Archive for December, 2010

Earmark Myths and Realities

Earmark Myths and Realities

November 10, 2010 4:39 P.M.

By Sen. Tom Coburn

As Senate Republicans prepare to vote on an earmark moratorium, I would encourage my colleagues to consider four myths and four realities of the debate.

Myths of the earmark debate:

1. Eliminating earmarks does not actually save any money

This argument has serious logical inconsistencies. The fact is earmarks do spend real money. If they didn’t spend money, why defend them? Stopping an activity that spends money does result in less spending. It’s that simple. For instance, Congress spent $16.1 billion on pork in Fiscal Year 2010. If Congress does not do earmarks in 2011, we could save $16.1 billion. In no way is Congress locked into to shifting that $16.1 billion to other programs unless it wants to.

2. Earmarks represent a very tiny portion of the federal budget and eliminating them would do little to reduce the deficit

It’s true that earmarks themselves represent a tiny portion of the budget, but a small rudder can help steer a big ship, which is why I’ve long described earmarks as the gateway drug to spending addiction in Washington. No one can deny that earmarks like the Cornhusker Kickback have been used to push through extremely costly and onerous bills. Plus, senators know that as the number of earmarks has exploded so has overall spending. In the past decade, the size of government has doubled while Congress approved more than 90,000 earmarks.

Earmarks were rare until recently. In 1987, President Reagan vetoed a spending bill because it contained 121 earmarks. Eliminating earmarks will not balance the budget overnight, but it is an important step toward getting spending under control.

3. Earmarking is about whose discretion it is to make spending decisions. Do elected members of Congress decide how taxes are spent, or do unelected bureaucrats and Obama administration officials?

It’s true that this is a debate about discretion, but some in Congress are confused about discretion among whom. This is not a struggle between the executive branch and Congress but between the American people and Washington. Do the American people have the right to spend their own money and keep local decisions at the local level or does the federal government know best? Earmarks are a Washington-knows-best solution. An earmark ban would tell the American people that Congress gets it. After all, it’s their money, not ours.

An earmark moratorium would not result in Congress giving up one iota of its spending power. In any event, Republicans should be fighting over how to cut government spending, not how to divide it up.

4. The Constitution gives Congress the responsibility and authority to earmark

Nowhere does the Constitution give Congress the authority to do earmarks. The concept of earmarking appears nowhere in the enumerated powers or anywhere else in the Constitution. The so-called “constitutional” argument earmarks is from the same school of constitutional interpretation that led Elena Kagan to admit that Congress had the authority to tell the American people to eat their fruits and vegetables every day. That school, which says Congress can do whatever it wants, gave us an expansive Commerce Clause, Obamacare, and a widespread belief among members of Congress that the “power of the purse” is the power to pork.

Earmark defenders are fond of quoting Article I, Section 9 of the Constitution which says, “No money shall be drawn from the Treasury, but in consequence of appropriations made by law.” They also refer to James Madison’s power of the purse commentary in Federalist 58. Madison said the “power of the purse may, in fact, be the most complete and effectual weapon with which any constitution can arm the immediate representatives of the people.”

Yet, earmark proponents ignore the rest of the Constitution and our founders’ clear intent to limit the power of Congress. If the founders wanted Congress to earmark funds to specific recipients, micromanage American society, and ride roughshod over state and local government they would have given Congress that authority in the enumerated powers. They clearly did not.

Our founders anticipated earmark-style power grabs from Congress and spoke against such excess for the ages. James Madison, the father of the Constitution said, “With respect to the two words ‘general welfare,’ I have always regarded them as qualified by the detail of powers connected with them. To take them in a literal and unlimited sense would be a metamorphosis of the Constitution into a character which there is a host of proofs was not contemplated by its creators.”

Thomas Jefferson, in a letter to James Madison, spoke directly against federally-funded local projects. “[I]t will be the source of eternal scramble among the members, who can get the most money wasted in their State; and they will always get the most who are the meanest.” Jefferson understood that earmarks and coercion would go hand in hand.

Also, if earmarks were a noble constitutional tradition, how did we thrive for 200 years without an earmark favor factory in Congress?

