Posts Tagged ‘ Budget ’

Evening Fix

Friday, February 18th, 2011
Lee Drutman



Lee Drutman is a senior fellow and the managing editor for the Progressive Policy Institute.

by Lee Drutman

Our top five reads of the day:

  • Eric Jaffe highlights the importance of declining infrastructure in the McKinsey Global Institute on the U.S. economy:  “Drawing figures from the American Society of Civil Engineers, which recently issued U.S. infrastructure a D grade, the report estimates that the country needs to invest more than $2 trillion over the next five years just to catch up. Considering the partisan fury that followed Obama’s six-year, $556 billion transportation budget plan, such a goal is politically impossible.”
  • Emilia Istrate has some ideas on how to expand our exports: “One of the defining characteristics of the Next Economy is the essential role played by exports. If the United States is to fully benefit from the transformational changes taking place in world markets, we must re-orient our economy and the policies that shape it towards increasing our exports.”
  • Joseph S. Nye Jr. puzzles through what the Twitter/Facebook revolution in Egypt means for the future of power: “Yet, while governments and large states still have larger resources, thanks to the new power diffusion, the stage on which these entities play is more crowded with information-empowered private actors. How will this all play out? Who will win, and who will lose? As recent events in Egypt and elsewhere have shown, we are only just beginning to comprehend the effects of the information revolution on power in this century.”
  • Andrew J. Rotherham debunks myths about school vouchers: “What does the renewed push for vouchers mean for our education system? That is of course a matter of debate. Proponents and opponents make a lot of overblown claims about what vouchers will or won’t do. But with a number of programs already in force, we actually know quite a bit about how they work.
  • Lori Montgomery reports on the bipartisan “Gang of Six” trying to work out a budget deal: “The group hopes to advance the commission’s recommendations, which would reduce deficits by $4 trillion over the next decade. Doing so would require lawmakers to embrace some politically perilous policies, however, including raising the retirement age to 69, charging wealthy seniors more for Medicare and ending some cherished but expensive tax breaks.”

The Coming Fight Over Foreign Assistance

Wednesday, February 16th, 2011
Jim Arkedis



Jim Arkedis is the director of PPI's National Security Project.

by Jim Arkedis

Above is my quick and dirty comparison of the coming fight over foreign assistance. In green is the amount already spent in 2010 on each of the discreet line items (I’ve chosen these four areas because they were directly comparable between the various proposed appropriations).

Here’s how to read the graph: The actual amount spent in 2010 by the USG on each line item is in green. In red is the amount Republicans want to cut back to for the remainder of FY2011, expiring on 30 September. And in blue is what the White House would like to spend in FY2012’s budget proposal.

Now, I understand that there’s a conversation to be had about fixing how we spend foreign assistance and what we should receive back from it. But this is a more basic philosophical disagreement about whether or not America should be a world leader, or whether we should disengage from the rest of the world.  After all, at its best, foreign assistance buys soft power, something that has been in relatively short supply of late.

In light of that, it’s worth keeping in mind this quote from Joe Nye’s new book, The Future Power:

In general, the United States has not worked out an integrated plan for combining hard and soft power….Many official instruments of soft power – public diplomacy, broadcasting, exchange programs, development assistance, disaster relief, military-to-military contracts – are scattered around the government, and there is no overarching strategy or budget that even tries to integrate them with hard power into an overarching smart power strategy. The United States spends about five hundred times more on the military than it does on broadcasting and exchanges.

Obama’s Minimalist Budget

Monday, February 14th, 2011
Will Marshall



Will Marshall is the president of the Progressive Policy Institute.

by Will Marshall

President Obama’s new budget is a highly tactical exercise in fiscal minimalism. It proposes just enough spending cuts to be plausible, while putting off the critical work of tax and entitlement reform. Its unspoken premise seems to be: Given the ax-wielding frenzy that grips House Republicans, the best the White House can do now is to frame the fiscal debate on terms favorable to progressives.

The President’s $3.7 trillion budget would trim federal deficits by just over $1 trillion over the next decade. To the chagrin of liberals, the budget proposes to reach this total through a formula of two-thirds spending cuts, one-third tax cuts, rather than a 50-50 split. Also, it limits military spending growth without cutting specific programs. Meanwhile, the blueprint freezes discretionary spending for five years, and cuts over 150 programs, for $25 billion in budget savings next year. In short, the toughest discipline falls on domestic spending, so expect howls of betrayal from the left.

For all that, however, the Obama proposal would still leave us with deficits over 3 percent of GDP in 2020, while doing nothing to brake the runaway growth of costs for Medicare, Medicaid or Social Security, which account for 40 percent of the budget. These costs, propelled by soaring health care prices and demographics, and growing automatically each year, are what drive our nation’s long-term debt crisis.

The new budget does stabilize the national debt, but at a level – 77 percent of GDP – that most economists believe is well above what’s good for our fiscal health. It’s getting panned by deficit hawks. “This budget fails to meet the Administration’s own fiscal target, it fails to tackle the largest problem areas of the budget, and it fails to bring the debt down to an acceptable level,” said Maya MacGuineas of the Committee for a Responsible Federal Budget.

