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03-16-2011 at 9:53 AM
fallbride_...
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The GOP’s penny-wise, pound-foolish spending cuts

http://www.washingtonpost.com/blogs/ezra-klein/post/the-gops-pennywise-pound-foolish-spending-cuts/2011/03/10/ABZrJ9W_blog.html

 The GOP’s penny-wise, pound-foolish spending cuts

Let’s say that for every dollar you gave me, I gave you a crisp $10 bill in return. Good deal, right? Almost too good. But before you start to ask questions, I’ll remind you that this is my thought experiment. Perhaps I just love dollar bills. Or perhaps I just love you. At any rate, there are no strings attached, and you can take advantage of it more than once.

Now let’s say that you’re in debt and you need to get your finances in order. Do you start handing me more dollar bills? Or fewer?

If you’ve got any sense, you’ll give me more. Converting dollar bills into $10 bills is an excellent way to pay off your credit card. Except, it seems, if you’re a House Republican.

On March 1, House Republicans voted to cut $600 million from the budget of the Internal Revenue Service for the remainder of 2011, and they want even deeper cuts in 2012. Perhaps that doesn’t surprise you: Republicans don’t like spending — at least when they’re not in power — and they don’t like taxes. Why would they fund the IRS?

Well, as the Associated Press reported, “every dollar the Internal Revenue Service spends for audits, liens and seizing property from tax cheats brings in more than $10, a rate of return so good the Obama administration wants to boost the agency’s budget.” It’s an easy way to reduce the deficit: You don’t have to cut heating oil for the poor or Pell grants for students. You just have to make people pay what they owe.

But deficit reduction is not the GOP’s top priority. It’s a bit lower on the list, somewhere between “get Styrofoam cups back into Congress” — an actual push the Republicans took up to thumb their nose at Nancy Pelosi’s environmental policies — and make “Sesame Street” beg for money. In fact, if you listen to Speaker John Boehner, he’ll tell you himself. “The American people want us to focus on creating jobs and cutting spending,” he has said. And that comment wasn’t a one-off: “Our goal is to cut spending,” he said in another speech.

Cutting spending is related to, but in important ways different from, cutting deficits. For one, it rules out tax increases. That’s how Republicans can lobby to make the Bush tax cuts permanent, at a cost of $4 trillion over 10 years, and yet say they’re fulfilling their campaign promises by making much smaller cuts to non-defense discretionary spending. If you add up what Republicans have offered since the election, the policies they’ve endorsed would increase deficits but also decrease spending, at least in the short term. The IRS example shows that spending cuts don’t always reduce the deficit. But it’s worse even than that: Spending cuts don’t always reduce government spending.

There are three categories of spending in which cuts lead to more, rather than less, spending down the line, says Alice Rivlin, former director of both the Congressional Budget Office and the Office of Management and Budget. Inspection, enforcement and maintenance. The GOP is trying to cut all three.

Let’s begin with the costs of cutting inspection — for example, the Food and Drug Administration and the Agriculture Department. Together, the agencies are charged with ensuring that the nation’s food is safe. That’s increasingly crucial as our interconnected, industrialized system makes contaminated food a national crisis rather than a local problem. In recent years, we’ve seen massive recalls stemming from E. coli in spinach, salmonella in peanut butter and melamine in pet food. Each required the recall of thousands of tons of food and alerts to consumers who, in many cases, were screened or treated.

The problem was bad enough — and the people and pets sick enough— that Congress passed a bipartisan food-safety bill during last year’s lame-duck session. But now Republicans want big cuts in the agencies’ budgets, meaning fewer inspectors and a higher chance of outbreaks and food-borne illness. And those don’t come cheap. They show up in our health-care costs, disability insurance and tax revenue, not to mention in the pain and suffering and even death they cause.

Next up: enforcement. As any budget wonk will tell you, cracking down on “waste, fraud and abuse” won’t cure all our fiscal ills. But waste, fraud and abuse do happen, particularly in Medicare and Medicaid, where they can be costly. Republicans are looking for big reductions in the Department of Health and Human Services, meaning fewer agents to conduct due diligence on health-care transactions. Costs will go up, not down.

