fiscal policy

Mr. Boehner, Please Move Beyond Earmarks

This from the House Speaker-designate for the 112th Congress in today's Wall Street Journal:

[T]here are several steps I believe the next speaker should be prepared to take immediately. Among them:

No earmarks. Earmarks have become a symbol of a broken Washington, and an entire lobbying industry has been created around them. The speaker of the House shouldn't use the power of the office to raid the federal Treasury for pork-barrel projects. To the contrary, the speaker should be an advocate for ending the current earmark process, and should adhere to a personal no-earmarks policy that stands as an example for all members of Congress to follow.

I have maintained a no-earmarks policy throughout my time of service in Congress. I believe the House must adopt a moratorium on all earmarks as a signal of our commitment to ending business as usual in the spending process.

And this from the President during his post-election news conference on Wednesday:

My understanding is Eric Cantor today said that he wanted to see a moratorium on earmarks continuing.  That’s something I think we can -- we can work on together.

In light of the economy, I can understand why Boehner is focusing on earmarks as the most visible symbol of what needs to be fixed on Capitol Hill. And I agree that we need to fix the abuse of the earmark process by reforming it. But the fact is that not all earmarks can be construed as wasteful spending and not all wasteful spending are in earmarks. It's easy to come up with rhetoric denouncing "the evils of earmarks," but what we should be focusing on substantively is wasteful spending.

I don't want to get into debates over how Republicans should define public goods and wasteful spending. I do however want to talk about what principles should be espoused by Republicans when it comes to spending and how we can be innovative on sound spending policies.

What are some budgetary principles that should be communicated by Republicans to the American people?

  • The Solution Principle: Every challenge facing the American people does not require a federal office and federal funding.
  • The Priorities Principle: Every family and every business has to balance their checkbooks, their revenues with their expenses. Through good times and bad times, families and businesses have to sacrifice what they might want and prioritize their spending. The government should operate like any prudent family or business does, and prioritize.
  • The Investment Principle: The American people are "forced to invest" their income into government. Each taxpayer is, therefore, a shareholder in government. Because taxpayers have invested their money into government, taxpayers deserve the best return on their money. This means the "portfolio of investments" (otherwise known as government projects and agencies) must be reviewed carefully and objectively in order for the government to fulfill their due diligence.

How can we turn those principles into solutions? The answer is to do what's difficult, not easy (i.e. earmark moratoriums), and be innovative about our budget from both procedural and substantive points of view:

  • Follow the lead of Paul Ryan and his "Roadmap for America's Future" when it comes to restructuring our entitlements.
  • Don't allow earmarks to be placed during conference committees between the House and Senate.
  • Install a biennial budgeting process, something promoted by Senator George Voinovich (R-OH), while also requiring supermajorities to increase in a fiscal year after a budget has been passed (for legitimate emergencies).
  • Separate capital budgets from operating budgets for each department. Long term projects are very different from short term day-to-day costs.
  • Instead of an executive Chief Performance Officer that gets to pick and choose what works and what doesn't under subjective criteria, have Congress create a Congressional Agency Performance Office that has some independence (like CBO) to constantly scrutinize the operations of all government agencies.
  • On capital projects that go to specific state and local governments, quasi-agencies, and companies, start a Congressional Office for Spending Oversight. Just like every business has control officers, this independent office should scrutinize long term projects' spending practices. This can allow Congress to reward under-budgeted projects and punish over-budgeted projects.
  • Not only should spending be posted online before it's passed. It should also be posted online when it's spent. Just like many state governments have done, the federal government's checkbook should be posted online.

I'm glad that we're getting out in front of the President and Democrats on this. We need to be in a proactive position, not a reactive position. Talking about earmkars is too easy. This is just another area where we need to develop political communication and public policy entrepreneurship on a serious issue.

President Dave Kovic?

