What Shift Right?

Liz Marlantes of the Christian Science Monitor joins other pundits in proclaiming "America's Big Shift Right" in politics and governance. "In Washington today, when it comes to the size of government, the debate isn't over whether to cut spending, but by how much," she writes.  That's true, but it's because the federal budget has doubled in just 10 years, with half the increase coming in the past three. Politics may be more conservative, but government is still getting bigger. Some of Marlantes's arguments are mystifying: "Instead of coming on the heels of a great liberal expansion of government, today's shift comes after three decades of the unraveling of elements of the social safety net." Really? The Congressional Budget Office reported in 2007 that three major "safety net" programs accounted for 45 percent of the federal budget. In this chart the red line represents "social safety net" programs: Marlantes quotes a distinguished historian on the same point:
"The New Deal programs have been weakened and destroyed over decades, and there are just many fewer elements in the safety net," says Alan Brinkley, a historian at Columbia University and author of "Liberalism and its Discontents."
But what is he talking about? Social Security is bigger than ever, and we've added Medicare, Medicaid, the Medicare prescription drug entitlement, and food stamps. Farm subsidies are still in business, in far different economic conditions from those that allegedly required the creation of price supports and other payments. Two years ago, in a review of two books on the rise of conservatism, Brian Doherty noted:
the right has shown an amazing ability to fool almost everyone, from average voters to academic historians like Schneider and Phillips-Fein, into believing that the conservative movement has won key victories and substantially achieved its most important goals.... And the free market? Under both Democrats and Republicans, the general direction of the U.S. government has been toward more spending, more taxing, and more federal control, even if Reagan did succeed in dramatically lowering the highest marginal tax rates. Otherwise smart observers such as Schneider and Phillips-Fein miss these facts, conflating the success of the Republican Party, as it comes and goes, with the success of conservative ideas. Phillips-Fein expresses this confusion about right-wing success most baldly, declaring out of nowhere, to buttress the significance of her topic, that “the New Deal has been turned back.” Except for court packing and the National Recovery Administration, every significant practice, and certainly every big idea, behind the New Deal has only gotten stronger in the last 60 years.
Marlantes seems to make the same mistake. She notes that the percentage of self-described conservatives has risen in the Gallup Poll. But considering how much the federal budget has increased, the increase in conservative sentiment is pretty modest. Shouldn't people who call themselves "moderates" when the federal budget is $2 trillion (about 2002) be "conservatives" now that it's approaching $4 trillion? And yet most of them don't. By the way, Marlantes does note that "generational changes are clearly pushing public opinion to the left when it comes to certain moral and cultural issues, most notably gay rights," a point that I've also made. A shift to the right? In politics, maybe. In the actual size of government, no.

