nation.

We have to direct our resources to incentivising work through tax cuts and not incentivising welfare through extra benefit entitlements.

We have to fight the notion that you can endlessly suck more taxes out of businesses and bite the hand that feeds…. For me, the simplest way to help with living standards is this: allow people to take home more of their own money.

And

Every single pound of public money started as private earning. Every million in the Treasury represents a huge amount of hard work: early morning alarms, long commutes, hours spent on the factory floor, the office, the hospital ward, or the classroom.

The Wall Street Journal rightly offered kudos for this awakening, but they missed a key point.

[T]he case for tax cuts is as much about freedom as it is about spurring growth.

True enough. But freedom is what allows those spurs to exist. Freedom is what allows economic growth to occur. Freedom is what allows prosperity.

In A Separate Report….

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Overall household spending [Note: household spending is different from the consumer spending I referenced in yesterday’s article, and this is a different report from the one I referenced yesterday] fell 0.2% from August, the first decline since January and only the third since the recession ended in mid-2009, the Commerce Department said Friday. The drop reflected a big decline in purchases of big-ticket items such as cars.

Falling demand for cars, household appliances, and other big-ticket (read: expensive—have you priced refrigerators or dryers lately?) items: is this a one-time blip or a trend resulting from pent-up demand being momentarily released? The old family beater finally wore out, and the family had to buy another car? That’s consistent with anemic consumer spending generally these last several quarters. Still, it could be a blip, and household spending (not the same as consumer spending, but close enough for the context) could be discovered to have resumed its slow growth when October’s numbers are published.

Meanwhile,

Americans’ overall income—including money from wages, investments, and government aid—climbed 0.2%, the smallest increase of the year.

And

Inflation-adjusted household spending on durable goods fell 1.9% from August, the sharpest decline since September 2009.

That’s at the consistently very low inflation rates, too. This is what we’re actually spending (or not) in terms of buying power—how far our paychecks go—and it’s a long-term trend. These wage and adjusted spending numbers don’t comport with hopes of higher spending, and so of real economic recovery in the near or medium-term future.

And this:

Friday’s report also showed US inflation remains below the Federal Reserve’s annual 2% target. The price index for personal consumption expenditures—the Fed’s preferred inflation measure-rose 0.1% from August and 1.4% from a year earlier.

Low inflation is good, but inflation this low is reflective of low demand. See above, regarding income, for an idea of future recovery.