Finally, for those worried about ceding constitutional authority to the executive branch, I would respectfully remind them that the president has zero authority to spend money outside of the authority Congress gives him. The way to hold the executive branch accountable is to spend less and conduct more aggressive oversight. Earmarks are a convoluted way for Congress to try to regain authority they have already ceded to the executive branch through bad legislation. The fact is there is nothing an earmark can do that can’t be done more equitably and openly through a competitive grant process.

Beyond these myths, I would encourage members to consider the following realities.

1. Earmarks are a major distraction

Again, earmarks not only do nothing to hold the executive branch accountable — by out-porking the president — but take Congress’ focus away from the massive amount of waste and inefficiency within federal agencies. In typical years, the number of earmark requests outnumbers oversight hearings held by the Appropriations Committee by a factor of 1,000 to 1. Instead of processing tens of thousands of earmark requests the Senate should increase the number of oversight hearings from a few dozen to hundreds. The amount of time and attention that is devoted to the earmark chase is a scandal waiting to be exposed.

2. This debate is over among the American people and the House GOP

If any policy mandate can be derived from the election it is to spend less money. Eliminating earmarks is the first step on that path. The House GOP has accepted that mandate. The Senate GOP now has to decide whether to ignore not only the American people but their colleagues in the House. The last thing Senate Republicans should be doing is legislative gymnastics to get around the House GOP earmark ban.

3. Earmarking is bad policy

In recent years the conventional wisdom that earmarks create jobs has been turned on its head. The Obama administration’s stimulus bill itself, which is arguably a collection of earmarks approved by Congress, proves this point. Neither Obama’s stimulus nor Republican stimulus — GOP earmarks — is very effective at creating jobs.

Harvard University conducted an extensive study this year of how earmarks impact states. The researchers expected to find that earmarks drive economic growth but found the opposite.

“It was an enormous surprise, at least to us, to learn that the average firm in the chairman’s state did not benefit at all from the unanticipated increase in spending,” said Joshua Coval, one of the study’s authors. The study found that as earmarks increase capital investment and expenditures by private businesses decrease, by 15 percent specifically. In other words, federal pork crowds out private investment and slows job growth. Earmarks are an odd GOP infatuation with failed Keynesian economics that hurts local economies.

Earmarks also crowd out funding for higher-priority items. Transportation earmarks are a good example. Pork projects like the Bridge to Nowhere and bike paths divert funds from higher priority projects according to a 2007 Department of Transportation inspector general report. Thousands of bridges continue to be in disrepair across America in part because Congress has taken its eye off the ball and indulged in parochial spending.

4. Earmarking is bad politics

If the Senate GOP wants to send a signal that they don’t get it and are not listening they can reject an earmark moratorium. For Republicans, earmarks are the ultimate mixed message. We’ll never be trusted to be the party of less spending while we’re rationalizing more spending through earmarks. The long process of restoring fiscal sanity in Washington begins with saying no to pork.

What Spending to Cut

What Spending to Cut

If the 2010 election produced any conservative mandates, they are to create jobs and to rein in soaring spending and deficits. Republicans should begin implementing this agenda by extending the 2001 and 2003 tax cuts and paring back a government that now spends a staggering $30,000 per household annually.

Despite liberal claims to the contrary, rising spending — not declining revenues — drives America’s long-term deficits. Once the economy recovers, revenues are projected to return to their historical average of 18 percent of the economy — even if all tax cuts are extended. Federal spending — rising from its historical average of 20 percent of the economy to a projected 26 percent by the end of the decade — is the moving variable.

Nearly all of this new spending will come from Social Security, Medicare, Medicaid, and interest on the debt. Combined and adjusted for inflation, these annual expenditures will rise from $1.6 trillion to $3 trillion over this decade. Therefore, budget reform must include putting Social Security and Medicare on a fixed long-term budget with a capped growth rate.

Yet major entitlement reforms would be phased in slowly. In the meantime, Congress should enact government-wide spending caps that gradually return spending to 20 percent or less of GDP.