Over the weekend, GOP leaders lambasted Obama for not embracing the much more robust and comprehensive recommendations of his own Fiscal Commission. Its plan would cut deficits by $4 trillion by 2020, make big reductions in tax expenditures, and trim future Social Security and Medicare benefits for the well-off. Bear in mind that, even as they criticize the President’s fiscal pusillanimity, House Republicans have rejected the Fiscal Commission blueprint, oppose tax increases of any kind, and are engaged in an Alphonse-and-Gaston routine with the White House over who should go first on entitlement reform.

Nonetheless, the Commission’s Democratic co-chairman, Erskine Bowles, also expressed disappointment that the President hasn’t used its work as the point of departure for a serious push to restore fiscal stability in Washington. He accurately called the President’s proposal “nowhere near where they will have to go to resolve our fiscal nightmare.”

The administration apparently is calculating that its modest deficit-reduction proposal has several tactical advantages. First, it may better reflect the public’s actual appetite for fiscal restraint. The same polls that show strong public support for reining in public deficits also find majorities opposed to major program cuts. Second, and relatedly, the White House wants to contrast its moderate approach to GOP austerity zealots, who have launched a single-minded jihad against government spending. Once the public tumbles to the implications of the GOP’s demands for $100 billion in domestic program cuts now, Democrats reason, they will recoil and demand a more balanced approach that includes defense cuts and tax hikes.

That seems likely. Republicans have convinced themselves that most Americans share their goal of shrinking government by cutting off its credit card. “The country’s biggest challenge, domestically speaking, no doubt about it, is a debt crisis,” House Budget Committee Chair Paul Ryan said this weekend.

But progressives believe that Americans – especially the independents and moderates who abandoned Democrats in the midterm election – are even more concerned about the scarcity of good jobs and America’s eroding competitiveness. More than fiscal stringency, they are looking to their leaders for a hopeful plan to jumpstart the stalled U.S. job machine.

The President’s budget accordingly makes room for significant new public investments, especially in infrastructure, innovation, and education. He wants to spend $53 billion over the next six years on high speed rail, and invest $50 billion in capitalizing a National Infrastructure Bank. The GOP’s knee-jerk dismissal of such strategic investments as just more government waste is wrong as a matter of economics, and it leaves conservatives without a credible theory for how they would rekindle economic growth.

So maybe Obama is right to stand back and give Republicans all the fiscal rope they need to hang themselves from the tree of uncompromising budget austerity. But his Fiscal Commission, which labored diligently and successfully to find some fiscal common ground between the parties, especially on scaling back tax expenditures, deserves better from him. And sooner rather than later, the President will have to step up and lead on entitlement reform, a national imperative that can no longer be safely deferred.

End Separate War Spending

Monday, February 14th, 2011
Jim Arkedis



Jim Arkedis is the director of PPI's National Security Project.

by Jim Arkedis

It’s federal budget season. Before you doze off, stick with me: there’s a deceptive budgetary maneuver that is costing you billions in defense dollars, forcing progressive members of Congress into uncomfortable votes on Iraq and Afghanistan, and defying every historical precedent in Pentagon budgeting.

This maneuver is the supplemental appropriation for war funding. Every year since the United States launched military operations in Afghanistan in response to the September 11th attacks, Congress has appropriated separate funds for unanticipated wartime costs in addition to the Pentagon’s baseline budget. In some years, only one extra war spending bill is approved; in 2010, two supplemental appropriations were passed.

Supplemental war funding appropriations are hardly new, beginning in World War II. When used correctly, the process serves as a vital tool that delivers timely funding to America’s fighting men and women. In the initial stages of combat, supplemental appropriations are extraordinarily useful in the face of the lengthy Congressional budget process, which does not allow for unanticipated military spending. Typically, the supplemental funds pay for pre-deployment costs, servicemembers’ transportation to the warzone, combat operations, equipment needs, and military construction. Without this tool, the Pentagon would essentially be forced to sacrifice long-term projects to meet immediate wartime needs.

Here’s the rub: Under the Bush administration, allegedly “emergency” supplemental appropriations for war costs became routine avenues for backdoor spending. Their opaque nature and lack of oversight have created a propensity to fund low-priority programs that has effectively eroded any sense of fiscal discipline at the Pentagon, bloating military spending. We must put an end to the practice

The Department of Defense (DoD) is the unquestioned champion of discretionary spending—money the government chooses to spend, rather than is obliged to pay for entitlements like Medicare, Medicaid, or Social Security. With more than $700 billion in discretionary funds available, the Pentagon far outpaces its nearest competition, the Department of Health and Human Services, at $80 billion.

Since 2001, the Congressional Research Service (CRS) estimates that Congress has approved $1.12 trillion in supplemental appropriations, 90 percent of which—$1.01 trillion—has been destined for the Department of Defense. One estimate is that Congress has no control over one-fifth of supplemental war spending; therefore, a rough calculation suggests that some $200 billion has been wasted in 10 years.

