4 Things Our Government Should Stop Wasting Money On
A Tea Party-infused GOP is calling for major cuts to federal spending. But for most Republicans, the newfound concern with deficits is demonstrably cynical. Just look at the deafening silence from the Right that greeted the $1.2 trillion (and growing) deficit that President Bush ran up. Conservative fearmongering is mostly an excuse to plunder the safety net. “The idea that somehow we’re going to be Greece is just flat out silly,” says Dean Baker, an economist at the Center for Economic Policy Research. “Basically, it’s a cheap scare tactic to force austerity.”
Though catastrophic prophesies of a government gone bankrupt are paper tigers, there are still plenty of things progressives would like to see cut: a sprawling defense budget that funds two wars and hundreds of military bases world-wide; a criminal justice system that spends billions to lock up millions of (too often black) Americans; and corporate welfare in the form of subsidies for oil and gas companies, and for industrial agriculture. Harmful government spending is a much bigger problem than wasteful government spending. Positive social spending is all too scarce, and constantly under pressure.
While the Tea Party has presented itself as an anti-establishment force in politics, on policy, it has been establishment enhancing: “tough on the deficit” while spending billions on war, prisons and corporate welfare. When so-called fiscal conservatives support harmful government spending, progressives should point out the contradiction and hold them accountable.
Authentic libertarians do not have a major presence in the Republican Party. Not today and certainly not before last November. In the 2000s, Ron Paul, a critic of the wars in Iraq and Afghanistan and the drug war, was marginalized within the Republican Party. Rand Paul, the congressman’s son, is the new Republican senator from Kentucky. The two are close, but Rand has without a doubt distanced himself from his father on foreign policy and the drug war, though he has done so quietly. He tends to emphasize the aspects of his father’s libertarianism that resonate within today’s Right and de-emphasizes or equivocates on the rest.
The remainder of the new Tea Party caucus on Capitol Hill is even worse news: they tend to be across-the-board more conservative than their colleagues.
But if there was a time to make cuts to harmful spending, this is it. The fervor of the Tea Party base and the drum beat on the deficit means that just about any proposal for cuts might at least get a hearing.
“I think if there are left-wing folks, they’ll find Tea Party allies for anything that involves cuts,” says Dave Weigel, a writer for Slate who chronicles the conservative movement. “Anyone who comes out and says 'This is a wasteful program we can get rid' of will get the attention of these new members of Congress.”
Is there an opportunity for bipartisan reform? If there is, it’s just much, much smaller than you’d expect given the foreboding talk of fiscal apocalypse. But since Republicans have put budget cuts on the agenda, progressives should offer proposals of their own. An aggressive campaign to cut harmful public spending could deliver results and at the same time leave social spending intact. When it comes to protecting the programs that matter, the best defense is a good offense.
1. War and the Defense Budget
The monies that pay for the Pentagon’s global operations and two ongoing wars take up at least one-fifth of the federal budget. Though the anti-war movement that challenged the Bush administration’s invasion of Iraq has largely fallen apart, congressional Democrats have shown an increasing willingness over the past year to challenge Obama’s troop buildup in Afghanistan. Short of fundamentally downsizing the Pentagon or defunding the American empire, Obama and a number of Republicans have called for cutting wasteful and ineffective weapons programs. But this is one infamously resilient budget item. It took years to kill the F-22 jet, whose production Lockheed Martin had ingeniously spread across 46 states to ensure political support.
So what of the libertarian Right? Ron Paul had a freaky and gold-obsessed economic philosophy, but who on the Left didn’t enjoy watching him during the 2008 primary go after his opponents over the war in Iraq? His newfound popularity, however, is a function of his conservative economic views and in spite of his anti-interventionist posture on foreign policy. The Tea Party has not proven to be an anti-war force. At best, Tea Partiers have proven to be indifferent. At worst, they are hawks with McCarthyite political reflexes like Representative Michele Bachmann.
Leon T. Hadar, a research fellow at the libertarian Cato Institute, has complained that “The populist insurgents seem to have been relatively silent when it comes to dead-end American foreign policy and the high costs in blood and treasure of the never-ending U.S. global interventionism.”
Though modest, cuts that would have seemed impossible a decade ago now have support Right and Left. According to the New York Times, “divisions have opened among Republicans about whether, and how much, to chop Pentagon spending,” which totals about $700 billion annually, including outlays for the two wars. An article in the Associated Press quotes a Tea Party Patriots leader saying, "The widely held sentiment among Tea Party Patriot members is that every item in the budget, including military spending and foreign aid, must be on the table...The mentality that certain programs are 'off the table' must be taken off the table."