After a $727 billion spending increase since 2007, there is no shortage of programs to cut to meet that 20 percent target. The 112th Congress should target programs based on their economic impact, their cost, and the feasibility of reforming them. It should build credibility with the public by including cuts in the federal government’s spending on itself, unpopular earmarks, and even traditional conservative spending programs. Conservatives could begin with the following twelve projects:

One. Freeze and reform federal pay. Before Washington asks Americans to tighten their belts, it must tighten its own. While some federal employees are undercompensated, the average federal employee receives 30 to 40 percent more in total compensation than the equivalent private-sector worker; all this extra pay adds up to $47 billion. Lawmakers should freeze federal pay until it can be fundamentally reformed.

Similarly, Congress should cut its own budget and salaries to 2008 levels, pare back the surging federal travel budget (not every federal conference has to be in Maui), suspend acquisition of federal office space, competitively outsource more federal work, and require federal employees to fly coach domestically. 

Two. Ban earmarks. These symbols of waste and corruption cannot be salvaged. Taxpayers will never accept Social Security and Medicare reforms if they believe the savings will go toward bridges to nowhere. Beyond costing $20 billion annually — a non-trivial sum, even if it’s just under 1 percent of the federal budget — earmarks encourage lawmakers to vote for budget-busting bills and divert  their attention from higher priorities.

Republicans should not leave unelected Washington bureaucrats to distribute federal dollars to fund local projects in place of earmarks. Rather, grants can be distributed by formula to state and local governments, which are in a much better position than Washington, D.C., to decide where to put their streetlights.

Three. Ban corporate welfare. Even before bailing out Wall Street, Washington spent more on corporate welfare than on homeland security. The public will not trust conservatives to reform middle- and lower-income entitlement programs unless they are also willing to stop granting special favors to their friends in business. A free market means that businesses rise and fall on their own, without politicians’ picking winners and losers.

Most corporate-welfare spending is buried in obscure projects with harmless-sounding names like the “Technology Innovation Program.” Rather than terminate each program individually, Congress could ban subsidies for (but not contracts with) businesses that have gross revenues above a certain level.

Four. Reform farm subsidies. The $25 billion farm-subsidy system is a case study in economic illiteracy. It subsidizes growers of five crops (wheat, cotton, corn, soybeans, and rice) even if they’re millionaires while bypassing producers of nearly all other farm products even if their income is meager. It simultaneously pays some farmers to grow more of their crops (through subsidies) and other farmers to grow less (through a conservation program). Overall, subsidies harm small family farms, taxpayers, consumers, the environment (by encouraging over-planting to maximize subsidies), trade (by inviting retaliation against farm protectionism), impoverished nations (by undercutting their farmers), and even our health (by subsidizing corn and soy, which are often used to create sugary and fatty foods, rather than healthier fruits and vegetables). About how many programs can we say that?

The defeat of more than half the members of the House Agriculture Committee presents an opportunity for reform. The policy challenge is not farmer poverty (the average farmer significantly outearns the average worker) but rather income instability (farmers can earn very little in bad years). Replacing farm subsidies with improved crop insurance and new Farmer Savings Accounts (in which farmers can save tax-free in good years, and from which they can withdraw tax-free in bad years) will help family farmers smooth out the fluctuations in their income at minimum taxpayer cost.

Five. Recall unspent stimulus funds. The economic failure of the stimulus has become a political disaster for Democrats. Most stimulus dollars have been spent or obligated, yet perhaps $60 billion could still be recalled in areas including energy, transportation, and state aid. If the president vetoes an outright recall of unspent stimulus funds, Congress could instead use them to offset any new spending the White House requests. 

Six. Vote to repeal Obamacare. The president’s inevitable veto should not dissuade conservatives from passing legislation to repeal the recent health-care law. Such a vote would leave no doubt as to where conservatives stand, and would force Democrats to go on the record before the 2012 election.

Conservatives can also attack Obamacare piece by piece, by refusing to fund discretionary bills to implement the law and by offering legislation to block or delay its implementation.