 In his weekly address, President Obama announced today that he has "begun scouring our budget line by line for programs that don't work so we can make room for those that do... it means reinstating the pay-as-you-go rule that we followed during the 1990s - so if we want to spend, we'll need to find somewhere else to cut."  He went on to add "Finally, in the coming weeks, I will be announcing the elimination of dozens of government programs shown to be wasteful or ineffective.  In this effort, there will be no sacred cows, and no pet projects.  All across America, families are making hard choices, and it's time their government did the same."

For a kid who grew up loving Kevin Kline's title character in Dave making room for a homeless shelter by cutting payments to non-performing contractors and an ad program to make people feel better about cars "they've already bought," this is music to my ears, and I would really love to see the Obama administration follow through on this. 

Any recommendations on where those cuts should be made?

The GOP's Credibility Problem

"The key to Republican credibility - on transparency and many other issues - is actual, unilateral leadership," wrote Jon Henke a couple of weeks ago.  He's correct, but I'll add that a major component of leadership is walking the walk before talking the talk.

Right now, millions of Americans are hopping mad about Obama's stimulus packages and for the first time in years the right is "Going Galt," as Michelle Malkin calls it.

Talk radio hosts are suddenly spending their time using libertarian and fiscally conservative rhetoric, but for the last eight years they've only provided token resistance (at best) to bloated Republican budgets. As late as today, I heard a local Republican talk show host defending Bush's spending record to a totally disbelieving caller.

Senator McCain talks a great talk about earmarks, but he (along with Governor Palin) also recently called the bailout of Freddie Mac and Fannie Mae "necessary."  At the other side of this spectrum, Senator Shelby has spoken out against the stimulus package, but just took second place in the U.S. Senate pork contest. 

Regarding Alabama's other Republican Senator, Jeff Wartman writes

U.S. Senate Declares War on Hard Workers, Savers and the Next Generation

We Are All SocialistsWith the fifth column support of three Republicans, the U.S. Senate just passed President Obama's eight hundred billion dollar liberal spending package.  Next step, House and Senate negotiators will attempt to reconcile the bills (and quite possibly add more to the price tag in the process).

This spending plan is little more than a major redistribution bill financed by the national credit card.  As a coblogger at another site where I write wrote:

Obama, Pelosi, and the other Democrats selling this plan are focusing only on the gains certain parties will see.  No one is talking about where the wealth to fund this package will come from.  Notice I said wealth, not money.  While it is easy for the government to conjure money out of thin air, it cannot do so with wealth. 

So, where will the wealth for this come from?  It will come from you, me, and anyone else who holds US dollars.  All our wealth stored in dollars will be diminished via the inflation tax.  Those who have saved, invested, and otherwise sought to provide for themselves in the future will be punished.  These are the people who have provided economic stability and prosperity for the nation for two centuries.

In addition, the productive workers of the future will also be punished, as they will be the ones paying back the interest on the wealth redistributed.  The current generation of people under 35 will spend their entire working lives paying the price for the excesses of the Obama stimulus plan.

This plan is a declaration of war on those who produce wealth and live responsibly, now and into the future.  Who must suffer so others may profit?  We do.

Matt Drudge seems to agree with the distinction between wealth and money, as he posted Monopoly money on the top of his website yesterday.

It's quite fitting that the cover story for Newsweek makes this bold declaration: "We Are All Socialists Now."

There may be times, on relatively minor issues, where some level of compromise is a reasonable political and legislative solution.  Where that line should have been drawn in the past is no longer relevant; it's time for Americans to take as strong a stand against domestic socialism as we took again the Soviet Bloc during the Cold War.

"Freedom is never more than one generation away from extinction," said Ronald Reagan in 1961. "We didn’t pass it on to our children in the bloodstream. It must be fought for, protected, and handed on for them to do the same, or one day we will spend our sunset years telling our children what it was once like in the United States when men were free."

The eventual direction the right will choose is still up in the air.  Will they continue to compromise core values for the sake of winning the next election or will they band together to fight the much tougher battle so we don't have to explain to our children what freedom means?

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