Then there’s deferred maintenance. In 2009, the Society of Civil Engineers gave America’s existing infrastructure a grade of D. They estimated that simply maintaining America’s existing stock would require up to $2.2 trillion in investment. But Republicans have been cool to Obama’s calls to increase infrastructure investment. Just “another tax-and-spend proposal,” Rep. John Mica (R-Fla.) said when the initiative was announced. But a dollar in maintenance delayed — or cut — isn’t a dollar saved. It’s a dollar that needs to be spent later. And waiting can be costly. It’s cheaper to strengthen a bridge that’s standing than repair one that’s fallen down.

And there are plenty of examples beyond that. Republicans have proposed massive cuts to the Securities and Exchange Commission, which would make another financial crisis that much likelier. They’ve proposed cuts to the National Oceanic and Atmospheric Administration, which conducts tsunami monitoring. In their zeal to cut spending, they’re also cutting the spending that’s there to prevent overspending. Just as you have to spend money to make money, you also have to spend money to save money — at least sometimes.

There are all sorts of reasons Republicans are being penny-wise and pound-foolish. Cutting $100 billion in spending in one year sounded good on the campaign trail but turned out to be tough in practice. Curtailing the IRS and cutting the Department of Health and Human Services — and, particularly, its ability to implement health-care reform — is a long-term ideological objective for Republicans.

Whatever the reason, the effect will be the same: a higher likelihood of pricey disasters, an easier time for fraudsters, and bigger price tags when we have to rebuild what we could’ve just repaired.

 


 
03-16-2011 at 11:15 AM
Sunny1inTu...
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P.S. add planned parenthood to the above list of penny-wise, pound-foolish attempted cuts:

Nationally, for every $1 spent on U.S. publicly funded family planning clinics, $4.02 is saved in averted Medicaid birth costs. Providing millions of poor and low-income women access to free or low-cost contraceptive care unequivocally results in substantial government savings: More than $4 is saved for each $1 spent.

[source: Frost JJ, Finer LB and Tapales A, The impact of publicly funded family planning clinic services on unintended pregnancies and government cost savings, Journal of Health Care for the Poor and Underserved, 2008, 19(3):778–796.]

cosigned,

sunny

 

 
03-16-2011 at 11:18 AM
yeah4me
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Michael Kinsley: You can't cut that

Whether it's an op-ed piece, a speech or an open letter to the president, there are certain familiar elements to the budget season's special pleadings.

By Michael Kinsley

March 15, 2011

Advertisement
A block from the Lincoln Memorial and right across the street from the State Department, a gorgeous new building is just being completed. Designed by the famous Canadian architect Moshe Safdie, it is the new headquarters of the United States Institute of Peace, established by Congress with the support of President Reagan in 1984. The institute was a sop to people who felt that Reagan was a dangerous warmonger, and who used to say things like, "We spend hundreds of billions every year on war, and yet we spend nothing on peace." On that logic, the institute was founded and by 2011 had 325 employees and an annual budget of $44 million. The federal budget passed by the Republican House last month adjusts that down to zero.

According to its website, the institute's mission is "to increase the nation's capacity to manage international conflict without violence." The institute consists of three "strategic centers" that include "four 'cross-cutting' components," all aimed at "playing a significant and successful role in preventing armed conflicts; mediating and resolving them when they occur; and promoting post-conflict stabilization and democratic transformation." Among the wide sweep of issues the institute tackles are "gender and peacebuilding," "health and peacebuilding" and "media, conflict and peacebuilding."

The Institute's Academy for International Conflict Management and Peacebuilding trains practitioners of conflict management and also runs a national peace essay contest for high school students. The Jennings Randolph Senior Fellowship program pays for eight to 12 "outstanding scholars, policymakers, journalists and other professionals" each year to "reflect on international peace and security challenges." And have I mentioned the Global Peacebuilding Center, another part of the Institute of Peace, which …well, which is working for peace too, I'm sure?

