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Cut Defense Before Raising Taxes
The supercommittee backs budget hawks into an uncomfortable corner.

By Michael Tanner


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Lost amid all the hoopla last week about President Obama’s latest stimulus bill and the Republican primary dustup over whether Social Security is a Ponzi scheme was the news that the bipartisan “supercommittee” has begun its work trying to find at least $1.5 trillion in deficit reduction. Anyone who cares about low taxes, limited government, and economic growth should be paying close attention.

That’s because the initial signs are not encouraging.

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The supercommittee is, of course, the bastard child of this summer’s deal to raise the debt ceiling. Equally divided between senators and congressmen, Democrats and Republicans, the supercommittee is supposed to come up with a plan to reduce spending or increase taxes in order to reduce our national debt.

Democrats are pushing for tax hikes. A leaked memo from supercommittee documents includes proposals for a 5.4 percent surtax on families earning $1 million or more, an increase in the estate tax, and the usual hodgepodge of taxes on oil companies, hedge-fund managers, corporate-jet owners, and others who have drawn the Democrats’ ire.

It takes just seven votes to send the committee’s recommendations to the floor, so if just one of the Republicans jumps ship, then the Democrats’ tax hike will head to the House and Senate, where it will receive a vote under expedited procedures. And there is considerable reason to worry about whether Republicans are prepared to hold firm.

So far, Republicans have been bending over backwards to insist that all ideas are on the table. “I don’t want to rule anything in or out,” says Rep. David Camp (R., Mich.), who in addition to being a supercommittee member is chairman of the House Ways and Means Committee. Supercommittee member Rep. Fred Upton (R., Mich.) has said that he will join Democrats in opposing any effort to cut entitlements, including raising the retirement age for Medicare or Social Security. Upton says that, while he leans against raising tax rates, he is open to “closing loopholes.” Other Republicans have shown an interest in reviving the so-called grand bargain reportedly pursued by President Obama and Speaker Boehner. That deal, which would go well beyond the supercommittee’s $1.5 trillion in targeted cuts, included some $800 billion in higher taxes.

The Republican muddle is compounded by the fact that, if the supercommittee fails to reach an agreement, there will be automatic cuts of about $1.2 trillion over the next ten years, roughly $564 billion of which will come from defense, homeland security, and the State Department. Last week, Rep. Howard McKeon (R., Calif.), chairman of the House Armed Services Committee, told the Daily Beast that he would support a tax increase rather than accept any further cuts in defense spending. McKeon is not a supercommittee member, but his remarks reflect the pressure from Republican hawks and defense contractors now being brought to bear.

This position seems remarkably shortsighted. First, the sequester would not go into effect until 2013, leaving Republicans with plenty of time to change the mix of domestic and defense cuts after the 2012 elections. But even if the cuts were to occur, they amount to just a bit more than 8 percent of expected defense spending over the next decade. With the U.S. spending more on its military than the rest of the world combined, does anyone really believe that if we stop protecting Germany from a Russian invasion, cancel weapon systems that don’t work, or reduce the number of generals and admirals populating the Pentagon, that al-Qaeda will come swarming across our border?

On the other hand, if we fail to revive our economy, that really does represent a threat to our national security. And the massive tax hikes envisioned by supercommittee Democrats would be devastating for future economic growth. Republicans are facing a difficult choice. If we are ever to seriously cut the deficit and reduce our crushing national debt, 20 percent of the federal budget cannot be permanently kept off the table. After all, a poorer America is not a more secure America.

With the supercommittee’s November 23 deadline just two months away, Republicans had better figure out what their position is. Otherwise, we should get ready for higher taxes.

— Michael Tanner is a senior fellow at the Cato Institute and author of Leviathan on the Right: How Big-Government Conservatism Brought Down the Republican Revolution.

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COMMENTS   30

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   09/14/11 06:41

"The most significant threat to our national security is our debt"

Joint Chiefs of Staff Chairman Adm. Michael Mullen

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   09/14/11 07:05

If this is the choice, take the defense cuts and fix that when we take it all in 2012.