But it’s unclear how widespread the support is or how deep the enthusiasm runs. Obama called for defense cuts in his State of the Union address. In the official Republican response, austerity guru and House Budget Committee Chairman Representative Paul Ryan failed to mention defense. His much-touted “Roadmap” prioritizes cuts to, well, everything else, and calls for dismantling Medicare, privatizing Social Security--all the while delivering major tax breaks to the wealthy. There’s a lot of talk about “freezing" -- which means cutting when inflation and population growth are factored in -- "non-defense discretionary spending.” If progressives want to push significant cuts to warfare spending, they will have to make a point of it.
“When people nail these guys down they’ll talk about the defense budget,” says Weigel. “But it’s not where they go first.”
The Right’s emphasis on cutting social spending was echoed in the proposed cuts released by the Republican Study Committee, which was, at least before the founding of the Tea Party Caucus, the place to be for the House’s most conservative members. Most of the cuts are to Medicaid, Amtrak, public transportation, and large-scale across the board cuts to--this should sound familiar--“non-defense, non-homeland security, non-veterans spending.”
“I’m sure they’ll be cuts. But the question is how much. It depends how angry people are,” says Dean. “That’s a big budget item, one arguably where you could have very large cost savings. After that, everything else is pretty small.”
Anger, to be sure, is not in short supply. But there are still many, many conservatives for whom Big Government does not include the 20 percent of that government’s budget devoured each and every year by the Pentagon. In 2008, economists Joseph Stiglitz and Linda Bilmes made a “conservative estimate” that the Iraq war would cost the U.S. $3 trillion over the long haul.
When it comes to the preamble of the Constitution’s charge to “provide for the common defence, promote the general Welfare,” the Republican Study Committee really gives the latter short shrift.
Rand Paul may be an outlier. In a December statement, Paul approvingly cited the bipartisan House effort to cut defense spending spearheaded by his father and Democrat Barney Frank.
“I believe that large cuts in defense spending are indispensable if we hope to return to balanced budgets any time in the foreseeable future,” he wrote on his Web site. “Unfortunately, these cuts may not occur due to resistance from neoconservative Republicans. That’s right – many of the same people who made deficit reduction a signature issue on the campaign trail are unwilling to even consider cutting the largest source of our deficits.”
Paul was attacked on foreign policy during last year’s Republican primary. An out-of-state organization supporting his more conventional opponent aired an ad citing remarks Paul had made about Iran.
"Kentucky's great military families would be surprised to know what Paul thinks of a nuclear Iran", intones a stock sonorous voice. And then a recording of Paul: "Our national security is not threatened by Iran having one nuclear weapon." But Republican primary voters didn't care. Not because they agreed with him on foreign policy--just because they supported his economic platform and didn't care about how unorthodox he was on the rest.
Paul recently made waves when he told CNN that his call for cuts to foreign aid should include Israel. Democrats swiftly took the political opportunity and attacked, underlining a significant obstacle to reform on many of these issues: the moment a Republican stops baiting Democrats on security issues, some Democrats may be eager to take the political opportunity and switch roles.
Tea Party-backed candidates who might share Ron Paul’s thinking tend to embrace his free market orthodoxies while jettisoning the positions with less widespread appeal on the right.
“They really have only been influenced by those people on economics,” says Weigel. “They’re not for serious defense cuts.”
Utah’s new Tea Party-backed Senator Mike Lee spoke against “subjecting our young men and women to danger if the purpose is simply nation building” during last year’s primary, according to an Associated Press article. He then backpedaled. Strong-on-defense types and neoconservatives still set the tone on foreign policy. But if Lee is both politically fickle and sympathetic to defense cuts, his brand of Tea Partier could be moved by political pressure from the right-wing grassroots.
Florida Senator Marco Rubio, however, is just more conventional: a strong supporter of the war who opposes deadlines for withdrawing troops. Tea Party luminary Sarah Palin is undoubtedly a hawk.
If Republicans are so eager to cut, then progressives should hold their feet to the fire on military spending. It could yield results. But don’t confuse your run-of-the-mill Tea Partier with Ron Paul. No matter how popular the gold standard becomes.
“No one in the Tea Party movement went into the streets because of defense spending,” says Weigel. “They got into it because of the stimulus, health care, high-speed rail.”
2. Immigration Reform
The costs of harsh immigration enforcement go beyond political scaremongering and broken families. Deportations cost taxpayer dollars.
Numbers on how much it costs to deport an immigrant just came out: $12,500 per immigrant, which added up to $5 billion last year. That would be $137 billion to deport all 11 million undocumented immigrants. Immigrant rights advocates have cleverly labeled this spending a “deportation tax.” How would the Tea Party square that federal largesse?
