Below The Beltway

In today’s Washington Post, Robert J. Samuelson points out that the GOP is pretending if it thinks that its recent efforts in Congress will have any sizeable impact on out-of-control spending.

What have Republicans actually done? Last week the Senate Budget Committee endorsed spending “cuts” of $39 billion. That covers five years when total federal spending is projected at $13.8 trillion. So the “cuts” amount to a mere 0.3 percent — one-third of one percent — of projected spending.

A drop in the bucket, not even a drop in the bucket, and, as Samuelson points out, even this isn’t what it is claimed to be.

Many advertised “cuts” aren’t cuts at all. In weird budget accounting, they’re “offsetting receipts” — extra income that offsets spending. There’s $10 billion from government sales of radio frequency spectrum to telecommunications firms. There’s $5.4 billion from higher insurance premiums to the Pension Benefit Guaranty Corp. And there’s $2.5 billion in royalties from opening the Arctic National Wildlife Refuge to oil and natural gas drilling. Whatever their merits or demerits, these proposals aren’t spending cuts.

In other words, accounting scams. And, to go slightly off topic, radio spectrum sales are one of the biggest scams the government has ever come up with. The fictitious notion that the electromagnetic spectrum is a “public good” that is owned by everyone is fundamentally absurd. When property is owned by “everyone” it is owned by nobody. The technology that is needed to exploit the spectrum is entirely the result of individual effort, so there is no reason why the government should regulate how it is used.

Its not just the GOP that is the home of fiscal phoney-ness. As Samuelson points out, the Democrats solution to the budget crisis, increased taxes on the rich, wouldn’t solve anything either.

When Bush became president, the two top income tax rates were 39.6 percent and 36 percent; now they’re 35 percent and 33 percent. Okay, let’s restore them to their pre-Bush levels. From now until 2010, the extra revenue would average slightly more than $30 billion a year, the Tax Policy Center estimates. That won’t cover the Medicare drug benefit, let alone projected deficits. By current CBO estimates, these will average $320 billion annually between now and 2010. Sure, you could squeeze the rich for a few more billion by repealing some other tax cuts, but the central point would remain: There’s a basic mismatch between the existing taxes and existing spending commitments.

What should we do instead ? Samuelson has his own ideas, some of which make sense.

First, you’d repeal the Medicare drug benefit, scheduled to take effect in 2006.

Good idea. This would save about $ 300 billion off the top.

Second, you’d repeal a tax cut scheduled for 2006 that would benefit mainly people in the top brackets (taxable incomes exceeding $182,800 and $326,450 for couples in 2005).

Not such a good idea. This would only “save” about $ 30 billion, and doesn’t account for the impact that reduced taxes would have on economic growth, which in turn would increase tax revenues.

Third, you’d eliminate all “earmarks” in the recent highway bill.

Excellent idea. And I’d add a proposal that Ronald Reagan asked for every year he was President — a Constitutional Amendment providing for a line item veto.

The odds of this happening anytime soon ? Pretty much nil. As Samuelson, points out, our leaders in Washington have other motives:

For most politicians, the real problem is to appear principled even when they’re not. If that’s not phony, what is?

Linked with Don Surber and Stop the ACLU and Cao’s Blog and The Political Teen and Obligatory Anecdotes and Basil’s Blog