The federal program that wouldn’t die

There is a line item in the budget that costs nearly a half million dollars.  Republicans oppose it.  Democrats oppose it.  President Obama wants to kill it.  The House Republican leadership wants to kill it.  And yet, this program has gone on for twenty years and NO ONE CAN END IT. [Read more...]

Who won in the budget showdown?

The Republicans, according to this analysis, got the better of the budget negotiations:

HR1 was originally to seek spending cuts of $32 billion until Tea Party conservatives insisted on more than $ 60 billion. House Speaker John Boehner won more cuts than he originally sought and got the Senate to agree to votes to defund the health care reform law and groups like the nation’s largest abortion provider Planned Parenthood – once votes Senate Majority leader Harry Reid said he’d never allow to come to the floor.Back on February 3, Reid called $32 billion in cuts “extreme” and “draconian.”

At a news conference New York Sen. Chuck Schumer, D-N.Y., agreed, “I happen to think some of their cuts are extreme and go overboard. But every week they keep upping the ante and proposing extreme cuts.”

Over the next decade the cuts are expected to save hundreds of billions of dollars.

The deal mandates a host of studies and audits of Obama administration policies. It also blocks additional funds for the IRS sought by the Obama administration and bans federal funding of abortion in Washington, D.C.

The history of offers on this bill goes something like this. Democrats first offered no cuts, then $4 billion, then $6.5 billion, then $33 billion, then settled at $38.5 billion.

Boehner made numerous adjustments to his offer in recent days too, but started at $32 billion, then with a Tea Party push went to $62 billion, then dropped to $40 billion, then $38.5 billion.

Democrats claimed they met Republicans halfway after the $10 billion in cuts that already passed this year were approved. They settled late Friday night at three and a half times more.

Boehner came in $8.5 billion higher than the halfway point between his high offer of $61 billion in cuts and the Democrats opening bid of zero cuts.

via Who Won the Shutdown Showdown? It Wasn’t Even Close – FoxNews.com.

What should the government do?

Economics columnist Robert J. Samuelson points out that before we can cut government spending, we need to arrive at a philosophy of government:

Modern democracies have created a new morality. Government benefits, once conferred, cannot be revoked. People expect them and consider them property rights. Just as government cannot randomly confiscate property, it cannot withdraw benefits without violating a moral code. The old-fashioned idea that government policies should serve the “national interest” has given way to inertia and squatters’ rights.

One task of the National Commission on Fiscal Responsibility and Reform – co-chaired by Erskine Bowles and Alan Simpson – was to discredit this self-serving morality. Otherwise, changing the budget will be hard, maybe impossible. If everyone feels morally entitled to existing benefits and tax breaks, public opinion will remain hopelessly muddled: desirous in the abstract of curbing budget deficits but adamant about keeping all of Social Security, Medicare and everything else. Politicians will be scared to make tough decisions for fear of voter reprisals.

Unfortunately, Bowles and Simpson ducked this political challenge. They performed an accounting exercise to shrink the deficit without trying to define what government should do and why. . . .

It’s not in the national interest to subsidize farmers, because food would be produced at low cost without subsidies. It’s not in the national interest to subsidize Americans, through Social Security and Medicare, for the last 20 or 25 years of their lives because healthier people live longer and the huge costs make the budget unmanageable. It’s not in the national interest to subsidize mass transit, because most benefits are enjoyed locally: If the locals want mass transit, they should pay for it. As we debate these questions, groups will inevitably promote their self-interest. But in doing so, they should have to meet exacting standards that their self-interest also serves the broader national interest. . . .

The biggest blunder of their approach involved huge proposed cuts in defense, about a fifth of federal spending. National security is government’s first job. Bowles and Simpson reduced it proportionately with all other discretionary spending as if there’s no difference between a dollar for defense and a dollar for art subsidies. Nor was there much effort to identify programs that should be eliminated because they fail the national need test. . . .

This was a formula for changing government without a philosophy of government.

via Robert J. Samuelson – What the Bowles-Simpson plan left out.

OK, let’s help formulate a philosophy of government that could set some priorities and thus help us make decisions about the national budget.  (That’s what I have to as a college administrator, come to think of it!  We set priorities and then we work out the budget accordingly.)

What do you think the government should do?  What difference would that make in what gets budgeted and what gets cut?


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