Seven. Repeal CLASS. Buried in Obamacare is a massive new long-term-care program known as Community Living Assistance Services and Support (CLASS). Like Social Security, CLASS will run initial surpluses (a $70 billion surplus in the first decade will be raided to cover up Obamacare’s deficits) before falling into deep deficit afterward. 

The Congressional Budget Office, the Medicare chief actuary, and the American Academy of Actuaries have all acknowledged that CLASS is financially unsustainable. Even Senate Budget Committee chairman Kent Conrad (D., N.D.) called CLASS “a Ponzi scheme of the first order, the kind of thing that Bernie Madoff would have been proud of.” (He then proceeded to vote for Obamacare.) 

If CLASS is allowed to begin enrolling participants in the next couple of years, it will almost surely collapse within two decades. The resulting taxpayer bailouts could cost trillions.

Eight. Return highway spending to states. Washington collects the 18.4 cent–per–gallon gas tax, subtracts a hefty administrative fee, and then returns the funds to state governments with numerous strings attached. These strings include thousands of earmarks, as well as requirements to divert highway dollars into bike paths, museums, and prevailing-wage regulations. There is no reason for Washington to decide where to build a road in Appleton, Wis.

Congress should eliminate the middleman and allow states to opt out of the federal-highway program. In return for agreeing to maintain their interstate highways, these states could collect and retain the federal gas tax themselves. 

Nine. Defund high-speed-rail projects. The Obama administration has provided $8 billion to states for high-speed-rail projects and promised more funding later. Yet high-speed rail is extraordinarily expensive (California received $2.3 billion for a new project that some estimate will cost $81 billion), and cash-strapped states will certainly seek more federal funding. Moreover, these projects are estimated to reduce the average travel time by as little as 30 minutes compared with driving, and to lower auto ridership by as little as 1 percent. Congress should follow the voters’ backlash against these projects by cancelling their funding.

 

Ten. Trim Pell Grants. After doubling Pell Grant spending from $16 billion to $32 billion since 2008, President Obama proposes to give it entitlement status and spend $52 billion by 2020. Fiscal reality demands that lawmakers instead return funding to 2008 levels.

Concerns about whether students will be able to afford college are unfounded. Over the past three decades, student-aid increases have been one of the causes — not the result — of tuition increases. The more aid students receive, the higher colleges raise tuition to capture that aid. 

Higher student-loan limits for low-income families are a fairer way of guaranteeing college access. There is no justification for taxing waitresses and welders so that future college graduates — who will outearn them by $1 million over their lifetime — won’t be burdened by the typical $24,000 student loan.

Eleven. Reduce aid to states. Over the past decade, federal aid to state and local governments has surged, rising 129 percent faster than inflation. Endless bailouts have made Washington one of the top sources of state revenue. These bailouts allow profligate states to delay their inevitable belt-tightening and instead be subsidized by the taxpayers of responsible states. 

There is no compelling reason for Washington to finance state-level education, justice, and economic-development expenditures — especially through failed programs such as COPS and firefighter grants. State and local governments should be empowered to address local problems with local solutions — financed and held accountable by local voters.

Twelve. Reduce waste. Although the budget cannot be balanced by cutting waste alone, Congress should not ignore this low-hanging fruit. For instance, Washington runs 342 overlapping economic-development programs, lost $98 billion last year to program payment errors, and recently spent $33 million enhancing the Kennedy family image through the Edward M. Kennedy Institute for the Senate, the John F. Kennedy Presidential Library and Museum, and the Rose Kennedy Greenway.

Conservatives should harbor no illusions that cutting spending is easy. However, by carefully selecting its targets, Congress could save as much as $3 trillion over the next decade and lay the groundwork for Social Security, Medicare, and Medicaid reform.

DREAM On amnesty-for-illegals

December 1, 2010 12:00 P.M.

DREAM On
The amnesty-for-illegals crowd has found some sympathetic poster children.

Harry Reid and Nancy Pelosi have pledged a vote as early as this week on the DREAM Act (Development, Relief and Education for Alien Minors), a bill that would legalize illegal aliens who arrived here before the age of 16 and who comply with certain educational or military-service requirements.