Posted on August 9, 2011  Posted to Cato@Liberty

David Boaz discusses the debt deal on WJR’s The Frank Beckmann Show

Posted on August 8, 2011  Posted to Cato@Liberty

The Road to Czardom

Back in 2009 there was a lot of hysteria over the Obama administration's many "czars," and we at Cato tended to dismiss it; as Gene Healy said in the Washington Examiner, "the conservatives' current bout of czar mania elevates symbolism over substance.... Often, czars are mere figureheads, appointed to signal concern over the latest hot-button issue. " But just this week I've noticed a couple of examples of actual czardom -- the exercise of arbitrary and autocratic power -- from two of President Obama's Cabinet secretaries. Last week Sen. Harry Reid and House Speaker John Boehner made a deal under which the Senate would pass the House's bill to fund the Federal Aviation Administration through September and end the brief partial shutdown of the agency.  They agreed that Transportation Secretary Ray LaHood would waive the small-airport subsidy cuts. But where does a Cabinet secretary get the authority to waive legislation passed by Congress -- even if two members of Congress say it's OK with them? The administration can't spend money Congress hasn't appropriated, and it can't spend money in defiance of clear legislative language. LaHood is assuming the powers of a czar. And now Secretary of Education Arne Duncan has announced that he will unilaterally override the centerpiece requirement of the No Child Left Behind school accountability law, that 100 percent of students be proficient in math and reading by 2014. We've criticized that unrealistic requirement ourselves. But unrealistic or not, it's the law. According to the New York Times:
Mr. Duncan told reporters that he was acting because Congress had failed to rewrite the Bush-era law, which he called a “slow-motion train wreck.”
Again, I too think Congress should rewrite -- or repeal -- this law. But alas, it hasn't done so. Even the Times, often comfortable with the exercise of federal and executive power, notices that
The administration’s plan amounts to the most sweeping use of executive authority to rewrite federal education law since Washington expanded its involvement in education in the 1960s.
Which is a little misleading; in the 1960s Congress passed laws that extended federal power over local schools. The exercise of executive power is a different issue. Duncan's plan to waive bad provisions of a law is reminiscent of the more than 1,000 waivers from the provisions of the new health care law that Health and Human Services Secretary Kathleen Sebelius has already granted. One problem with such waivers, of course, is the suspicion that they will be granted to the politically connected or even to political supporters. Philip Hamburger of Columbia Law School says waivers raise "questions about whether we live under a government of laws. Congress can pass statutes that apply to some businesses and not others, but once a law has passed — and therefore is binding — how can the executive branch relieve some Americans of their obligation to obey it?" The rule of waivers is not the rule of law. Congress has far too often been supine in the face of executive power. In fact, it could be argued that Congress is as eager to avoid responsibility for lawmaking as presidents are to arrogate it. Duncan's argument that he was acting because Congress had not brings to mind former White House chief of staff Rahm Emanuel's statement a year ago:
“We are reviewing a list of presidential executive orders and directives to get the job done across a front of issues.”
"To get the job done" -- that is, to pass laws that the people's elected representatives have declined to pass.  That's not separation of powers, that's the road to czardom.

Posted on August 8, 2011  Posted to Cato@Liberty

Is Medicare Sustainable?

A letter in the Washington Post from Dale Everett of Ashburn, Va., makes a point about the sustainability of our entitlements programs:
At 80, I am a “poster boy” for what is wrong with Medicare and Social Security. I worked full time from 1950 until 1993, when I retired. I paid the maximum amount annually required by law. My payment from Social Security in 1993 was $1,170 per month, and it now exceeds $1,500. I paid $47,377 into the fund and have so far received more than $288,000 from it. As for Medicare I paid $14,350 into the fund from 1966 to 1993. I have been very healthy but had cancer several years ago and a craniotomy five years ago. The costs of those exceeded $1 million. Even minor surgery would far exceed what I paid to the fund. Please tell me how such a system can be sustained. Both programs need to be overhauled now. No one should believe that he has paid for and earned the right to such payments.

Posted on August 8, 2011  Posted to Cato@Liberty

Ron Paul in Iowa

People keep saying -- as George Will does in today's Washington Post -- that Ron Paul will do well in next weekend's Ames, Iowa straw poll because of his small but intense base of support. Will writes:
If Paul finishes first or second, the political community will shrug: There he goes again, the Babe Ruth of straw polls.
Well, maybe they will. But they shouldn't. Because in fact, Ron Paul finished fifth in the 2007 Iowa Straw Poll. So if he finishes first or second or even third this year, it will in fact signal a major increase in his ability to reach and turn out voters. That might be because he's making a far more intense effort to actually organize in Iowa than he did in 2007-8. Or it might be because, as Will did acknowledge, "events seem to be validating his message, which is that the country’s financial condition is awful." But it won't be something to shrug at. Of course, it also won't put him on a straight line to the nomination. In 2007 Mike Huckabee won the Iowa Straw Poll, and John McCain finished tenth.