It certainly sounds like bull, doesn't it? An organization that was created in order to exist, and then went looking for a mission? On the New York Times op-ed page recently, Gen. Anthony Zinni, former commander in chief of the U.S. Central Command, argued passionately that it has found one. People from the Institute for Peace, he says, have been vital in preventing or resolving conflicts around the world and have shown great courage in doing so.

Maybe that's the case. But Zinni's article is a good example of a genre of literature we'll be seeing a lot of as the president and Congress grapple with the federal deficit (and each other): the special pleading. Whether it takes the form of an op-ed piece, a speech, a press release or an open letter to the president, there are certain familiar elements. Among them:

1. Expression of general support for deficit reduction. Reference to easy answers (there are none). Reference to burden (all must share).

2. Reference to babies and bathwater. Former should not be discarded with latter.

3. This program/agency/tax break is different. A bargain for the taxpayers. Pays for itself many times over. To eliminate or cut would be bad for children/our troops.

4. Cost is small (a) as percentage of total budget; (b) compared with budget of Pentagon; (c) compared with projected cost of healthcare.

5. Optional comparisons to cost of just one jet fighter or 3.7 minutes of war on terror.

6. Names of famous people who support this program or tax cut, especially Colin Powell. Other good names: Madeleine Albright, Natalie Portman, George H.W. Bush (not W), Warren Buffett.

7. This is not about fair, responsible, across-the-board budget cutting. This is about the other side irresponsibly pursuing its ideological agenda, penalizing programs it doesn't like.

This last complaint, usually heard from Democrats about the budget that has passed the Republican-controlled House, is an odd one. If you're looking for places to save money, why wouldn't you concentrate on programs you don't approve of? Equal across-the-board cuts, of good programs and bad programs alike, are the opposite of responsible budgeting.

Comparisons with Pentagon spending are especially inappropriate, because defense spending is different. The payoffs from most types of government spending are incremental. You can decide how much you want the government to spend on, say, subsidizing symphony orchestras. There is no exact right answer: The more you spend, the more you get. More symphony orchestras are a good thing, but there are other good things you want the government to do, or of course you might want the government to stay out of it and lower your taxes instead.

But in the case of defense spending, notions like how much we can afford, or what it would be nice to have, are inappropriate. The value is not gradual or incremental. It is absolutely essential to spend whatever is necessary to keep our nation safe, and a total waste to spend a nickel more. We debate, of course, the exact location of the point at which defense spending shifts from essential to worthless, and that depends on your views about America's purpose in the world. But comparing the cost of a jet fighter with the cost of, say, the National Endowment for the Arts is silly. Either we need the jet fighter or we don't. How much we should spend subsidizing the arts is a more subtle question.

It's also true but unpersuasive that the whole budget debate is focusing on the smallest part of federal spending — discretionary spending — and ignoring the big bucks, which are in inexorably rising healthcare costs. Given all past experience, a perfectly adequate reaction to the Obama administration's claims that healthcare reform will save the government money is, "I'll believe it when I see it." But that is no reason not to show more discipline on smaller matters. Every little bit helps.

Even if some government program is proved effective, that is not a good enough reason to protect it. Is it more effective than other uses of the money, including leaving it in taxpayers' pockets? We are still a rich country and can afford to finance a high school essay contest on peace, or any other luxury — if we're willing to pay for it.

7/21/2007 :)





Deductive reasoning isn't a conservative or liberal attribute. ~epphd 
03-16-2011 at 11:38 AM
**sunny**
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yeah4me:


Even if some government program is proved effective, that is not a good enough reason to protect it. Is it more effective than other uses of the money, including leaving it in taxpayers' pockets?

what is the point of this person's article? yes there are always arguments against a cut - someone has a vested interest in it. 

but how does leaving money in the taxpayers' pocket save the government money, per my U.S. family planning clinic funding example above? those are savings to Medicaid. Giving more $$ to taxpayers isn't going to save Medicaid any dollars. the people who need medicaid will still utilize it, but they will spend those extra dollars elsewhere.


