Friday, November 19, 2010
It isn't the earmarks, stupid.
Bullying Republican Senate leaders into a "voluntary" ban on earmarks may represent a political triumph for the tea party movement, but as a measure to reduce the federal deficit it is a meaningless substitute for real action. The facts about earmarks -- and the deficit, for that matter -- are so simple that even the dumbest birther should be able to understand.
Funds directed to specific projects by legislators -- which is what earmarks are -- account for around 1 percent of any annual budget, so they represent far too little money to substantially reduce the budget. Besides, banning earmarks won't reduce the budget (or the deficit) anyway, because they are drawn from funds that have already been appropriated.
So much for that sideshow, a cynical exercise whose only conceivable purpose is to deceive voters. How would serious people try to reduce the deficit? First, it is essential to understand how and why the deficit grew in the first place.
It isn't the stimulus, stupid. And it isn't the bailouts, either.
Compared with the actual causes of the long-term deficit, neither the American Recovery and Reinvestment Act nor the Troubled Asset Relief Program amounts to much -- even though they were successfully demonized by the same people who make noise about earmarks. Most of the TARP expenditures will be recovered eventually. And according to the Center for Budget and Policy Priorities, whose analysis is broadly respected as nonpartisan and accurate, all of the stimulus spending will account for slightly more than $1 trillion between 2009 and 2019, including debt service.
Now a trillion dollars sounds like a lot of money, even over a decade, and it is -- except when measured against the far greater costs of the wars in Iraq and Afghanistan and the tax cuts enacted during the Bush administration.
As many commentators noted at the time, no president before George W. Bush had embarked on a major war -- let alone two wars -- without raising revenue to pay the costs. The CBPP estimate of the combined cost of the Iraq and Afghan conflicts and the Bush tax cuts adds nearly $7 trillion to the federal deficits between 2009 and 2019, or roughly six to seven times the amount attributed to the stimulus.
Still paying attention? The other underlying causes of the long-term deficit are the lingering costs imposed by the recession, which will continue to eat away at the federal budget for a decade to come, and the rising national bill for health care as the population ages.
No, stupid, that doesn't mean the deficit is caused by health care reform or "Obamacare" -- although that has been demonized, too. In fact, the president's attempt to reform America's broken, ridiculously inflated system of delivering medical care is likely to reduce health care costs significantly, but that is only a beginning.
Proposals to reduce the deficit by impoverishing seniors, punishing middle-class families, and neglecting infrastructure and education will do more harm than good. The deepest problem in the U.S. economy is the gross tilt of income and wealth toward the very top and the distortion of policy to favor financial manipulation rather than real growth.
Perhaps it is time to listen again to the only president in recent memory who balanced four budgets and left a surplus for the Republicans to squander. He achieved those goals not by cutting spending, shutting down the government or ending welfare, but raising taxes on the wealthy in his first budget. There will be no progress toward fiscal balance and economic sanity until we acknowledge those facts -- and stop listening to stupid.
Joe Conason writes for the New York Observer (www.observer.com).
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