Posted on August 7, 2011  Posted to Cato@Liberty

Stop the Hate

People in Washington are hurling harsh words at other Americans: words like terrorists, Satan, suicide bombers, Hezbollah, gone off the deep end, "recklessly diminished the power and reach of the United States." No doubt the president and the mainstream media have denounced this sort of divisive, extremist language, right? Yes, they have, many times. Except this week the divisive, extremist language has been directed at Tea Party members, the House Republican freshmen, libertarians, and other people determined to rein in federal spending, after deficits of $4 trillion in three years. The political and media establishments just can't believe that anybody would actually try to use a debt ceiling increase to get a commitment to fiscal responsibility in the future. Columnist Bart Hinkle has some thoughtful words on the subject:
If there is anything The New York Times hates, it is hate.... But as it turns out, there is one thing The New York Times hates more than hate itself: the tea-party wing of the GOP. "Tea Party Republicans have waged jihad on the American people," fumes columnist Joe Nocera in his Tuesday column, "Tea Party's War on America." Has the GOP "gone insane? … Why yes, it has," writes Krugman several days before, going on to denounce the party's "fanaticism" and lack of rationality: "It has gone off the deep end," he concludes. The editorial board agrees, terming the tea-partiers an "ultraorthodox" and "extremist" group who "are not paying close attention to reality," who are "willing to endanger the national interest" and who show no "signs of intelligent life." To Thomas Friedman, the tea-partiers are the "Hezbollah faction" of the GOP. According to Maureen Dowd, "The maniacal Tea Party freshmen are trying to burn down the House." They are "adamantine nihilists," and "political suicide bombers."... What could possibly explain all of this "vitriolic rhetoric" — this "widespread squall of fear, anger, and intolerance" — this "gale of anger"? Not the budget deal alone. While it's true that progressives did not get the tax hikes they wanted, it's also true that the federal budget will continue to grow, year over year. The deal gives President Obama an immediate hike in the debt ceiling, in return for mere promises of a reduction in the rate of spending growth later. Hmmmm. Perhaps Paul Krugman can explain what has elicited this drumbeat of hate and vituperation. [Shuffle of papers. . . .] Ah, yes — here's what Krugman wrote seven years ago, in "Feel the Hate": Why are [they] so angry? One reason is that they have nothing positive to run on. . . . But the vitriol also reflects the fact that many of [those] people . . . for all their flag-waving, hate America. They want a controlled, monolithic society; they fear and loathe our nation's freedom, diversity and complexity." Krugman was writing about the 2004 GOP convention. Funny how resonant those words sound today.
When the vice president of the United States calls his political opponents "terrorists," when the president of the United States calls them "hostage takers," when prominent media pundits call those same people extortionists and suicide bombers who are willing to destroy the country -- isn't that the sort of hateful language that we've often been told could lead to violence? As Hinkle notes, when one disturbed young man in Arizona went on a killing spree, the New York Times knew whom to blame:
"It is legitimate to hold Republicans and particularly their most virulent supporters in the media responsible for the gale of anger" that set the nation "on edge," the anti-hate paper said.
Isn't it time for a return to civility by those who so often lecture their opponents on civility?

Posted on August 3, 2011  Posted to Cato@Liberty

Debt Deals and the Default Myth

At the Encyclopedia Britannica Blog I take a look at the media drumbeat on "default":
The establishment media have been waving around the word “default” like a bloody shirt, trying desperately to pressure the Tea Party Republicans to give in and raise the debt ceiling already. Both theNew York Times and the Washington Post on Sunday had “default” in the first sentence on the front page. Saturday’s Post featured “default” in the first line on its homepage, in the first sentence on page 1, in the first economy/business story, and on page 1 of the Real Estate section. Friday’s CBS Evening News began, “Tonight, we are almost out of time. That was President Obama’s warning as Congress groped for a way to avoid a government default.” But there will be no default.
As a couple of graphs show, the problem is out-of-control spending and debt.
I talked to a journalist on Thursday who was very concerned about the “dysfunction” in Washington. So am I. But I told her that the real problem is not the dysfunctional process that’s getting all the headlines, but the dysfunctional substance of governance. Congress and the president will work out the debt ceiling issue, if not by Tuesday, then by next Tuesday. The real dysfunction is a federal budget that has doubled in 10 years, an annual deficit of some $1.5 trillion, and a national debt bursting through its statutory limit of $14.3 trillion and approaching 70 percent of GDP.
So will there be any budget cuts? All the deals being discussed in recent days
promise to cut spending some day—not this year, not next year, but swear to God some time in the next ten years. As the White Queen said to Alice, ”Jam to-morrow and jam yesterday—but never jam to-day.” Cuts tomorrow and cuts in the out-years—but never cuts today.
Read it all.  