Lilypie Third Birthday tickers 
03-16-2011 at 12:12 PM
Sisugal
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When you are in debt, close to bankruptcy -- you stop spending and throw everything possible at the debt while cutting back current spending. 

The IRS hiring increase is part of the HCR bill - to monitor compliance.

 

 
03-16-2011 at 12:40 PM
talltalltr...
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Sisugal:

When you are in debt, close to bankruptcy -- you stop spending and throw everything possible at the debt while cutting back current spending. 

The IRS hiring increase is part of the HCR bill - to monitor compliance.

 

but this is equivalent to not making your car payments in order to pay off your credit card debt when you need your car to get to work.

"I’ve got magic. I’ve got poetry in my fingertips. Most of the time (and this includes naps) I’m an F-18, bro. And I will destroy you in the air. I will deploy my ordinance to the ground." - inspirational words from Charlie Sheen 
03-16-2011 at 12:58 PM
ChangeOfPa...
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yeah4me:

Comparisons with Pentagon spending are especially inappropriate, because defense spending is different. The payoffs from most types of government spending are incremental. You can decide how much you want the government to spend on, say, subsidizing symphony orchestras. There is no exact right answer: The more you spend, the more you get. More symphony orchestras are a good thing, but there are other good things you want the government to do, or of course you might want the government to stay out of it and lower your taxes instead.

But in the case of defense spending, notions like how much we can afford, or what it would be nice to have, are inappropriate. The value is not gradual or incremental. It is absolutely essential to spend whatever is necessary to keep our nation safe, and a total waste to spend a nickel more. We debate, of course, the exact location of the point at which defense spending shifts from essential to worthless, and that depends on your views about America's purpose in the world. But comparing the cost of a jet fighter with the cost of, say, the National Endowment for the Arts is silly. Either we need the jet fighter or we don't. How much we should spend subsidizing the arts is a more subtle question.


What about the proposal to leave Defense alone but cut the State Dept. by 11%?  Do you honestly think that the war on terror is only being fought by the military?  This is not an apples to oranges comparison and yet it appears that the Repubs think that dilpomacy is highly overrated.  

This is very personal to me.  I have seen the pay freezes across the board for Feds, but the Repub leadership in Congress is actually proposing to CUT my husband's pay by 18%.  But beyond how I will personally be affected, I think it is really disingenuous to say that national security is sooo important, as long as the means to the end includes throwing multi-billion dollar contracts to our friends at Boeing, Northrop Grumman, and Lockheed Martin.  Meanwhile fully funding our diplomatic mission and recruiting and retaining an intelligent diplomatic workforce is apparently "wasteful" spending. 

 
03-16-2011 at 3:15 PM
fallbride_...
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but this is equivalent to not making your car payments in order to pay off your credit card debt when you need your car to get to work.

Yes!!!!!!!!!!!!!!!!!!!!!!!!!! Exactly!!!!!!!!!!!!!!

I actually knew someone who wasn't making house payments so she could pay enough on her credit card to use it again for that $100 or whatever would free up after a payment.  She lost the house and the ability to charge.  Brilliant.  

Cutting spending shouldn't be cutting spending in a dumb way.  I can't quit buying food in order to pay the other bills off because we need to actually keep living in the meantime.  We can't suspend basic needs while paying off the debt.  It also doesn't make sense to extend the tax cuts for the top incomes.  That is like starting to work part time instead of full time when in debt.  Revenue needs to come in so things can be paid.   It seems simple and obvious to me.  Would people take away food or medicine from the family in order to have a fancy dinner party?  Isn't that what we are doing when we give the oil companies subsidies?


 
03-16-2011 at 3:29 PM
livinglosi...
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talltalltrees:
[but this is equivalent to not making your car payments in order to pay off your credit card debt when you need your car to get to work.

But what are they to cut that won't anger some?  Pensions? MMMnope.  SS? MMMnope.  Defense?  Mmmnope.  PP?  Mmmmnope.  And on and on.


*Tef*
 
03-16-2011 at 3:34 PM
talltalltr...
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livinglosing:

talltalltrees:
[but this is equivalent to not making your car payments in order to pay off your credit card debt when you need your car to get to work.

