House Republicans are about to trigger another government “shutdown” which even some of the most ardent acknowledge will accomplish nothing. Talk about tilting at windmills.
Some weeks from now, appropriations bills will be enacted and total spending will be not one dollar lower for the shutdown. Despite their repeated failures, House Republicans are not wrong in principle, but they lack the political power and, more importantly, they lack a politically compelling approach to reducing spending.
Even many on the Left admit federal budget deficits are unsustainable. The Congressional Budget Office projects a $1.5 trillion deficit this year that essentially doubles over the next decade. The Lefties aren’t worried, however.
If red ink doesn’t cause a crisis, then why worry? And if it does, then the crisis will present their chance for the massive tax hike they can’t otherwise sell American voters. So, the Left just bides its time with every incentive to push spending higher. It’s all win-win for them.
Not everyone thinks this is a great idea, so why can’t conservatives gain support for spending restraint? Empty gestures.
Republicans talk about rolling back Biden’s spending spree. Hint: Nobody knows what that means, but to many it just sounds like a partisan attack. If you’re serious about cutting spending, then your approach has to seem serious to the voters.
More traditionally, Republicans use language like cutting spending 10%. You can just see the banners. “10% NOW!,” like it’s an after-thought sale at your local used-car dealer. Or they preach “balancing the budget,” which sounds great but doesn’t really mean anything. Balanced at what level? At a level that assumes the Democrats’ spending and tax hikes? Lovely.
Republicans have long struggled because government spending decisions are inherently political yet their political appeal is limited to the shrinking fiscal discipline caucus. Missing is a defining, compelling and explainable political philosophy to guide their program.
A recent Wall Street Journal editorial (The Great Northeast Wind Bailout) hints at such a philosophy. Governors of northeast states like Massachusetts and New Jersey committed to vast offshore wind projects.
Surprise, surprise, these projects are unaffordable even with a 30% federal tax credit, so the governors want the federal government to bend the rules and up the credit. Query: why should other states’ citizens foot the bill for unaffordable Northeast wind projects?
The federal budget is bloated with such policies benefiting specific regions. Take the Low-Income Home Energy Assistance Program (LIHEAP). If you’re low income and live where winters are really cold, then the Feds will help you pay your heating bills. You weren’t compelled. You chose to live where it’s cold in the winter (and have no cooling expenses in the summer). Why should you get special benefits to cover your heating bill?
To be clear, if Vermont wants to fund a LIHEAP, that’s up to Vermonters. But there’s no reason the rest of the country should pay for LIHEAP, just as there’s no reason the rest of the country should bailout Northeast wind projects.
Nor is this just an assault on programs for the poor. A multitude of federal programs funnel billions through localized programs that ultimately go to middle-income and upper-income beneficiaries. Every hear of flood insurance, ethanol, or mass-transit subsidies?
Federal spending should be restricted to broad, general, nationwide programs. This approach provides a firm political basis for reducing federal spending and one that can be explained in a more compelling way than indiscriminate percentage cuts. And that’s the point.
To reduce spending requires neither jingles nor budget process reform. It requires strong political support and that can only come from a compelling political philosophy explained and championed consistently.
Eliminating targeted benefits and transfers isn’t a magic bullet. It won’t balance the budget at lower spending levels or even make overall spending sustainable, any more than would a 10% cut to appropriations.
To an extent these are symbols, true, but they’re real money and they’re a start. And like foreign aid, if you can’t cut the obvious, then you have no chance of cutting elsewhere.
Nor will a robust fiscal philosophy turn spending restraint into a cakewalk. The usual swamp creatures will wail about warnings of sky-falling catastrophes. But eliminating targeted spending does provide a sound basis for building public support — and winning. If you’re still looking for easy answers, try another government shutdown.
JD Foster is the former chief economist at the Office of Management and Budget and former chief economist and senior vice president at the U.S. Chamber of Commerce. He now resides in relative freedom in the hills of Idaho.
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