It’s unlikely, of course, that this will change the minds of Tea Party Patriots intent on fencing off our border. But progressives in Congress could use this language to push back against the most egregious measures, programs like 287(g) and Secure Communities, which allow local police to enforce immigration laws. Unlike with most of the other issues listed here, the real conservative allies on immigration are (with some major caveats) centrist, business-friendly conservatives. Meanwhile, many on the isolationist right want to bring troops home from overseas and redeploy them along our border. Fortress America.
At best, talk of a deportation tax could slow the advance of the most virulently anti-immigrant politicians. When Secretary of Homeland Security Janet Napolitano last month quietly discontinued the completely bungled “virtual fence,” there was hardly any protest.
"House Republicans seem hell-bent on taxing Americans to fund their mass deportation obsession, instead of taxing immigrants and their employers,” according to a statement from America’s Voice executive director Frank Sherry. “The smart, effective, and fiscally sound approach is clear. When will the budget hawks in the party step up and take the wheel from the anti-immigrant ideologues like [Representatives] Smith, Gallegly and King?"
Right-wing politicians have made some towns and the entire state of Arizona into laboratories of extreme immigration enforcement. According to a new report from the Southern Poverty Law Center, towns that passed harsh laws going after immigrants, landlords and employers have spent hundreds of thousands and even millions of dollars in legal fees. Fremont, Nebraska was forced to raise property taxes.
Arizona hasn’t done itself any favors either. As I explained in an article on Salon, Arizona’s anti-immigrant legislation may have cost it a chance at winning a second new House seat by scaring Latinos out of the state and depressing census participation among those who remained. It has also, according to political scientist Michael P. McDonald, potentially cost the state in federal funds, up to $775 million a year.
3. Criminal Justice and the Prison-Industrial Complex
Budget deficits at the federal, state and local level are forcing politicians to take a fresh look at the $69-billion-a-year cost of locking so many people up. What seems plain wrong to progressives and civil rights activists now screams scandalous waste to a growing number of conservatives. This is one of the few issues where there could be actual cooperation, rather than mere coincidence, between Right and Left.
In December, prominent conservatives unveiled a new organization dedicated to prison reform called Right On Crime. The effort to downsize America’s prison population has support from GOP luminaries like Newt Gingrich, fiscal conservative Grover Norquist, former Attorney General Edwin Meese, former drug czar William Bennett, former DEA chief Asa Hutchinson, and representatives from social conservative groups like Concerned Women for America and the Family Research Council.
What’s striking is how old guard this set of conservatives is, stretching from evangelicals to fiscal conservatives. Will energetic Tea Party types catch the prison reform bug? The big challenge will be getting their attention as they start hacking away at the budget.
“It’s very helpful to have conservatives who make a big deal about being law and order types taking the lead,” says Baker.
This is less a libertarian Ron Paul freedom-to-smoke pot thing and has more to do with cost-savings and religious conversion. For decades Republicans have campaigned on tough-on-crime platforms and Democrats have scurried for cover; terrified at being pegged as criminal-friendly, they often upped the ante. The political foolishness and cowardice led to three strikes laws, mandatory minimum sentencing, abolition of parole, and, as a result, an exploding prison population. The prison boom was fueled by the wrong kind of bipartisan cooperation--the kind of muscle flexing and bravado that landed us in two foreign wars.
This may be the party that brought us Willie Horton, but when was the last time you saw a political advertisement warning voters that a liberal candidate would release dangerous criminals into the community? The war on terror long ago absorbed the lion’s share of our nation’s security paranoia.
This is an issue where the GOP could make common cause with progressive Democrats. Right On Crime’s statement of principals articulates this brand of small government politics:
"Conservatives correctly insist that government services be evaluated on whether they produce the best possible results at the lowest possible cost, but too often this lens of accountability has not focused as much on public safety policies as other areas of government. As such, corrections spending has expanded to become the second fastest growing area of state budgets-trailing only Medicaid."
Right On Crime is based out of the Texas Public Policy Foundation, a leading conservative institution in a state that leads the country in both incarceration and execution. They point to steps the Lone Star state has taken to strengthen drug treatment, a reform that has saved the state money and increased public safety. The is a particularly strong opportunity for bi-partisan cooperation on prison reform at the state and local level, where cash-strapped elected officials are deeply anxious to balance budgets.
And it’s not just the small government crowd pushing for reform. The Prison Fellowship Ministry, founded by Watergate felon Chuck Colson, has supported less draconian sentencing and efforts to reintegrate former prisoners into the community. After all, 95 percent of people currently behind bars are getting out at some point, and an employed ex-offender is much less likely to commit another crime. In December, Pat Robertson told 700 Club viewers that “criminalization of marijuana” is “costing us a fortune and it's ruining young people.” Amen.
Some on the Left have raised serious concerns about unconstitutional state support and preferences for evangelical prison fellowships. But what’s most important here is indisputable: some Republicans, whether from reading Bible or bottom line, may have had a come-to-Jesus moment on criminal justice. Last August, the Fellowship joined the ACLU to demand tougher measures against prison rape. Together, libertarians and the Religious Right have the power to make things happen in the GOP.