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W2
   09/14/11 07:07

When asked whether he agreed with Mullen's quote, Gen Dempsey, new chairman of the joint chiefs, said "no."

The problem I have with this is that we allow entitlements to get a pass when conservatives make defense part of the conversation. CATO does good work, but their obsession over the defense budget when there's much bigger debt drivers out there is puzzling.

We should not let the Left steal national security from us as a signature issue!

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Perplexed
   09/14/11 07:29

There is no doubt that massive debt does pose a threat to our national security. If we can't afford to adequately defend ourselves against real threats then we are in jeopardy. However, if we don't start preparing to fight a major war with China then we are also doomed. We will either fight them or get out of the Pacific.

Neither choice is desirable but both are inevitable. We must face the very hard choice that the greatest economic threat to maintaining a necessary defense is the cost of entitlements. We have to 'bite the bullet' and start reducing the costs of those programs. They are the threat to our national security.

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   09/14/11 07:40

For openers, they can cut entirely the aid we are giving to The Palestinian authority. Why are we funding our enemies? The PA recently announced it has reconciled with Hamas as we read in the pages of NR. It may only be less than a billion, but a billion here and a billion there...
There has to be more money going to other terrorist linked organizations. Those are easy cuts. This is a time of austerity, don't you know.
We can take out the czars. They never were needed before. Why do we need them now?
How about telling Congress you cannot legislate health care unless you give up your insurance and go with what you are imposing on ordinary Americans. Perhaps, congress will rethink its support of Obamacare and start defunding it.
Can the committee look into the infrastructure Obama is already putting in place to make it very difficult to overturn Obamacare? Perhaps there is money to be saved there.
How about the unspent stimulus money? Can it be put back?

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JB Tucson
   09/14/11 08:09

The problem lies with this uncanny drive to negotiate. The Republicans felt they had to negotiate the debt limit, soon they will have to negotiate tax increases or defense cuts. Better to say no to both and trigger even cuts accross the board than to get painted into a corner.

An example of how this negotiating works: Let's negotiate on whether you should give me $1000 dollars. If we negotiate long enough, you'll feel great about giving me $100, like you saved money or something. Never mind the fact that the $1000 or the $100 was for nothing at all, whatsoever. This is how Republicans are negotiating.

Now if we could negotiate less regulation, less government, more domestic oil, less taxes, well, now that would be negotiating.

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Matt B
   09/14/11 08:42

I believe we must have a strong military, strong defense, strong capability to bring the fight, and bring the aid via our military capability.

However I have seen first hand the waste that occurs in myriads of small ways. Excessive oversight, redundant review meetings, needlessly lengthy development time. Cuts in the 10% range could be accomodated without harming our present or future capability.

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Perplexed
   09/14/11 09:22

Trading defense for entitlements shouldn't be a surprise to anyone. Europe has been doing it for years and its consequences are displayed in their 'war' against Libya. That is our legacy if we continue on this insanity. Once we start cutting to pay for the nanny state then their is no ending of that. We are 'hooked' on big government and can't let go regardless of the consequences.

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   09/14/11 09:32

The Republicans surrendered in August 2011.

They voted to make the one time stimulus of 2009 an annual stimulus by building it into the annual budget. The 2009 stimulus was a reckless rape of American wealth transfered to unions, govt employees and Obama supporters. Few if any Republicans voted for the one time stimulus in 2009 but in 8/2011 a whole lot of them voted to make it an annual rape. The whole lot of them who voted yes in 8/2011 were elected in 11/2010 when a loud message was sent by Americans that they wanted reckless govt spending to end.

But the message was ignored and many of the Rep's who voted yes in 8/11 were so happy with their vote and the great deal they voted for to create a super dooper committee that would make everything worse. Now they can live with their deal with the devil and continue the rape of America. You get what you vote for and that applies to Americans voting for what were once representatives and representatives-not voting on legislation.

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   09/14/11 09:46

"Cut Defense Before Raising Taxes"

Either Republicans are stupid, or so linguine-spined about "default" that they passed this. It's the latter most likely. They passed the stupid bill that sets this false choice up. It could have been, "Cut Gov't as detailed by the CATO study of similar name Before Raising Taxes."