While those on the extreme left and in the Tea Party would like to see slashes in the Pentagon’s spending, what DoD’s budget really needs is not gutting, but a solid dose of discipline.

Read the policy memo

The Republicans Take Out Their Budget-Cutting Scissors

Friday, January 21st, 2011
Ed Kilgore



Ed Kilgore is a PPI senior fellow, as well as managing editor of The Democratic Strategist, an online forum.

by Ed Kilgore

Now that we’re past the Kabuki exercise of the health reform “repeal” vote (for the record, just three House Democrats voted for repeal); the attention of Congress is inevitably refocusing on spending issues.  And that intrepid group of very conservative folks, the House Republican Study Committee, has come forward with the year’s first semi-detailed list of non-defense discretionary cuts, which along with some pixie-dust math and a lot of TBD across-the-board measures, is said to amount to $2.5 trillion over ten years.

The proposed cuts fall into three basic categories: long-time deficit reduction targets that sound good but don’t accomplish much (the “mohair subsidy” and such small federal programs as the Economic Development Administration and the Appalachian Regional Commission); highly political targets closely associated with Democratic initiatives or constituencies (national and community service; Davis-Bacon “prevailing wage” rules; NEA and NEH; Title X Family Planning); and bigger-ticket items that involve massive reductions in federal or state employment and/or services (cancelling the enhanced Medicaid match rate).  There are also proposals that would raise some large foreign policy concerns, such as elimination of USAID and of economic assistance to Egypt.

It’s notable, of course, that these proposals do not touch the defense or homeland security sectors of federal spending—or Social Security and Medicare, for that matter.  According to an analysis by the Center for Budget and Policy Priorities, the RSC’s overall spending goals require an overall reduction of 42 percent in the areas it does not exempt.

One issue that conservatives will likely refuse to debate is the potential impact of such cuts on economic recovery, since they categorically reject Keynsianism these days and also refuse to accept public employment as real.  Said RSC member Tom McClintock (R-CA): “Presidents like Hoover and Roosevelt and Bush … and now Obama, who have increased government spending relative to GDP all produced or prolonged or deepened periods of economic hardship and malaise.” Democrats used to charge Republicans with wanting to bring back the fiscal policies of Herbert Hoover, but now Hoover himself is being rejected as a big-spending liberal, reflecting a view of the Great Depression that was exceptionally fringy until very recently.

The RSC package is probably intended as something of a mine canary for the official House Republican non-defense-discretionary spending offensive that will occur in conjunction with the expiration of the current continuing resolution for appropriations and a vote to increase the public debt limit.  It will be interesting to see exactly how many Republican lawmakers line up behind the package, and if any strongly object to provisions that will definitely cause them political heartburn.

In a related note, Republicans have chosen House Budget Committee chairman Paul Ryan of Wisconsin to present their response to the State of the Union Address.  This indicates the extent to which GOPers want the 2011 focus to remain on budget cuts.  Ryan’s success may also determine whether his name keeps coming up as a possible dark horse 2012 presidential possibility.  Ryan, of course, is closely identified with a budgetary approach (his famous 2010 “Road Map”) that includes significant changes in Social Security and Medicare.  Perhaps consideration of what a non-entitlement-reduction budgetary offensive like RSC’s would involve will revive Republican interest in Ryan’s original thinking.

In non-legislative political news, the big headline was Sen. Joe Lieberman’s decision against running for a fifth term in 2012.  With major rivals lining up in both parties, and with Lieberman’s approval ratings in Connecticut looking very poor, his retirement decision was no great surprise.  But the discussion of his legacy will be interesting, since few recent political figures have stimulated such widely disparate assessments, from centrist martyr to unprincipled backstabber.

On the 2012 presidential front, reports indicate that Sarah Palin is finally making some concrete inquiries about what it would take to start up a proto-campaign in Iowa, and pressure continues to mount on Mike Pence to eschew an Indiana gubernatorial run and give cultural conservatives a guaranteed champion in the White House field.  A new PPP poll shows Mike Huckabee opening up a comfortable national lead among Republicans for the 2012 nomination, with 24 percent of the vote, and Sarah Palin and Mitt Romney tied for second at 14 percent and Newt Gingrich not far behind at 11 percent.

The Republicans’ Self-Negating Electoral Strategy

Friday, October 15th, 2010
Lee Drutman



Lee Drutman is a senior fellow and the managing editor for the Progressive Policy Institute.

by Lee Drutman

I was struck by an item in the recent Washington Post/Kaiser/Harvard Survey on The Role of Government: The fact that in 2000, 28 percent of Republicans said they would give the overall performance of the federal government a grade of “A” or “B”.  (And that was with Bill Clinton as President.)

That number today is 8 percent, which is about what you would expect, given the ubiquitous anti-government rhetoric. It’s a remarkable loss of any faith in government by one of the two major political parties.  (By contrast, 42 of Democrats now rate government “A” or “B” – slightly less than the 47 percent in 2000, but not as significant a decline.)