Posted on August 1, 2011  Posted to Cato@Liberty

Debt Deals and the Default Myth

At the Encyclopedia Britannica Blog I take a look at the media drumbeat on "default":
The establishment media have been waving around the word “default” like a bloody shirt, trying desperately to pressure the Tea Party Republicans to give in and raise the debt ceiling already. Both theNew York Times and the Washington Post on Sunday had “default” in the first sentence on the front page. Saturday’s Post featured “default” in the first line on its homepage, in the first sentence on page 1, in the first economy/business story, and on page 1 of the Real Estate section. Friday’s CBS Evening News began, “Tonight, we are almost out of time. That was President Obama’s warning as Congress groped for a way to avoid a government default.” But there will be no default.
As a couple of graphs show, the problem is out-of-control spending and debt.
I talked to a journalist on Thursday who was very concerned about the “dysfunction” in Washington. So am I. But I told her that the real problem is not the dysfunctional process that’s getting all the headlines, but the dysfunctional substance of governance. Congress and the president will work out the debt ceiling issue, if not by Tuesday, then by next Tuesday. The real dysfunction is a federal budget that has doubled in 10 years, an annual deficit of some $1.5 trillion, and a national debt bursting through its statutory limit of $14.3 trillion and approaching 70 percent of GDP.
So will there be any budget cuts? All the deals being discussed in recent days
promise to cut spending some day—not this year, not next year, but swear to God some time in the next ten years. As the White Queen said to Alice, ”Jam to-morrow and jam yesterday—but never jam to-day.” Cuts tomorrow and cuts in the out-years—but never cuts today.
Read it all.  

Posted on August 1, 2011  Posted to Cato@Liberty

Dysfunction, Default, and the Debt Ceiling Crisis

David Boaz

The establishment media have been waving around the word "default" like a bloody shirt, trying desperately to pressure the Tea Party Republicans to give in and raise the debt ceiling already. Both the New York Times and the Washington Post on Sunday had "default" in the first sentence on the front page. Saturday's Post featured "default" in the first line on its homepage, in the first sentence on page 1, in the first economy/business story, and on page 1 of the Real Estate section. Friday's CBS Evening News began, "Tonight, we are almost out of time. That was President Obama's warning as Congress groped for a way to avoid a government default."

,

But there will be no default.

As I wrote this column, it seemed entirely possible that Congress and the president would fail to raise the U.S. debt ceiling by the quasi-deadline of Tuesday, August 2. If in fact they don't pass a bill by then — or by August 9 or so, when the real crunch might come — then the federal government would be forbidden to borrow any more money beyond the legal limit of $14.3 trillion. But it would still have enough money to pay its creditors as bonds come due. The government expects to take in about $172 billion in August, but it wants to spend $307 billion. You see the problem. If it can't borrow another $135 billion — to cover its bills for one month — then it will have to make cuts somewhere. The New York Times reports, "The Bipartisan Policy Center analysis notes that if the government were to choose to pay the interest on its debt, Social Security benefits, Medicaid and Medicare payments, defense contractors and unemployment benefits, it could not have enough left to pay for the salaries of federal workers and members of the military, Pell grants for college, highway construction or tax refunds, among other things. " But it will not default on the debt, as the Washington Post notes:

,

The Treasury has already decided to save enough cash to cover $29 billion in interest to bondholders, a bill that comes due Aug. 15, according to people familiar with the matter.

,

Which makes it unfortunate that the online headline for that article is "Treasury making hard choices in case of default." True, "Treasury making hard choices in case of failure to raise debt ceiling" would take up more space, but it would be more accurate.