But shutting down useless gov't work programs in DOE, DOEd, blah, blah much too extreme.

This is what Romney talks about when he wants "protect Medicare" and "we need Medicare"--big gov't, spineless republicans.

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   09/14/11 10:15

This is a Hobson's choice that the GOP caused for itself by agreeing to a lame-brained settlement of the debt ceiling issue, stemming mainly from its collective inability to articulate clearly.

The GOP was unable, and probably unwilling, to communicate with the country that a further delay in negotiations -- to avoid this very fate -- would have ZERO impact on our credit-worthiness, or a default, as the federal government had plenty of cash to pay any debts then due.

But they are afraid of their own shadow. They now reap what they sow, as do the rest of us, who will pay higher taxes or see our military capability slashed.

Not only was this debt ceiling deal a dud, it was totally unnecessary to cave to a president who is this politically impotent.

I'd say this episode was a learning moment for the GOP if I had a shred of faith that they'll ever learn from past mistakes.

And there is zero hope that "Tea Party" members of Congress will infuse any semblance of sanity into the equation. 51% of them were cowed by the NYT, Washington Post and the networks -- to make no mention of tepid GOP leadership -- to go along with an awful settlement.

Just slash the military and be done with it. Our nation's productive members can ill afford higher taxes at a time when there is little to no investment being generated.

And I wish that conservatives would treat every politician equally, and quit reserving lofty praises for worthless wonks like Paul Ryan who, truth be told, are the key players in these god-awful deals that keep getting hoisted on us.

If just one such pol would stand up and say, "No. Not this time.", these comprehensive deals would die before being enacted.

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 SC
   09/14/11 11:51

There is a great deal of red tape and regulation that greatly increase the costs of compliance for military contractors and incentivizes costs over-runs.

Defense cuts ought to be contingent on reducing the costs of doing business.

As others have mentioned, reduce overseas deployments where it makes sense.

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   09/14/11 12:17

Perhaps the entire government, including defense, should subscribe to P.J. O'Rourke's 'Law of Economic Circumcision:'

You can cut 10% off of anything without really hurting it.

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   09/14/11 12:28

If Republicans have to choose between defense cuts and tax hikes, it's their own STUPIDITY that put them in that position.

Of course I find it slightly amusing that Tanner earlier referred to this deal as "Better Than Nothing".

Nothing in fact would have been better.

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History Buff
   09/14/11 13:13

"does anyone really believe that if we stop protecting Germany from a Russian invasion, cancel weapon systems that don’t work, or reduce the number of generals and admirals populating the Pentagon, that al-Qaeda will come swarming across our border?"

Yes...the folks over at "Weekly Standard", a lot of ditto-heads, and even some readers of "National Review" do.

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   09/14/11 13:15

If they can't find a nickel in cuts besides defense - Greece status is getting close.

It's the Fred Uptons in Congress that remind me why I have to support Perry. And this guy is in charge???

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   09/14/11 13:25

Defense is pretty much the only thing I want to pay for. There's a disconnect here somewhere.

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Zbigniew M. Mazurak
   09/14/11 14:09

The National Review, the GOP establishment's propaganda magazine, has utterly and irreversibly discredited itself. How? By publishing a ridiculous article by libertarian liar Michael Tanner of the CATO Institute.

In that article, Tanner, who, like other CATO Institute propagandists, is virulently opposed to a strong defense, has played into the Democrats' hands by accepting the unconstitutional Obama-GOP budget deal as an accomplished fact and by calling on the GOP to choose between defense cuts and tax hikes, and has clearly stated which option he prefers: defense cuts.