But here’s the question that sticks with me: What happens if the Republicans take back the House or at least make significant enough gains to have ownership over the government again? Will the anti-government rhetoric explode in their face?

Having spent so much energy disparaging Washington, can Republicans maintain popular support if they take back some share of the federal government and are forced to make hard choices of actually governing? It’s easy for Republican voters to have no faith in Washington when it’s controlled by Democrats, but what happens if Republicans again have a share of governing responsibility?

Consider another telling item in the same poll highlights a problem that Republicans are going to face: Half of the country thinks that the budget can be balanced with only cuts to “wasteful spending.” But as Jon Cohen and Dan Balz note: “Eliminating waste in the budget would do very little to bring down the size of the deficit.” Republicans have, as many opposition parties are wont to do, peddled excessively simple solutions to excessively difficult problems.

In today’s Times, Kate Zernicke notes that “33 Tea Party-backed candidates are in tossup races or running in House districts that are solidly or leaning Republican, and 8 stand a good or better chance of winning Senate seats” – In other words, a there will be a sizeable caucus of firethrowers who will continue to amp up the anti-government rhetoric within the party.

But how long before the Tea Party faithful loses faith in the Republicans who they’ve elected on the bold revolutionary promises to tear down government when those promises go unfulfilled – as they inevitably must, given the dramatic mismatch between their platforms and what is actually possible to accomplish in Washington?

Republicans are essentially saying: Elect us to do things that we are incapable of doing. Elect us to run an institution that we have encouraged you to be thoroughly frustrated with, so that we can ultimately be in charge and be accountable for your frustration.

Of course, that’s not to say that Republicans can’t continue the Janus-like pose of both being responsible for governing and bashing the very idea of government. Reagan did it successfully. And even if Republicans take back the House, they will still have Obama and the Democratic-controlled Senate to bash.

But ultimately, it’s a self-negating electoral strategy. Republicans are never going to succeed in drastically shrinking the size of government or even repealing healthcare reform for the simple reason that when it comes down to it, there’s much less fat to trim than most people think, and certainly no fat to trim painlessly.

So I do not envy the new crop of Republicans who will be picking up seats this November. They’ll have been elected as part of an anti-incumbency, anti-government mood that they’ve done much to foment.  But that mood takes on a life of its own. It may not be so useful when they become the incumbents and are part of the government.

Photo credit:  babasteve

Why Democrats Must Change the Defense Budget Process, Now

Wednesday, July 28th, 2010
Jim Arkedis



Jim Arkedis is the director of PPI's National Security Project.

by Jim Arkedis

For the first time in my life, I think I agree with John Boehner (R-OH) when it comes to national security. Well, sort of. (And trust me, that’s a tough admission from a guy who wrote this column eviscerating Boehner’s track record on national security.)

Here’s what the Minority Leader said following yesterday’s war funding vote to send $33 billion to support the military deployment in Afghanistan:

“We’ve been through all of this wrangling, and for what? All we’ve created is more uncertainty for our troops in the field, more uncertainty for the Pentagon, and it’s all unnecessary.”

Before you go thinking that I’ve lost my mind, let me explain. Boehner is trying to ding Democrats politically for so much as debating (and then voting against) the Afghanistan supplemental. Essentially, Boehner chafes because Democrats refuse to write the Pentagon a blank check. While I fully support funding troops in the field, you’re about to see why I’m not endorsing Boehner’s blank check by any stretch.

But on the other hand, if you’re sick and tired of having to revisit this “wrangled” vote several times a year, the man might just have a point. And I’ll bet he doesn’t even know it. Democrats would do well to pay attention.

For the third time this year, Congress has appropriated money for Afghanistan. They did it first in the baseline defense budget (“check please!” $549 billion), the “overseas contingency fund” ($129 billion), and now this $33 billion supplemental. That comes to a whopping total of some $711 billion (depending on how you round, of course).

Each of these appropriations not only causes consternation throughout the Democratic caucus, but also reinforces the idea that Pentagon spending is void of any sense of restraint. After all, if you’re trying to sneak a defense appropriation into the first bill and it gets axed, the current system gives you two more chances to slide it in.

The current appropriation is a perfect example — just one month ago it was $30 billion, yet at yesterday’s vote, it grew ten percent to $33 billion. Why does Congress need an extra $3 billion today that they didn’t 30 days ago?

The good news is that Boehner has unwittingly opened the door for a sensible, pragmatic solution to defense budgeting: end the supplemental budgeting process. End the wrangling.

Instead of voting on three separate defense bills that total $711 billion, just vote on one bill that is $711 billion. Not only would it avoid stomach-turning votes for Democrats, a single defense appropriation would limit wasteful spending and prioritize America’s soldiers deployed on the field of battle.

Think of it this way: Once that money is appropriated, that’s it. There’s a definitive bottom line that Congress has to stick to. This forces hard choices about spending priorities based on a set amount. It is not the typical defense budget two-step of what’s available both now and what can be added in the future.

