Politics & Policy

Savings. What Savings?

Congressional Republicans make French socialists look like Ronald Reagan.

As was the case during the Reagan years, the culture of spending has prevailed over the Republican promises to control spending and become fiscally responsible. After too many years in power, Republicans have forgotten the principles and values they should be standing for and have joined hands with the Democrats in the big spending orgy. The drama surrounding a phony savings package presented as a spending cut is the latest example of that behavior.

As part of a supposed push for fiscal discipline, the House’s proposed budget-resolution package promises to cut spending by $54 billion over the next five years. The Senate equivalent barely reached $35 billion over five years. Not surprisingly, these two packages immediately caused shrieks of pain throughout the media and on the Hill.

Based on the complaining, one would almost think that widows will be thrown into snow banks and children will starve in the streets. According to the Washington Post, “The proposed cuts would push some low-income working families and long-term legal immigrants off food stamps, eliminate childcare subsidies for some low income working families, cut funding for child-support enforcement, and require some low-income Medicaid recipients to pay more for their health care.” In fact, these complaints are supposed to make us believe that the House Republicans have gone crazy and are cutting the budget in half.

So what cuts are we talking about? Almost nothing, especially compared to the giant spending increases we have endured in recent years. With Republicans in control of both ends of Pennsylvania Avenue, spending has increased dramatically–$609.3 billion in four years. Of course, they argue that much of the increase stemmed from defense and homeland-security spending. In reality, no serious trade-offs were made and domestic spending rose almost as fast as defense spending.

And despite the “sky is falling” rhetoric, the budget-reconciliation savings are remarkably modest–for instance the House’s $54 billion barely represents half a percent of the $7.8 trillion entitlement spending budgeted over the next five years. What’s more, rather than imposing real cuts in spending programs that have been proven to be highly dysfunctional, redundant, and wasteful, the alleged savings only slow the growth in spending.

And this is where it’s obvious that the GOP has embraced the big-government philosophy. Republicans in Congress have skunked to the point that they are comfortable using the dishonest language used by Democrats years ago. They are happy to tell us that reducing the mandatory-spending-growth rate from 39 percent to 38 percent over 5 years rather than cutting spending is true fiscal conservatism. The reality is that these savings are meaningless.

Thankfully, claims the Washington Post, “Moderate republicans have the votes to block cuts in coordination with democrats, but would they have the courage?” Of course they would. Senator Olympia Snowe (R., Maine) for instance claims that these cuts are hitting the nation’s most vulnerable citizens just as the party was preparing to extend a series of tax cuts primarily benefiting the rich. Has the senator ever thought of switching parties? She would probably feel right at home among the Democrats.

Another argument made by moderates is that the recent November elections were clear evidence that Americans are moderate. But there might be a different interpretation of the fact that voters seemed to have rejected Republican candidates. For instance, Americans might very well be fed up with GOP’s big-government turn and the results of these elections are a warning.

And it’s a fact that the Republican party has abandoned their Contract with America commitment to limited constitutional government. They have been spending money like there’s no tomorrow, increasing the budget of the department of Education by 98 percent and boosting the number of pork-barrel items from 1,439 in 1995 to 13,999 in 2005. Recently, all but one senator voted in favor of an amendment granting an additional $11 billion over five years to subsidize Amtrak while President Bush in his February’s budget requested that spending for the bankrupt rail service be terminated.

Moreover, when asked that Senator Ted Stevens (R., Alaska) give up his bridge-to-nowhere earmark to rebuild a bridge in Louisiana, they voted by an overwhelming majority to let the culture of pork-barrel spending prevail over a small dose of fiscal restraint. At the same time they patted themselves on the back for suggesting offsetting Katrina-related spending while they should have start pruning the budget long ago to prepare for the massive increase in entitlement spending that baby boomers will trigger.

Republicans have failed to personalize Social Security and reform Medicare and Medicaid. They are even responsible for a hideous prescription-drug bill that makes the United States look a little bit more like Europe every day. Finally, moderate Republicans won’t stand for minor spending reductions and violently fight tax cuts forcing their supposed allies in Congress to drop several billions out of the already-pathetic savings plan. In the end, this embarrassing stumble not only reflected the disarray of the Republican party but also makes French socialists look like Ronald Reagan.

Looking ahead, Republicans need to rediscover the reforming spirit that they brought to Washington after the landmark 1994 congressional elections. They should work to cut unneeded programs from both the defense and nondefense parts of the budget. To begin getting the budget under control, an immediate hard freeze should be imposed on overall discretionary spending. That should be followed by entitlement reforms, cuts in low-priority domestic programs.

–Veronique de Rugy is a research scholar at the American Enterprise Institute.


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