And while arguing for defense cuts, he has resorted to a litany of lies. (This is not surprising, though. If you want to argue for defense cuts, you have to use a litany of lies. There are no factually-correct arguments for defense cuts. If you want to argue for defense cuts, you have to resort to lies.)
Tanner claims that if the sequester is introduced, nat-sec departments will be cut by $564 bn. This is false; they will be cut by a full $600 bn and if history is any indication, the DOD will shoulder the bulk, if not the entirety, of these budget cuts. So far, neither the DHS nor the DOS have ever seen their budget cut during the last 3 years. Indeed, Obama has DOUBLED the budget of the DOS, and the DHS' budget has also been increased by Obama, aided by Congressional Republicans. Moreover, these budget cuts will be made IN ADDITION TO all the defense cuts already administered by Obama and the $350-bn-over-a-decade cuts ordered by the debt ceiling legislation (which amount to $35 bn per year, on average).
Tanner claims that the sequester won't kick in until 2013, "leaving Republicans with plenty of time to change the mix of domestic and defense cuts after the 2012 elections." This is a blatant lie. If the deficit reduction committee's recommendations are rejected by the Congress, or the cmte. fails to present them to the Congress by Nov. 23rd, the sequesters will kick in in November 2011, in FY2012. The DOD will see massive budget cuts ($60 bn per year on average, in addition to the $35 bn per year on average cuts already ordered by the debt ceiling legislation, which the DOD will have to make regardless of whether the sequester is triggered or not).
But even if his claim was true, which it is not, would it be really fair and prudent to give Republicans just a few months to prevent automatic defense cuts that the sequester would make? Of course not. But Tanner disagrees.
Tanner has also lied that these defense cuts would amount to just 8% of "expected defense spending over the next decade". Specifically, he has written:
"But even if the cuts were to occur, they amount to just a bit more than 8 percent of expected defense spending over the next decade."
That is a blatant lie. The FY2011 core defense budget is $528.9 bn. Future defense budgets are projected to be even smaller. $60 bn of that would be 11.344% (i.e. 11%) of the core defense budget (the budget to which the cuts would be made - the sequester would not cut the GWOT budget that pays for the Iraqi and Afghan wars). But, as I wrote above, these cuts would be made on top of the $350-bn-over-a-decade cuts already ordered by the debt ceiling legislation (which amount to $35 bn per year, on average). Add these budget cuts up, and you get defense budget cuts to the tune of $85 bn per year, on average, i.e. 16% of the defense budget!
Tanner has also lied that "With the U.S. spending more on its military than the rest of the world combined, does anyone really believe that if we stop protecting Germany from a Russian invasion, cancel weapon systems that don’t work, or reduce the number of generals and admirals populating the Pentagon, that al-Qaeda will come swarming across our border?"
The US does NOT spend more on its military than the rest of the world combined. As the latest SIPRI figures prove, the 20 next countries combined collectively spend more on their militaries than the US. The entire rest of the world combined spends far more on their militaries than the US. Withdrawing troops from Germany will not save the US a cent; it will actually ADD costs because the DOD would have to build new bases in the US for the troops that would be coming home. Reducing the number of generals and admirals (which the DOD already plans to reduce by 100) will not produce any significant savings (there are currently 876 of them), as the DOD's own numbers prove. As for "weapon systems that don't work", what is Tanner talking about? The DOD no longer has any such systems. There were a number of such systems, but they have all been closed by Robert Gates (who has now retired as SECDEF), As Robert Gates said in May:
""
The DOD does not maintain "weapon systems that does not work." It's a blatant lie. Closing the weapon systems which it does maintain will leave the military even more under-equipped than it is now. The US military is already ill-equipped. The vast majority of its weapons are obsolete, worn-out, nonstealthy weapons produced during the 1960s, 1970s, and 1980s. The US has been having a "weapon procurement holiday" since 1989. This must end now.
Tanner also lied that "If we are ever to seriously cut the deficit and reduce our crushing national debt, 20 percent of the federal budget cannot be permanently kept off the table." This is the anti-defense-spending crowd's favorite argument, but it's a blatant lie. Military spending has NEVER been off the table. NEVER. Not during the 1940s, not during the 1950s, not during the 1960s, not during the 1970s, not during the 1980s, not during the 1990s, not under President Bush, and not under President Obama. I shall not even list the defense spending cuts administered before the 2000s, and I'll just mention those administered by Bush and Obama.
Under President Bush, Congress frequently cut (or denied funding for) many weapon programs, and in 2005, Bush's own OMB ordered defense spending to be cut by billions of dollars, forcing all services to make hard choices (for example, the Navy had to retire the USS John F. Kennedy). And in 2005, Bush threatened to veto the defense budget if the Congress would pass a larger defense budget than what Bush requested.
President Obama has cut or closed over 50 weapon programs and, by his own admission, his first SECDEF, Robert Gates, has cut $400 bn from defense accounts and defense spending plans. Obama himself has boasted about cutting $400 bn from defense accounts. The FY2011 CR, passed in April, cut defense spending (not just defense spending projections) in real terms, to $528.9 bn, and the debt ceiling legislation has ordered the DOD to cut the core defense budget even further, by $350 bn over a decade, i.e. $35 bn per year on average. This means that under President Obama alone, defense spending has already been cut by $400 bn and is slated to be cut further by $350 or potentially even $850 bn if the sequester is threatened. So Tanner's claim that military spending has been kept permanently off the table is a blatant lie, just like everything else that he has written.
Moreover, military spending does not constitute 20% of the federal budget. It constitutes less than 19%, and the core defense budget constitutes less than 15%.
I do not support any tax hikes. But I don't support any defense cuts, either. Forcing the Congress to choose between tax hikes and defense cuts is un-conservative. And that was exactly the Democrats' goal. The Dems know that Republicans oppose both. That's why they forced Republicans to choose between one of these options. By calling on Republicans to accept this deal as an accomplished fact and choose between tax hikes and defense cuts, he's doing the Dems' bidding.
But if Tanner was really a conservative, he would've instead called on the Congress to scrap this Committee, scrap this deal with Obama, and instead force all Congressional Committees to find some savings in the budgets they oversee. The debt ceiling deal is a plot made in hell, and it should've never been passed by the Congress. It's also unconstitutional. Nothing good can result from this deal. No thing that is basically flawed can produce good results. The Congress should throw this deal out and start over. When you mess up a pizza cake, you don't try to fix it. You discard it and start over.
But Tanner is not a conservative, so he doesn't care. He's just an anti-defense libertarian liar.
Tanner's entire article is an anti-conservative, anti-military, anti-defense propaganda leaflet. It's a litany of lies. Shame on Tanner for writing it, and shame on the NR for publishing it.