Money would be allocated first and foremost to the warfighter. Faced between the choice of spending money on the weapons, logistics and salaries that our deployed troops need, and buying more of a weapons system we don’t require. What choice do you want your member of Congress to make?

But with today’s three defense budgets, Congress can buy the all the weapons they want, and then appropriate as much as they need for the war.

John Boehner talks about “certainty” for the Pentagon, but he’s only talking about the certainty of spending more, with no sense of discipline.  If Democrats are smart, they’ll roll our three budgets into one, and be certain about prioritizing the warfighter and starting to control defense spending.

Photo Credit: The U.S. Army’s Photostream

For Intelligence, Big Doesn’t Always Mean Bad

Monday, July 19th, 2010
Jim Arkedis



Jim Arkedis is the director of PPI's National Security Project.

by Jim Arkedis

The Washington Post’s new series Top Secret America is well intentioned:

When it comes to national security, all too often no expense is spared and few questions are asked – resulting in an enterprise so massive that nobody in government has a full understanding of it.

That’s right. As an intelligence community analyst for some five years, I’ve seen plenty of the bureaucratic inefficiencies, excess and unchecked spending, and unwieldy sprawl that have mushroomed since 9/11. From this perspective, it’s important that questions get asked, money be justified, and overlap — where necessary and possible — be reduced.

My beef with the article — the first in a three-part series — is that it is framed as “big = bad.” Its thesis seems to be that more construction, more analysts, more information, more publications are all fleecing America. The series’ lede lays out this premise:

The investigation’s other findings include:

* Some 1,271 government organizations and 1,931 private companies work on programs related to counterterrorism, homeland security and intelligence in about 10,000 locations across the United States.

* An estimated 854,000 people, nearly 1.5 times as many people as live in Washington, D.C., hold top-secret security clearances.

* In Washington and the surrounding area, 33 building complexes for top-secret intelligence work are under construction or have been built since September 2001. Together they occupy the equivalent of almost three Pentagons or 22 U.S. Capitol buildings – about 17 million square feet of space.

* Many security and intelligence agencies do the same work, creating redundancy and waste. For example, 51 federal organizations and military commands, operating in 15 U.S. cities, track the flow of money to and from terrorist networks.

* Analysts who make sense of documents and conversations obtained by foreign and domestic spying share their judgment by publishing 50,000 intelligence reports each year – a volume so large that many are routinely ignored.

If you’re writing a piece of investigative journalism that is an implicit call for more oversight, pointing out physical size is an obvious organizing frame that seems to illustrate the problem. If there are a bunch of big buildings and no one knows what happens in them, are they necessary?

The problem, however, is delving into why physical size is symptomatic of the problem. Here, the article falls short — lost is that some of these mysterious, large building have contributed to our national security. Raw size isn’t the intelligence community’s problem.

For example, former Director of National Intelligence Dennis Blair released the IC’s budget for the first time. At $75 billion, it’s almost twice the State Department’s, but only ten percent of DoD’s (however, though the Pentagon’s intel spending is counted in Defense’s budget). If increased oversight improves efficiency by — oh, pick a number — 15 percent, the IC’s budget is still $64 billion and the vast majority of those new buildings out in suburban Maryland are still being built.

Or take the National Security Agency’s budget, the agency that controls our satellite spies that listen in to bad people (when not embroiled in Bush-era domestic eavesdropping cases). It’s budget has doubled.   Based on the “big = bad” frame, you might think this is inherently negative. I’d argue that there’s more to the story, and that the increase in signals intelligence collection has kept the country safer by forcing Al Qaeda to use arcane and slow means of communicating.

Buried are two important reasons why size matters, a link that should be made more explicitly. First:

The overload of hourly, daily, weekly, monthly and annual reports is actually counterproductive, say people who receive them. Some policymakers and senior officials don’t dare delve into the backup clogging their computers.

IC bean-counters value quantity over quality, the latter being more difficult to judge. I can’t tell you how many times we were told to “produce more,” irrespective of whether that production had any mission impact. A lot of dog shit is more valuable that one diamond. That’s because budgets are justified by numbers.

And second:

[S]ecrecy can undermine the normal chain of command when senior officials use it to cut out rivals or when subordinates are ordered to keep secrets from their commanders.  One military officer involved in one such program said he was ordered to sign a document prohibiting him from disclosing it to his four-star commander, with whom he worked closely every day, because the commander was not authorized to know about it.

Almost four years ago, I was in a meeting with the new intelligence chief for a certain country I was working on. He was briefed by my boss’s boss on a variety of secret operations my organization had going in the area. When the chief asked for further information about a specific operation, my boss’s boss continued on for several minutes about all the amazing intelligence we’re getting from it.

It was highly inconvenient that I knew better: in truth, that operation had been shut down for over a year, and continued to exist on paper only. My boss’s boss was giving the new chief a complete snow job, only to give the appearance of competence and justify more money. I decided to quit that afternoon.

In sum, there’s been no question that the intelligence community was ill-equipped to deal with the new security threats facing the country that grew in complexity and immediacy between the end of the Cold War and 9/11. An overhaul was necessary, and the community continues to face growing pains in the aftermath of that reorganization and the increased budgets that come along with it.

