Politics & Policy

Kerry: Fiscally Disciplined?

Not even close.

We’ve all heard politicians say they want to “return fiscal discipline to Washington.” It is almost as fashionable these days as being for mom and apple pie. But what exactly does it mean? In a town whose occupants are at times baffled by the definition of “is,” fiscal discipline is an exceptionally elusive concept. How can voters distinguish the doers from the talkers?

The talkers would have you believe that fiscal discipline is defined by a courageous politician’s unrepentant willingness to raise taxes. In truth, raising taxes is the antithesis of fiscal discipline. Raising taxes is akin to buying larger pants in lieu of exercise and a low-calorie diet. On the other hand, true fiscal discipline — being frugal and watching what you spend — entails keeping government spending under control to minimize the drain of resources from the private sector to the public sector.

John Kerry, despite an unwavering twenty-year record of support for high-calorie federal-spending binges, now promises to keep spending in check should he win the presidency. Is he to be believed?

According to the non-partisan National Taxpayers Union, Kerry’s 65 campaign proposals for new and expanded government programs would balloon federal spending by $256 billion a year. Taking into account the handful of spending cuts Kerry has proposed, the net increase amounts to $226 billion a year.

Just how much is $226 billion? It is more than twice what the United States spent last year on crude oil imports; nearly four-times the value of the all the gold stored in Fort Knox; more than the federal government will spend in fiscal year 2004 on education, social services, community and regional development, veterans’ benefits, international affairs, and agriculture combined; more than the fiscal year 2004 state budgets (general-fund outlays only) for Wyoming, North Dakota, Vermont, South Dakota, Montana, New Hampshire, Idaho, Alaska, Nevada, Maine, Nebraska, Delaware, Rhode Island, West Virginia, Arkansas, Mississippi, Utah, Hawaii, Kansas, Iowa, New Mexico, Oklahoma, South Carolina, Oregon, Alabama, Colorado, Louisiana, Arizona, Missouri, Kentucky, Tennessee, Michigan, Maryland, Wisconsin, Washington, Indiana, Virginia, Connecticut, Minnesota, and North Carolina combined; and roughly equivalent to the gross domestic product of Sweden, the 35th largest economy in the world.

Given the sheer immensity of Kerry’s proposed spending increases, one cannot help but recall Will Rogers’ candid observation: “Thank God we don’t get all the government we pay for.”

But surely, having served in Washington, D.C., for nearly two decades, John Kerry must know by now where the federal budget can be trimmed. In fact, the senator has spelled out where he believes concrete savings are possible. A careful study of his speeches and campaign materials reveals that he will attempt to:

‐ “cut electricity use by the Federal government by 20 percent in 10 years”;

‐ “freeze the Federal travel budget”;

‐ “reduce the number of contractors employed by the Federal government by 100,000”;

‐ “implement GAO recommendations on wasteful management of government car fleet”;

‐ “reform the student loan program”;

‐ “reduce Medicare overpayments to HMOs”;

‐ “cut subsidies for high-income corporate farmers”;

‐ “eliminate the Office of Thrift Supervision”;

‐ “eliminate major statistical agencies and establish a single Statistics USA”;

‐ “eliminate trade promotion agencies and consolidate activities”;

‐ “merge the Commerce Department’s NTIA and TA”;

‐ “cut top-heavy bureaucracy at Federal agencies”;

‐ “use competitive bidding for medical equipment”;

‐ “reduce out-of-control administrative costs by five percent.”

In other words, out of the $2.3 trillion federal budget, John Kerry believes substantial savings are to be had from reminding federal employees to turn off their office lights at the end of workday. Under Kerry, federal employees will also attend fewer conferences and those who do travel must stay in the equivalent of a Motel 6. And Kerry’s “bold” proposal to reduce the number of federal contractors by 1.78 percent (which is what you get by cutting 100,000 jobs out of 5.6 million) will save even more!

All in all, while some of John Kerry’s proposed spending cuts have merit, the savings they would produce amount to little more than a rounding error in the federal budget. Although Kerry claims significant budgetary savings by calling for the creation of a commission to recommend cuts in corporate welfare, it is hardly a concrete savings proposal. It is notable, however, because Kerry also proposes hefty spending increases for his favorite corporate welfare programs and the creation of new “tax credits and subsidies” for manufacturers that meet certain criteria.

Even John Kerry’s spending cuts contain spending increases.

Oscar Wilde once remarked that a politician is “an animal who can sit on a fence and yet keep both ears to the ground.” Perhaps no other statement better explains John Kerry and his dalliance with fiscal discipline.

– J. Edward Carter is an economist in Washington, D.C. PLEASE SEE EDITOR’S NOTE


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