The core principle behind this amnesty proposal is that it is aimed at those who have grown up here and are, psychologically and emotionally, Americans. In the words of America’s Voice, a hard-left open-borders group, the beneficiaries of the measure are “patriotic young Americans in all but paperwork.”

There’s no doubt that this is the most sympathetic group of illegal immigrants. That is precisely why DREAM has been dangled as bait for the more general amnesty proposals described as “comprehensive immigration reform,” with amnesty advocates brandishing the situation of these young people as justification for a broader amnesty. (Though no one seems to have stopped to ask: If such a comprehensive bill would provide amnesty for all illegals, then why would we need DREAM?)

Nonetheless, now that the amnesty crowd has belatedly decided to move ahead on DREAM as a standalone measure, many in the public and Congress are open to the idea of addressing the situation of such young people. But the DREAM Act, in every one of its iterations over the years, has four fatal flaws.

1. The act is billed as legalizing those brought as infants or toddlers, and yet it covers people brought here up to age 16. The examples used by advocates are nearly always people who were brought here very young. The student-body president at Fresno State University, Pedro Ramirez — who was “coincidentally” revealed to be an illegal alien just as the DREAM Act lame-duck effort got under way — came here at age three. Harvard student Eric Balderas was brought here at age four. Yves Gomes was brought here at 14 months, Juan Gomez at two years, Marie Gonzalez at five, Dan-el Padilla at four, and so on.

So why set the age cutoff at 16? If the point is to provide amnesty to those whose identity was formed here, then you’d need a much lower age cutoff. I have a 15-year-old, and if I took him to live illegally in Mexico (and living illegally is a lot harder to do there than here), he would always remain, psychologically, an American, because his identity is already formed. The Roman Catholic Church and English common law set the age of reason at seven. That, combined with a requirement of at least ten years’ continuous residence here, seems like a much more defensible place to draw the line. Unless, of course, you’re just using those who came as young children to bootstrap a larger amnesty.

2. Next, all amnesties have at least three harmful consequences, and the DREAM Act ignores all three. The first of these is massive fraud. Perhaps one-fourth of those legalized under the 1986 Immigration Reform and Control Act received amnesty fraudulently, including Mahmud Abouhalima, a leader of the first World Trade Center attack. The fraud in that first big amnesty program was so pervasive as to be almost comical, with people claiming work histories here that included picking watermelons from trees and digging cherries out of the ground.

And yet what does the DREAM Act say about fraud? As Sen. Jeff Sessions (R., Ala.) points out in “Ten Things You Need To Know about S-3827, the DREAM Act,” the measure “prohibits using any of the information contained in the amnesty application (name, address, length of illegal presence that the alien admits to, etc.) to initiate a removal proceeding or investigate or prosecute fraud in the application process.” This is like playing a slot machine without having to put any money in — any illegal alien can apply, and if he wins, great, but if he loses, he can’t be prosecuted even if he lied through his teeth about everything. No amnesty proposal can be taken seriously unless applicants are made to understand, right up front, that any lies, no matter how trivial, will result in arrest and imprisonment.

3. Another problem with DREAM, which all amnesties share, is that it will attract new illegal immigration. Prospective illegal immigrants, considering their options, are more likely to opt to come if they see that their predecessors eventually hit the jackpot. In 1986, we had an estimated 5 million illegals, 3 million of whom were legalized. We now have more than twice as many as before the last amnesty, and they’ve been promised repeatedly that if they hold out a little longer they’ll be able to stay legally. Any new amnesty, even if only for those brought here as children, will attract further illegal immigration.

There’s really no way to prevent this, but to minimize it, you need stringent enforcement measures. This was the logic of the 1986 law and the recent “comprehensive immigration reform” proposals. The critique of such “grand bargains” has been that the illegals get their amnesty but the promised enforcement never materializes — and that critique remains valid. But if the sponsors of DREAM were serious about addressing the plight of people brought here as infants and toddlers, they would include muscular enforcement measures as proof of their bona fides. These would include mandatory use of E-Verify for all new hires, explicit authorization of state and local governments to enforce civil immigration law, and full implementation of an exit-tracking system for all foreign visitors, for starters. And the legal status of all the amnesty beneficiaries would remain provisional until the enforcement measures were up and running and passed judicial muster. Even these might not be sufficient to turn back a new wave of illegal immigration sparked by the amnesty, but the lack of such measures speaks volumes about the real intentions of the DREAM Act’s sponsors.

