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Monday, July 5, 2010

The need for a real debate on spending

As we get closer to the November elections, the debate in the media seems to be between those who want the federal government to spend more and those who say we have spent enough. This truly misses the point. Between 2008 and 2010, federal spending has increased by 25%. This is a staggering amount. It is not the result of inflation which was less than 4% in total. It is not the result of a major increase in defense spending due to the wars. Rather, it is the result of out of control spending by the Democrats who had total control in Congress. To make matters worse, thise does not include any cost for Obamacare which will add hundreds of billions per year to the total. In other words, the true debate should be whether or not to CUT spending from current levels.

When Obama took office and the Obamacrats put through their initial budget, some policy wonks protested it on the basis that it would set a new baseline for the budget moving forward. It would seem that they are right. The current levels of spending will be the "accepted minimums unless the Republicans campaign clearly to reduce spending (that is spending not the growth of spending). The federal government could easily lay off 25,000 employees without noticing the difference. There are probably 1000 programs that are completely unnecessary except as payoffs to favored interest groups; all can be abolished. Pay levels, benefit levels, spending levels all can be cut. The problem is that making such cuts requires political will to take on the media which will scream about heartless cuts and their effect on the poor. (One wonders how anyone survived before the feds went on their spending spree.) The cuts will also require a clear public mandate which could possibly force Obama to accept them.

I do not believe that President Obama will go along with cutting the budget back to 2008 levels (which were already greatly elevated). Luckily, spending is the one area where Obama is not in control, Congress is. If, after an election fought on spending cuts, the GOP pushes through such cuts, Obama's only choice will be to veto the spending bills and shut down the government. The Republicans can pass continuing resolutions which allow spending at existing levels, but these can be modified to allow spending at 90% of existing levels. A separate resolution for defense could prevent any harm to our forces from the cuts. While this would force all departments to share in the cuts without ending any of the needless and wasteful programs, it would be clearly the result of Obama's refusal to recognize the public's desire for cuts.

This is not a minor issue. If the GOP does not have the courage to campaign on the basis of cuts, there will not be any. Absent such cuts, we will see the Obama crazy spending levels made permanent. That would be a true national disaster.

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