Thursday, March 09, 2006

A truly radical federal budget

The Republican Study Committee, a group of conservative GOP lawmakers, today released their version of the 2007 federal budget, titled "Contract with America: Renewed."

Their budget would cut the deficit by $358 billion over five years, compared with $60 billion in Bush's budget. But as you might imagine, the devil is in the details. Their proposal is a mixture of solid ideas and conservative fantasies.

NEUTRAL IDEAS

Increase defense spending to match Bush's request for 2007. Defense spending shouldn't be sacrosanct, but adequate funding is a must. Reserve judgement on this pending a detailed look at where the money goes.

Eliminate the Mars initiative and the space shuttle program. The Mars program is great, but not the way it's being funded: by gutting everything else NASA does. If the Mars mission doesn't come with extra money, it should die. The space shuttle needs to be retired, but we should have its replacement in hand before that happens.


BAD IDEAS

Gut foreign aid. This is a huge mistake. The war on terror demands *more* foreign aid spending, not less.

Dept. of Energy. Eliminate federal funding for energy conservation research, and arbitrarily cut the department's size by 35 percent. In an era of high oil prices and searches for alternatives, this makes little sense.

Interior and Agriculture. Arbitrarily cut the size of the Depts. of Interior and Agriculture by 10 percent and impose a wide variety of cuts in environment and natural resource programs, including eliminating the Energy Star program (that logo that lets you know if you're buying an energy-efficient appliance).

Transportation. Eliminate Amtrak and mass transit subsidies and transfer a whole bunch of responsibilities to the states, including railroad safety and regulation and (the biggie) highway construction spending. Eliminate the subsidies that maintain the U.S. merchant marine. Privatize the FAA.... Dumping funding on the states merely shifts responsibilities. Maintaining the merchant marine is a security issue. Privatizing the FAA would harm its regulatory function.

Deep cuts in education spending. Eliminate the Reading Is Fundamental program and programs to encourage learning a second language -- this at a time when a shortage of foreign-language speakers is hampering our security efforts. Freeze spending for Head Start. Eliminate the Corporation for Public Broadcasting, National Endowment for the Arts and National Endowment for the Humanities and cut the Dept. of Education by 30 percent.

Health. Cut National Institute of Health budget by 10 percent, eliminate family planning programs and turn Medicaid and SCHIP into a block-grant program -- cutting $36 billion a year from it in the process, largely by capping spending increases without regard to actual need.

Aid to the poor. Save $13 billion a year by arbitrarly restricting eligibility for Section 8 housing (cutting the number of vouchers in half) and eliminating heating-bill assistance for low-income households. Again, arbitrary cuts that evince no concern for the impact of those cuts.

Social Security. Doesn't touch Social Security at all. This may be politically expedient, but even minor tweaks -- raising the eligibility age and lowering the income limits for benefits, for example -- would save huge amounts of money.

GOOD IDEAS

Agriculture. Cut lots of subsidies and programs at the Dept. of Agriculture. The whole agricultural subsidy structure could be thrown overboard and the country would be better off for it.

Medicare. Cut $63 billion a year from Medicare, by raising premiums and means-testing benefits. This is a reasonable approach and politically courageous. But they also propose limiting cost increases to a percentage point below medical inflation. Hospitals and doctors are already reluctant to take Medicare because it pays so little; this will just make that worse.

Legislative reforms. They advocate a line-item veto, earmark reform, strict sunset provisions on most federal programs, a discretionary spending cap and restoring pay-as-you-go provisions. All of those are excellent ideas. Which raises the question: "why aren't they already in effect?"

Bad programs. One of the strengths of the document is specifically identifying a lot of wasteful or useless programs that could be eliminated. Doing so usually doesn't free up a great deal of money, but it should be done on principle. Of course, people will disagree on what's wasteful or useless. I would recommend establishing a bipartisan committee whose sole job was to eliminate bad programs. Objective criteria would be used whenever possible; a committee vote could settle more contentious cases, with a tie meaning the program lives.

Once you read the budget, you can see why they didn't trumpet the specifics. Budget cutting, of course, will require pain, and they do have some good ideas; but by ignoring defense and Social Security and heaping the cuts on social programs and other conservative pet peeves, they undermine their credibility. It's a start, but it's only a start.

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