I talked to a journalist on Thursday who was very concerned about the "dysfunction" in Washington. So am I. But I told her that the real problem is not the dysfunctional process that's getting all the headlines, but the dysfunctional substance of governance. Congress and the president will work out the debt ceiling issue, if not by Tuesday, then by next Tuesday. The real dysfunction is a federal budget that has doubled in 10 years, an annual deficit of some $1.5 trillion, and a national debt bursting through its statutory limit of $14.3 trillion and approaching 70 percent of GDP.

We've become so used to these unfathomable levels of deficits and debt — and to the once-rare concept of trillions of dollars — that we forget how new all this debt is. In 1981, after 190 years of federal spending, the national debt was "only" $1 trillion. Now, just 30 years later, it's headed for $15 trillion by the end of the year. So here's a graphic representation of dysfunction:

National Debt

Those are the kind of numbers that caused the Tea Party movement and the Republican victories of 2010. And many Tea Partiers this week have been reminding their representatives that they were sent to Washington to fix this problem. That's why, for once, there's a real argument over raising the debt ceiling. It's going to get raised, but many of the Republican freshmen are determined to set a new course for federal spending in the same bill that authorizes another $2.4 trillion or so of borrowing.

And where did all this debt come from? As the Tea Partiers know, it came from the rapid increase in federal spending over the past decade:

Media Name: 201104_blog_edwards141.jpg

Annual federal spending rose by a trillion dollars when Republicans controlled the government from 2001 to 2007. It has risen another trillion during the Bush-Obama response to the financial crisis. So spending every year is now twice what it was when Bill Clinton left office 10 years ago, and the national debt is almost three times as high. Republicans and Democrats alike should be able to find wasteful, extravagant, and unnecessary programs to cut back or eliminate. And yet many voters, especially Tea Partiers, know that both parties have been responsible. Most Republicans, including today's House leaders, voted for the No Child Left Behind Act, the Iraq war, the prescription drug entitlement, and the TARP bailout during the Bush years. That's why fiscal conservatives are looking very closely at the bills being proposed, most of which promise to cut spending some day — not this year, not next year, but swear to God some time in the next ten years. As the White Queen said to Alice, "Jam to-morrow and jam yesterday — but never jam to-day." Cuts tomorrow and cuts in the out-years — but never cuts today.

If the "dysfunctional" fight that has sent the establishment into hysterics finally results in some constraint on out-of-control spending, then it will have been well worth all the hand-wringing headlines. The problem is not a temporary mess on Capitol Hill and not a mythical default, it's spending, deficits, and debt.

Posted on August 1, 2011  Posted to Cato@Liberty

The Federal Government Is So Big, It Even Takes the Washington Post’s Breath Away

On the front page of today's Washington Post, above the fold, a news story begins:
If nothing else, the crisis over the debt ceiling is reminding the country of the astonishing reach of the federal spigot, encapsulated by a figure that President Obama tossed out recently: The government sends out “70 million checks” every month.
Reporter Alec MacGillis went on to note that the president underestimated:
The figures used by Obama and Geithner were, if anything, too low. They relied on Treasury Department figures from June that include Social Security (56 million checks that month), veterans benefits (4.5 million checks), and spending on non-defense contractors and vendors (1.8 million checks). But those numbers do not include reimbursements to Medicare providers and vendors (100 million claims in June), and electronic transfers to the 21 million households receiving food stamps. Nor do they include most spending by the Defense Department, which has a payroll of 6.4 million active and retired employees and, on average, pays nearly 1 million invoices and 660,000 travel expense claims per month.
However, we should remember that
The mind-boggling number challenges a common critique of the federal government as a creaky apparatus where tax dollars are lost in the bureaucratic cracks. From the vantage point of the 70 million or 80 million checks, the government is a finely tuned machine that brings in revenue and disperses it back out across the country.
Whew. For a minute there I was worried.  

Posted on July 27, 2011  Posted to Cato@Liberty

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