Too Little, Too Late

Submitted by kvaughn on Fri, 09/24/2010 - 05:35

So the Republicans have released their Pledge to America. While the document was clearly written as an attempt to appeal to the Tea Party crowd, it falls well short of the Tea Party requests and actually looks more like a return to the policies that have led to a $13.5 trillion debt and rising.

The pledge starts with a lot of great rhetoric:

America is an idea – an idea that free people can govern themselves, that government’s powers are derived from the consent of the governed, that each of us is endowed by their Creator with the unalienable rights to life, liberty, and the pursuit of happiness. America is the belief that any man or woman can – given economic, political, and religious liberty – advance themselves, their families, and the common good.

...

We pledge to honor the Constitution as constructed by its framers and honor the original intent of those precepts that have been consistently ignored – particularly the Tenth Amendment, which grants that all powers not delegated to the United States by the Constitution, nor prohibited by it to the states, are reserved to the states respectively, or to the people.

Yes, the text surrounding the policy has the ring of the Patriot movement. But once you look under the covers, you start seeing the same misconceptions. Let's look at the three, well established Tea Party ideals: fiscal responsibility, constitutionally limited government, and free markets.

Fiscal responsibility

The plan claims to be fiscally responsible. It touts reduced government spending.

If we’ve learned anything over the last two years, it’s that we cannot spend our way to prosperity. We offer a plan to stop out-of-control spending and reduce the size of government.

With common-sense exceptions for seniors, veterans, and our troops, we will roll back government spending to pre-stimulus, pre-bailout levels, saving us at least $100 billion in the first year alone and putting us on a path to balance the budget and pay down the debt. We will also establish strict budget caps to limit federal spending from this point forward.

Perhaps it escaped their notice, but the annual deficit is currently in the range of $1.4 trillion. Saving $100 billion would lower the annual deficit to $1.3 trillion. This is hardly anything to crow about and does not "put us on a path to balance the budget and pay down the debt."

We will also prevent Washington from forcing responsible taxpayers to subsidize irresponsible behavior by ending bailouts permanently, canceling the Troubled Asset Relief Program (TARP), and reforming Fannie Mae and Freddie Mac.

Does anyone else see the irony of the Republican Party choosing Frank Wolf (R - VA-10) to unveil this pledge in his own district? Frank Wolf voted for TARP - twice. Now we are to believe that the Republican Party is reformed when they have him unveil this new pledge? Sorry, but the first step in solving a problem is admitting that you have one. Neither the Republican Party nor Frank Wolf has admitted that TARP was a mistake; putting a pledge like this in the pledge and having Frank Wolf announce it makes a mockery of the entire pledge.

Instead of pushing off our long-term fiscal challenges, we will reform the budget process to ensure that Congress begins making the decisions that are necessary to protect our entitlement programs for today’s seniors and future generations.

And yet they are silent on how to do this. A responsible budget requires spending cuts in the range of $1.6 trillion per year. This deserves more of a discussion than "we will reform the budget process."

The pledge also talks about other policies that affect our fiscal position. While the numbers for many of these are not provided, the annual costs would appear to break out as follows:

  • Eliminating Bush tax cuts on 98% of Americans (as Obama supports): $330 billion decrease in revenue
  • Eliminating Bush tax cuts on the top 2%: $70 billion decrease in revenue
  • Security issues (missile defense, border security, others): up to $10 billion increased spending
  • Repeal ObamaCare: $100 billion savings offset by $50 billion in increased Medicare and $50 billion in reduced tax revenue
  • Small business tax deduction: tens of billions decreased revenue
  • Cut Congress' Budget: <$1 billion decreased spending
  • Weekly votes on spending cuts: using Republican talking points: up to $120 billion; realistically: $20 billion decreased spending
  • Expand Health Savings Accounts: <$1 billion decreased revenue
  • Ensure Access for Patients with Pre-existing conditions: neutral (hidden tax and expense)
  • Make it easier to cut spending: <$10 billion decreased spending
  • And of course the $100 billion mentioned above in the roll-back of government

The net effect, if all policies passed and assuming the rosy Republican numbers would be perhaps $475 billion in decreased revenues and $270 billion in decreased spending (and more likely $170 decreased spending). The net effect is that the pledge will increase the baseline deficit projections by roughly $200 - $300 billion per year. Granted, there are some good ideas in the pledge AND the Democrats are proposing to extend the 98% Bush Tax Cuts with few other net changes - thus, the Republican proposal is $30 - $130 billion more favorable to the budget than the Democrat proposal, but this "savings" is in the noise of a $1.4 trillion deficit. The bottom line is neither proposal is responsible - they both lead to financial collapse within a decade.

Limited Government and Free market

The pledge also claims that it will restore the 10th Amendment. But once again, the details of the proposals demonstrate that the politicians can not help themselves from imposing their will on us.

  • The pledge includes expanded health savings accounts. In other words, the government wants to set up (enlarge) tax breaks for those individuals who choose to spend their money in a manner that matches the desire of the government. People who choose to spend their money in other ways are not given the tax break. Oh, and if you leave your money in the account at the end of the year, the government will be happy to take it off your hands for you.
  • The pledge includes a requirement for insurance companies to provide access with pre-existing conditions or to have lifetime spending caps. In other words, corporations are not allowed to contract with whom they want or to define the terms of their contracts. The government believes that it knows better than the marketplace and believes that they have the right to force people into contractual relationships. I recognize the plight of those who have to deal with pre-existing conditions, but this is not the solution. The solution is to provide the affected individual with financial assistance to overcome the known costs associated with their pre-existing conditions

Summary

The Republican establishment has not yet learned their lesson. Restoring this group to power with this stated agenda will not solve our problems. Unfortunately, the Democrats are offering even more disastrous proposals. We can only hope that the Tea Party candidate gains achieved in this election cycle are extended in 2012. Perhaps then we can enact some sensible policies that will bring our deficits under control.

My concern is that the longer we wait, the more drastic the measures will have to be. We do not have too many more years before our debt situation will place us exactly in the same spot that Greece is in today.

deficit, economy, Frank Wolf, politics, tea party, We Surround Them