By publishing this litany of lies, the National Review has utterly and irredeemably discredited itself.

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   09/14/11 14:49

With the U.S. spending more on its military than the rest of the world combined, does anyone really believe that if we stop protecting Germany from a Russian invasion, cancel weapon systems that don’t work, or reduce the number of generals and admirals populating the Pentagon, that al-Qaeda will come swarming across our border?"
Just a little perspective here so...
1) The bulk of the military budget is spent on personnel costs, pay, medical, PCS moves and the like. That's the cost of having a professional military.
2) "National Defense" is more than just protecting our borders from an invasion. National defense is a key component of our foreign policy. Our ability to project force to any part of the world is a stabilizing factor in many regions. And you cannot limit American interests to just the geography between our borders.
3) Military operations are far more than just combat operations. Defense spending also enables global humanitarian operations as well (i.e. Haiti, South Asia in 2005 and so and so forth)
4) Unlike any other institution in our nation's history, the US military does an incomparable job of developing useful and productive citizens and technology. In terms of both tech development (internet anyone) and human capital, few other organization give the United States the return on their investment that defense spending does.
Finally, and perhaps most importantly, this is a false choice foisted upon Republicans by liberals. One to divide the party and make them weaker. You don't hear to many democrats breathlessly discussing tax cuts v/ entitlement cuts.

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   09/14/11 16:55

As Jonah Goldberg pointed out - the Dept of Ed hires no teachers but they do have a swat team. Like what do these people do all day?

I don't want to defend the other side of the planet either - but to go after defense and not after these sacred cows of the Democrat party makes Republicans look weak and like a bunch of saps.

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