The central tension in intelligence spending is striking a balance between dollars and security. Much of the post-9/11 intel money has effectively contributed to the country’s security, an inconvenient truism that’s glossed over in the Post’s new series. In the remaining articles, I hope the focus is on the marginal rate of increased security for every dollar spent. And in cases where we’re not getting enough bang for our buck, I hope there’s a better explanation of what drives those inefficiencies. Raw size is an occasional indicator of a deeper problem, not the problem itself.

Photo Credit: Orin Zebest

Putting America on a Fiscally Sustainable Course — Fiscal Commission Public Forum Webcast

Monday, July 12th, 2010
Megan Milligan



Megan Milligan is an intern at the Progressive Policy Institute.

by Megan Milligan

PPI President Will Marshall’s remarks before the National Commission on Fiscal Responsibility and Reform during the commission’s first public listening session:

Read Will’s written testimony.

Culture War and Peace

Wednesday, July 7th, 2010
Ed Kilgore



Ed Kilgore is a PPI senior fellow, as well as managing editor of The Democratic Strategist, an online forum.

by Ed Kilgore

It’s no big secret that one of the rising smart-money favorites for the 2012 Republican presidential nomination is Indiana Gov. Mitch Daniels. Matter of fact, back in January, when National Journal asked 109 Republican “insiders” to rank possible nominees in terms of likelihood, Daniels finished fifth, tied with Sarah Palin and well ahead of Newt Gingrich and Mike Huckabee. And at the same time, 111 Democratic “insiders” ranked Daniels fourth when asked about the most formidable prospective GOP candidate. And that was all before a slow but steady drumbeat of interest in the Hoosier, culminating in one of those long, hagiographical magazine profiles that often serve as the informal launching pad of presidential runs, this one by Andrew Ferguson for The Weekly Standard.

You can see the logic behind the Daniels-for-president enthusiasm. Virtually unknown among voters outside Indiana, Daniels has none of the baggage accompanying retreads like Gingrich, Huckabee and Mitt Romney, or even fellow-insider-favorite Haley Barbour, much less the lightning-rod Palin. He’s a state official who has never had to cast a controversial vote in Congress, but also has DC street cred from his work in the Reagan White House and his stint as George W. Bush’s first OMB director (where he exited before the inevitable gusher of red ink really exploded). He’s very popular in a state carried by Barack Obama in 2008, and his state’s positive fiscal record stands out sharply against a national landscape of state fiscal disaster. Moreover, as Ferguson’s profile illustrates, Daniels has a moderately quirky but folksy personality that seems a lot more appealing than those of other, dark horses like Tim Pawlenty of Minnesota or John Thune of South Dakota.

Given the newly rediscovered monomania for deficit hawkery among Republicans, buttressed by Tea Party demands for smaller government now, Daniels looks like someone who can credibly wear a green eyeshade at a time when that’s the sexiest look around.

But in the self-same Ferguson profile that exemplified the emergence of Daniels ’12 buzz, the putative candidate himself (who has mastered a stance of disinterested availability for a White House run) tossed a little hand grenade into his own camp:

And then, he says, the next president, whoever he is, “would have to call a truce on the so-called social issues. We’re going to just have to agree to get along for a little while,” until the economic issues are resolved.

Predictably, Mike Huckabee pounced on the “truce” idea (or gaffe, or whatever it was):

“Apparently, a 2012 Republican presidential prospect in an interview with a reporter has made the suggestion that the next president should call for a ‘truce’ on social issues like abortion and traditional marriage to focus on fiscal problems,” Huckabee said. “In other words, stop fighting to end abortion and don’t make protecting traditional marriage a priority.”

“For those of us who have labored long and hard in the fight to educate the Democrats, voters, the media and even some Republicans on the importance of strong families, traditional marriage and life to our society, this is absolutely heartbreaking. And that one of our Republican ‘leaders’ would suggest this truce, even more so,” said Huckabee, a social conservative who is weighing another presidential run.

Christian Right warhorse Tony Perkins chipped in with his own more harshly worded condemnation of Daniels for talk of a culture-war truce:

We cannot “save the republic,” in Gov. Daniels’ words, by killing the next generation. Regardless of what the Establishment believes, fiscal and social conservatism have never been mutually exclusive. Without life, there is no pursuit of happiness. Thank goodness the Founding Fathers were not timid in their leadership; they understood that “truce” was nothing more than surrender.

Other, more sympathetic social conservatives, like National Review‘s Ramesh Ponnuru, wondered if Daniels had simply misspoken or overstated his focus on fiscal issues, but also warned him not to get carried away with fiscal-first rhetoric:

A lot of people will cheer [Daniels'] statement: Truces are usually popular, and most people see the economic issues as more important than the social ones at this moment. But I’m not sure how a truce would work. If Justice Kennedy retired on President Daniels’s watch, for example, he would have to pick someone as a replacement. End of truce.