But what are they to cut that won't anger some?  Pensions? MMMnope.  SS? MMMnope.  Defense?  Mmmnope.  PP?  Mmmmnope.  And on and on.

Everything you cut is going to anger someone. Anything you do, period, as a politician is going to anger someone. I mean, there was controversy over passing a house resolution honoring mothers, for chrissakes. But it has to be done. These cuts are like someone who has $75,000 in credit card debt saying, OK, I will give up my weekly starbucks but that is IT. I am NOT touching my weekly Bloomingdales budget and I absolutely refuse to get a second job.

"I’ve got magic. I’ve got poetry in my fingertips. Most of the time (and this includes naps) I’m an F-18, bro. And I will destroy you in the air. I will deploy my ordinance to the ground." - inspirational words from Charlie Sheen 
03-16-2011 at 3:37 PM
swimbikepu...
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livinglosing:

talltalltrees:
[but this is equivalent to not making your car payments in order to pay off your credit card debt when you need your car to get to work.

But what are they to cut that won't anger some?  Pensions? MMMnope.  SS? MMMnope.  Defense?  Mmmnope.  PP?  Mmmmnope.  And on and on.

My understanding is that they aren't even talking about cutting Defense or Medicare which are the two biggest drains on our economy.  They also could have refused to extend the Bush tax cuts for people making more than $250K and/or added additional tax brackets at, say, $1 mill and $10 mill (just picking round numbers).  Would that make some people mad?  Sure.  But 97% of people wouldn't have been affected by the tax cuts, even some of the defense cronies agree that defense could be cut without "endangering" American security and oldie can fuckings suck it because Medicare should be means tests. 

Also, the GOP came in on a wave promising jobs jobs jobs, which makes sense since we desperately need tax revenue.  But they've done nothing to actually create jobs.  Instead, they seem fixated on just gutting public programs, many of which actually save money in the long run (eg Planned Parenthood).

 

 
03-16-2011 at 8:14 PM
TeamC
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LMAO yeah4me-I drive past the "Institute of Peace" daily and MH and I always laugh while we're caught at the light.  What a ridiculous waste of space-literally-the building is like 1/3 vacuous open air.  I'm sure you could've fit the 100 or so people that actually work there in a basement of a federal building in the soon-to-be-vacated Crystal City.


The economics of stimulus is value destroying, because property is pried loose from owners, who put it to socially useful purposes, and given to government so it can pass it out to friends.
-Lew Rockwell Jr 
03-16-2011 at 9:52 PM
talltalltr...
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TeamC:

LMAO yeah4me-I drive past the "Institute of Peace" daily and MH and I always laugh while we're caught at the light.  What a ridiculous waste of space-literally-the building is like 1/3 vacuous open air.  I'm sure you could've fit the 100 or so people that actually work there in a basement of a federal building in the soon-to-be-vacated Crystal City.

Can you expand on this? Who is vacating CC? 


"I’ve got magic. I’ve got poetry in my fingertips. Most of the time (and this includes naps) I’m an F-18, bro. And I will destroy you in the air. I will deploy my ordinance to the ground." - inspirational words from Charlie Sheen 
03-16-2011 at 9:55 PM
livinglosi...
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talltalltrees:
livinglosing:

talltalltrees:
[but this is equivalent to not making your car payments in order to pay off your credit card debt when you need your car to get to work.

But what are they to cut that won't anger some?  Pensions? MMMnope.  SS? MMMnope.  Defense?  Mmmnope.  PP?  Mmmmnope.  And on and on.

Everything you cut is going to anger someone. Anything you do, period, as a politician is going to anger someone. I mean, there was controversy over passing a house resolution honoring mothers, for chrissakes. But it has to be done. These cuts are like someone who has $75,000 in credit card debt saying, OK, I will give up my weekly starbucks but that is IT. I am NOT touching my weekly Bloomingdales budget and I absolutely refuse to get a second job.
Bingo. No program should be left untouched. None. Zero. Bur,there is always a sob story and until on side grows a backbone, we will have this crap and fluff.

*Tef*
 
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