Friday, March 27, 2009

GOP Releases Problem-Laden Alternative "Budget" Preview

The GOP has offered an alternative budget blueprint that is short on details and that fails to specify anticipated spending and revenue, which are essential elements of a "budget." Much of of the document simply responds to President Obama's plan in politically charged (and already familiar) language.

According to Politico, some Republicans are upset by the document, which they believe upstages a serious alternative budget currently under production:
“In his egocentric rush to get on camera, Mike Pence threw the rest of the Conference under the bus, specifically Paul Ryan, whose staff has been working night and day for weeks to develop a substantive budget plan," said a GOP aide heavily involved in budget strategy.

"I hope his camera time was gratifying enough to justify erasing the weeks of hard work by dozens of Republicans to put forth serious ideas," the person added.

"It's categorically untrue," said Pence spokesman Matt Lloyd. "Cantor as well as Ryan and the rest of the leadership have been part of this process for weeks. They not only signed off on it, but their staffs helped edit it."

Ryan told POLITICO that he didn't feel thrown under any buses and downplayed the disagreement.

"The problem is that somewhere along the line, someone got the mistaken impression that we were going to roll out a budget alternative today," he said. "What we all signed off on was a preview—the real [alternative] is coming next week."

Still, when he was asked what purpose today's preview served, Ryan directed me to Pence's office: "You've got to ask the conference this question, I can't answer that question."
Highlights from the Blueprint

Politics, Politics, Politics
The blueprint reads like a political document, rather than a budget (or budget preview). In one particular passage, the document rails against a host of traditional recipients of Republican scorn:

Who are the recipients of such largesse? International organizations and foreign aid recipients, including millions for reconstruction in the Hamas-controlled Gaza Strip. Labor union bosses participating in a new “green jobs” program. The National Endowment for the Arts, the Corporation for Public Broadcasting, Americorps, Title X Family Planning, and a host of spending programs that will do nothing to help our economy recover. And even community organizers, such as ACORN, performing “neighborhood stabilization.”
Questionable Statements
As with most political documents, the blueprint distorts the record. For example, it states that: "Democrats propose nearly $1 trillion in new spending on health care reform as a mere “down payment” for additional spending to come." Reality: The Democrats propose $634 billion for healthcare reform over the course of 10 years.

The blueprint also states that: "The prime focus of their agenda is the establishment of a government-run health insurance plan, designed to “compete” against private health insurance." Reality: Although Obama campaigned on the promise to create a public plan option, he has recently indicated that he might discard the idea. Also, two of the largest labor unions have dropped out of Obama's healthcare reform talks because they believe that the public plan issue is effectively off the table.

Sloppy Analysis
The blueprint also contains some sloppy analysis. It states, for example, that:

Actuaries at the Lewin Group estimated that nearly three in four Americans—119 million individuals—with employer-sponsored health insurance would lose their current coverage. These individuals would lose their coverage not because they made a voluntary choice to accept the government plan, but because their employers would save billions of dollars by ending their current coverage and dumping their employees into the government-run plan.
But the Lewin Group's findings are not based on any specific plan put forth by Obama -- because none exists. Instead, the group utilized plans mapped out by John Edwards and Hillary Clinton during the Democratic primaries. Furthermore, it is unclear to me why saving "billions of dollars" is a bad idea for employers. Perhaps they would pass some of that money to employees or use it to hire more workers (or simply pocket it themselves, which seems like a Republican value).

Fiscally Troubling
The Republican blueprint suffers from the same problem as the Obama budget: It promises to do many things with insufficient funds. I have already written about the skepticism economists have expressed concerning Obama's budget estimates. The Republican blueprint, however, makes a similar mistake by promising to implement "universal" healthcare and other reforms -- while dramatically slashing taxes. Specifically, the document states that:

Republicans propose a simple and fair tax code with a marginal tax rate for income up to $100,000 of 10 percent and 25 percent for any income thereafter, with a generous standard deduction and personal exemption.
The blueprint does not specify how this revenue-reducing proposal would lead to a balanced budget and a reduction in public debt.

Final Thoughts
I am troubled by the spending spree going on in Washington. But I was also bothered by the "cut taxes-and-spend a lot" policies of the Bush administration. For that reason, I look forward to debate among Democrats and Republicans who want to work on realistic solutions to the economic crisis and to refrain from engaging in partisan political grandstanding. Let's hope that members of Congress earn their pay by giving voters the thoughtful options they deserve.


Roy Lofquist said...


Of course it's all politics. No matter what the R's put in the alternative budget it will be completely ignored in the House. The D's are in charge and they will serve their parochial interests while mouthing platitudes about the common good. Exactly as the R's did when they were in control.

"But I was also bothered by the "cut taxes-and-spend a lot" policies of the Bush administration.".

In form, Bush was paying strict attention to the Constitution which vested the appropriation of funds to the legislative branch. Further, he did not exercise the veto to control spending. The veto is addressed in Federalist #73:

in which Hamilton argues that the veto be used only in extraordinary circumstances which he delineated.

As a practical matter, Bush was concentrated on his primary Constitutional mandate as CinC and security. He traded wide latitude in spending for Congressional funding of the war effort.


Darren Lenard Hutchinson said...

Roy, during most of the Bush administration, he had a Republican Congress. Yes, Congress has the constitutional authority to spend, but we all know that presidents are influential in the structure of the national budget. Bush, like all other presidents, proposed budgets, which Congress approved. The "Bush tax cuts" were legalized by an almost exclusive Republican vote. It was an act of Congress, but do you really think Bush was passive on this issue? No - this was a campaign promise.

Roy Lofquist said...


I've been watching this stuff for close to sixty years and understand less and less every year. Some "analysts" ascribe to the "follow the bouncing ball" approach - that is, grab onto a fact and follow it somewhere. Problem is that's like trying to follow one of the balloons coursing down on the teeming multitude at the quadrennial nominating conventions.

With that disclaimer:

The Bush Congress was the Clinton Congress. Under Clinton deficits decreased, under Bush they increased. Clinton represented the party of larger government, Bush of smaller. This is not proof positive that Presidents have less power over the economy than conventional wisdom holds, but is an indicator.

Further complicating any attempt at analysis is the sleight of hand in the government budgeting and accounting process. I still have no idea whether the charts and figures bandied about include the war(s).

It is tempting, to me anyway, to blame the Bush spending spree on the cupidity of Republicans. Everybody on the right does - RINOs!!! After thinking about it, though, I favor my quid pro quo hypothesis.


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