4. Finally, all amnesties reward illegal immigrants — in this case, both those brought here as children and the adults who subjected them to this limbo. Any serious proposal to legalize young people brought here as infants or toddlers would need to prevent the possibility that their parents and other adults responsible for bringing them here illegally would ever receive any benefit from the amnesty, namely, future sponsorship as legal immigrants. This could be done in two ways: Either the amnesty recipients would not be put on a “path to citizenship” at all, but instead be given a time-limited work visa, indefinitely renewable so long as they stay out of trouble. This would mean they could not petition for any relatives to immigrate in the future. Alternatively, the amnesty beneficiaries could receive green cards and eventual citizenship, but we would abolish all the legal-immigration categories for family members other than spouses and minor children of U.S. citizens. Either way, the adults who knew what they were doing would never be rewarded.

A DREAM Act 2.0 that addressed these problems — that prosecuted fraud, implemented enforcement, prevented downstream legal immigration, and focused much more narrowly on those who came very young — would possibly be something that even I, were I a congressman, might be able to vote for. But the lack of these elements is clear proof that the amnesty crowd isn’t interested in fixing the specific problem of a sympathetic but small group of people; rather, these young people are simply poster children who have been used for years to try to justify a general amnesty for all illegal aliens. And when the DREAM Act fails, as it will, Pedro Ramirez and his fellows will need to ask the pro-amnesty politicians and lobbying groups why they were sacrificed on the altar of “comprehensive immigration reform.”

Obama’s stimulus program cost more than the Iraq war

Little-known fact: Obama’s failed stimulus program cost more than the Iraq war

By: Mark Tapscott
Editorial Page Editor
08/23/10 11:32 AM EDT

Expect to hear a lot about how much the Iraq war cost in the days ahead from Democrats worried about voter wrath against their unprecedented spending excesses.

The meme is simple: The economy is in a shambles because of Bush’s economic policies and his war in Iraq. As American Thinker’s Randall Hoven points out, that’s the message being peddled by lefties as diverse as former Clinton political strategist James Carville, economist Joseph Stiglitz, and The Nation’s Washington editor, Christopher Hayes.

The key point in the mantra is an alleged $3 trillion cost for the war. Well, it was expensive to be sure, in both blood and treasure, but, as Hoven notes, the CBO puts the total cost at $709 billion. To put that figure in the proper context of overall spending since the war began in 2003, Hoven provides this handy CBO chart showing the portion of the annual deficit attributable to the conflict:

But there is much more to be said of this data and Hoven does an admirable job of summarizing the highlights of such an analysis:

* Obama’s stimulus, passed in his first month in office, will cost more than the entire Iraq War — more than $100 billion (15%) more.

* Just the first two years of Obama’s stimulus cost more than the entire cost of the Iraq War under President Bush, or six years of that war.

* Iraq War spending accounted for just 3.2% of all federal spending while it lasted.

* Iraq War spending was not even one quarter of what we spent on Medicare in the same time frame.

* Iraq War spending was not even 15% of the total deficit spending in that time frame. The cumulative deficit, 2003-2010, would have been four-point-something trillion dollars with or without the Iraq War.

* The Iraq War accounts for less than 8% of the federal debt held by the public at the end of 2010 ($9.031 trillion).

* During Bush’s Iraq years, 2003-2008, the federal government spent more on education that it did on the Iraq War. (State and local governments spent about ten times more.)

Just some handy facts to recall during coming weeks as Obama and his congressional Democratic buddies get more desperate to put the blame for their spending policies on Bush and the war in Iraq. For more from Hoven, go here.

Read more at the Washington Examiner: http://www.washingtonexaminer.com/opinion/blogs/beltway-confidential/Little-known-fact-Obamas-failed-stimulus-program-cost-more-than-the-Iraq-war-101302919.html#ixzz0xYRIWnaD