I also can’t help but think of Phil Gramm’s presidential campaign in 1996. Like Daniels, Gramm was an enthusiastic budget-cutter. Concern about big government was running strong in the years just prior to that election. Gramm had a solid social-conservative record, but consciously chose not to campaign on it; he famously flew out to Colorado Springs to tell James Dobson, “I’m not a preacher.” That approach helped to doom Gramm’s campaign.

Finally, the Washington Post’s resident religious conservative Mike Gerson gave Daniels a chance to backtrack, and the Hoosier allowed as how cultural issues with a fiscal dimension, like the Mexico City rules (and presumably abortion funding generally), would not fall under any “truce.”

Crisis averted? Perhaps; certainly many Republicans will be privately counseling Daniels not to make the same mistake twice, and he’d be smart to take advantage of the Kagan confirmation issue by blowing the dog whistle of determination to appoint “strict constructionist” judges. Meanwhile, he’ll get some credit from the shrinking band of social moderates in the GOP, not to mention libertarians, along with secular MSM types whose skepticism of the Tea Party movement has always been tempered by their obvious relief at the sight of conservatives thumping not Bibles but the Constitution.

But it’s worth noting that Huckabee’s not the only 2012 possibility who is taking a different tack than Daniels on the culture wars. And indeed, the other candidate with a bullet next to his name of late, and in public polls rather than insider buzz (viz. a recent PPP survey of Texas Republicans, which placed him at the top of the 2012 list with or without home-state Gov. Rick Perry), is none other than Newt Gingrich, who seems determined to escalate the culture wars into a full-scale Clash of Civilizations.

The former House Speaker raised some eyebrows in May when his new, just-in-time-for-the-campaign book, To Save America, came out, with the unsubtle subtitle of: Stopping Obama’s Secular-Socialist Machine. Most of the negative commentary involved his comparison of the Obama administration to Nazi Germany and the Soviet Union, and even on that assertion, he’s only partially backtracked, according to a Fox News report:

Gingrich said that he stands by his argument that the “secular-socialist machine” represents as great a threat to America as Nazi Germany or the Soviet Union, not in the sense of the immorality of those deadly regimes, but as a “threat to our way of life.”

In the book itself, Gingrich calls this “threat” an “existential threat,” a term most often heard in connection with Israeli fears of a genocidal nuclear attack by Iran. And he is very clear that he’s not just fretting over debt or deficit forecasts, but instead is fighting an anti-religious threat to the essence of American culture:

[E]ven more disturbing than the threats from foreign terrorists is a second threat that is right here at home. It is an ideology so fundamentally at odds with historic American values that it threatens to undo the cultural ethics that have made our country great. I call it “secular-socialism.”

The Left has thoroughly infiltrated nearly every cultural commanding height of our civilization.

Not much of a hint of any “truce” in that kind of talk, is there?

So which of these two conservative Republicans best has his finger on the conservative Republican zeitgeist, the green-eyeshaded Daniels or the crusading Gingrich? Will there be peace with the socialist infidels until the books are balanced, or total war until the secularist roots of the socialist “machine” are destroyed once and for all?
It’s probably worth remembering where both of these men–and particularly the nationally-obscure Daniels–would have to begin any path to the White House: in Iowa.

This is not only a caucus states where social conservatives have always had a disproportionate influence (viz. Huckabee’s astonishing 2008 victory over Mitt Romney, who outspent him a gazillion-to-one). It’s also a place where conservative activists are more than a little obsessed with the goal of overturning the State Supreme Court’s legalization of same-sex marriage, a process that cannot, due to the vagaries of Iowa constitutional law, culminate before 2014.

Here’s guessing that a awful lot of Iowa Republican Caucus-goers won’t be ready to smoke any peace-pipes with their secular-socialist–and in their eyes, “sodomite”–enemies real soon, and that Daniels will have a tough sell convincing them otherwise.

This item is cross-posted at The Democratic Strategist.

Photo credit: Indiana Public Media

A Nation of Pilot Projects?

Wednesday, July 7th, 2010
Mike Signer



Mike Signer is a senior fellow at the Progressive Policy Institute.

by Mike Signer

More news this weekend that the Obama administration continues to pursue its unheralded campaign to reverse retrograde Bush-era policies and put the nation on a more sustainable footing. The president announced that the Department of Energy will award $2 billion in conditional commitments from the Recovery Act to two solar companies for plants in Arizona, Colorado, and Indiana, which together will create over 5,000 jobs.

The president’s heart is clearly in this cause. In his address, he said, “Already, I’ve seen the payoff from these investments. I’ve seen once-shuttered factories humming with new workers who are building solar panels and wind turbines; rolling up their sleeves to help America win the race for the clean energy economy.”

However, as good as it is, the announcement leaves a lingering question: On cutting-edge infrastructure issues such as solar, will we continue to be a nation of pilot projects? Or will we take any quantum leaps and achieve actual national policy?

There’s nothing to quarrel with in the announcements themselves. Abengoa Solar will build the plant in Arizona, which, when complete, will provide enough clean energy to power 70,000 homes. Over 70 percent of the components and products used in construction will be manufactured here in the U.S.