In 2010, President Obama signed legislation reducing the disparity in sentencing guidelines between crack and powder cocaine, which like much of the drug war has a disproportionate impact on blacks. The bipartisan support was striking: the House passed the legislation by voice vote, the Senate by unanimous consent.
4. Corporate Welfare in Five Acts
There are innumerable government programs that give away money to corporations and to wealthy people who don’t need it. Here are a few examples:
- Cut subsidies for oil and gas companies:
Obama has made getting rid of $4 billion in subsidies and tax breaks to oil and natural gas companies a centerpiece of his platform this year. That this is a good idea should be clear. Whether it’s possible is another question entirely, given the industry’s outsized political power. What do conservatives think about it? Heritage Foundation energy economist David W. Kreutzer told the New York Times that the federal government should get rid of all subsidies, including for clean energy. Maybe progressives can convince the Tea Party to meet them halfway and get rid of the truly noxious stuff first.
- Get rid of farm subsidies for millionaire “farmers”
According to the Economic Policy Institute’s Robert Scott, 61 percent of agricultural subsidies go to the wealthiest 10 percent of farmers, mainly for farming corn, cotton, soybeans and wheat. Not to small farmers raising, say, vegetables. This subsidy is not only a giveaway to the wealthy, it’s a subsidy for the raw materials for highly processed foods that make our country sick and obese.
The aforementioned political attack ad during Kentucky’s Republican primary also criticized Paul for opposing farm subsidies. And Kentucky’s Democratic governor echoed those criticisms during the general election. Though Paul insisted that he only wanted to narrowly curtail the program, this is an issue where libertarians and progressives could challenge a bipartisan agribusiness establishment.
- Reform or abolish the mortgage interest deduction (MID):
Homeowners paying off debt get to deduct a lot of money from their taxes. This is a bad idea because the deduction disproportionately benefits the rich, in two ways: first, while the wealthy usually take itemized deductions, most poorer people just take the standard deduction and thus don’t receive any benefit; second, since the deduction is the product of your interest and your tax rate, people with the highest marginal tax rates and the most expensive mortgages get the biggest deductions. And renters get no benefit whatsoever. It costs the government $131 billion a year.
Conservatives like the Cato Institute’s Mark Calabria oppose the MID, and so do progressives like the economist Dean Baker. Obama’s slash-happy deficit reduction commission endorsed the idea. So did President Bush’s 2005 Advisory Panel on Federal Tax Reform. Sadly, welfare programs for the middle class and wealthy are the hardest ones to get rid of. If politicians don’t want to slash it, lowering the eligibility to loans worth $500,000 or less from the current $1 million and turning the itemized deduction into a tax credit would be more equitable and squander less tax revenue.
- Allow Medicare to negotiate drug discounts the way the VA does:
If Medicare were allowed to negotiate bulk drug prices for participants in Part D, the part of Medicare that covers prescription drugs, the government would save a lot of money. “If Medicaid and Medicare paid the same as Australia or Canada, or even the VA, you could save tens of billions of dollars a year,” says Baker.
The pharmaceutical industry, which flexed its muscle to great effect during the health-care debate, has long opposed such a move. The Pharmaceutical Research and Manufacturers of America (PhRMA) threw its weight behind health-care reform after receiving a behind-closed-door guarantee from Obama and Senate Democratic leaders to block efforts to allow for negotiation--infuriating progressives.
“You couldn’t even get through the House, not even the Senate,” says Dean. “It’s not even clear if Obama would sign it. They’ll yell and scream bloody murder.”
But it’s not clear why the government negotiating bulk discounts would run counter to free market principals. Any business making such a large purchase would do the same.
- End the tax break for hedge fund managers:
Because of the creative exploitation of a tax loophole, extremely rich hedge fund managers are able to count their earnings as capital gains instead of income, which means they are taxed at just 15 percent instead of the much higher rate of 35 percent that the regular super-rich non-Wall Street people pay on the money they make. This means that fund mangers pay taxes at a lower rate than their secretaries. There have been various attempts to close this loophole over the past few years, according to Citizens for Tax Justice. But Republicans and Wall Street-friendly Democrats have defended the status quo. The House passed legislation closing the loophole in December 2009 but it eventually succumbed to a filibuster in the Senate.
Republicans uniformly oppose anything that looks like a tax increase. But how can they defend a setup that taxes bankers at a higher rate than regular old rich people?
“The way to do it,” says Weigel, “is say, ‘I’m a liberal and there’s a program that I don’t like because it hurts a group of people that I work with, and it’s also wasteful. If it’s wasteful, that’s how you get people interested.”