Abound Solar Manufacturing is building the Colorado and Indiana plants, which will produce millions of state-of-the-art solar panels each year—in Indiana’s case, using an empty Chrysler factory.

In announcing the plants on July 4th weekend, the president said, “But what this weekend reminds us, more than any other, is that we are a nation that has always risen to the challenges before it. We are a nation that, 234 years ago, declared our independence from one of the greatest empires the world had ever known. We are a nation that mustered a sense of common purpose to overcome Depression and fear itself. . . I know America will write our own destiny once more.”

But the question is whether the scale, scope, and ambition of our solar policy rises to the level of the president’s language. The Recovery Act monies, and the policies underlying them, have been attacked left and right for failing to deliver on a set of clear national priorities. The stimulus dollars have been spread so wide and thin that they’ve been vulnerable to attacks both on pork and policy grounds.

That two solar plants are heralded as helping America “win the race for a clean economy” is the same pattern we’ve seen elsewhere in the collision between the clean economy campaign and today’s toxic budgetary and political environment. We saw the pattern in high-speed rail. As PPI’s Mark Reutter has noted, the administration announced $8 billion in stimulus funds that would go to a handful of projects. But without additional administration pressure, those funds are only being followed by $1 billion of congressional authorization. As 100 members of Congress wrote the president recently, “[G]iven budget constraints, we cannot continue to rely on general authorizations and appropriations to finance high-speed rail. We need to identify a dedicated revenue source for high-speed rail, and we need your help to do that.”

We have also seen the pattern in nuclear energy, where the administration took the bold step of announcing loan guarantees for two new nuclear plants in Georgia, the first built in a generation. However, the president’s language again made the actual commitment pale in comparison to the challenge. In announcing the guarantees, he cited the fact that there are, today, 56 nuclear reactors under construction around the world: 21 in China; six in South Korea, and five in India. He said, “Whether it’s nuclear energy or solar or wind energy, if we fail to invest in the technologies of tomorrow, then we’re going to be importing those technologies instead of exporting them.  We will fall behind. Jobs will be produced overseas instead of here in the United States of America. And that’s not a future that I accept.”

The ambitions are noble and the rhetoric stirring, but the question is whether we really are shaping a future here—or just a set of ambitious but singular pilot projects.

Yes, there is too little money in annual authorizations for serious infrastructure. But as infrastructure expert Norm Anderson has recently written for PPI, “The financing issue — not a surprise for anyone in the infrastructure business — is the number one problem facing the industry.”

This is all the more reason the administration should follow the stirring rhetoric about competitiveness and “writing our destiny” by creating a new institution, such as an infrastructure bank of the type proposed by Sen. Chris Dodd (D-CT) and Rep. Rosa DeLauro (D-CT) and supported by the president in the past, that would create a long-term funding source and the energy for true national policy.

Photo credit: Bilfinger Berger Group

Recommendations on Curbing the National Deficit

Friday, July 2nd, 2010
Will Marshall



Will Marshall is the president of the Progressive Policy Institute.

by Will Marshall

The following is the is an excerpt from Will Marshall’s June 30 testimony before the National Commission on Fiscal Responsibility and Reform during the commission’s first public listening session:

Chairman Bowles, Chairman Simpson, and Members of the Commission, I appreciate the opportunity to appear before you to discuss ways to put America on a fiscally sustainable course.

Once unemployment rates start to fall, U.S. policy makers must be prepared to pivot sharply from fiscal stimulus to fiscal restraint. Otherwise, a large and growing federal debt will deplete our capital stock and thereby limit future economic growth. It will divert resources from productive investment to interest payments on the debt, half of which is already held by foreign lenders. And it will shake investor confidence, here and abroad, in the fundamental soundness of the U.S. economy, eventually driving interest rates up and the dollar down.

Despite these dire and entirely foreseeable consequences, too many federal policy makers remain in denial about the need for fiscal discipline. You have taken on what many consider a Mission Impossible: forging a bipartisan consensus on how to defuse the nation’s debt crisis. That’s put you in the crosshairs of extreme partisans of the left and right, who imagine this problem can be solved strictly at the other side’s expense. By refusing either to cut spending or raise taxes, the two have joined in a tacit conspiracy to bankrupt the country.

Common to both is the assumption that you can have fiscal responsibility, or you can have progressive government, but you can’t have both. We at the Progressive Policy Institute have always rejected this false choice. We believe that a progressive government can and must live within its means, and that if it instead chases the illusion of borrowed prosperity, it’s not really progressive.

To paraphrase Franklin Roosevelt, Americans know instinctively that borrowing routinely to consume more than you produce is both bad economics and bad morals. I don’t think it’s an accident that, as public worries about deficits have been mounting, public trust in government has been plummeting.

So there’s a lot riding on your ability to forge consensus behind a bold and balanced plan to restore fiscal responsibility. Let me offer some thoughts on what that plan should include from the perspective of a “progressive fiscal hawk.”

Read the entire testimony.