Posts Tagged ‘ Budget ’

Why Democrats Must Change the Defense Budget Process, Now

Wednesday, July 28th, 2010
Jim Arkedis



Jim Arkedis is the director of PPI's National Security Project.

by Jim Arkedis

For the first time in my life, I think I agree with John Boehner (R-OH) when it comes to national security. Well, sort of. (And trust me, that’s a tough admission from a guy who wrote this column eviscerating Boehner’s track record on national security.)

Here’s what the Minority Leader said following yesterday’s war funding vote to send $33 billion to support the military deployment in Afghanistan:

“We’ve been through all of this wrangling, and for what? All we’ve created is more uncertainty for our troops in the field, more uncertainty for the Pentagon, and it’s all unnecessary.”

Before you go thinking that I’ve lost my mind, let me explain. Boehner is trying to ding Democrats politically for so much as debating (and then voting against) the Afghanistan supplemental. Essentially, Boehner chafes because Democrats refuse to write the Pentagon a blank check. While I fully support funding troops in the field, you’re about to see why I’m not endorsing Boehner’s blank check by any stretch.

But on the other hand, if you’re sick and tired of having to revisit this “wrangled” vote several times a year, the man might just have a point. And I’ll bet he doesn’t even know it. Democrats would do well to pay attention.

For the third time this year, Congress has appropriated money for Afghanistan. They did it first in the baseline defense budget (“check please!” $549 billion), the “overseas contingency fund” ($129 billion), and now this $33 billion supplemental. That comes to a whopping total of some $711 billion (depending on how you round, of course).

Each of these appropriations not only causes consternation throughout the Democratic caucus, but also reinforces the idea that Pentagon spending is void of any sense of restraint. After all, if you’re trying to sneak a defense appropriation into the first bill and it gets axed, the current system gives you two more chances to slide it in.

The current appropriation is a perfect example — just one month ago it was $30 billion, yet at yesterday’s vote, it grew ten percent to $33 billion. Why does Congress need an extra $3 billion today that they didn’t 30 days ago?

The good news is that Boehner has unwittingly opened the door for a sensible, pragmatic solution to defense budgeting: end the supplemental budgeting process. End the wrangling.

Instead of voting on three separate defense bills that total $711 billion, just vote on one bill that is $711 billion. Not only would it avoid stomach-turning votes for Democrats, a single defense appropriation would limit wasteful spending and prioritize America’s soldiers deployed on the field of battle.

Think of it this way: Once that money is appropriated, that’s it. There’s a definitive bottom line that Congress has to stick to. This forces hard choices about spending priorities based on a set amount. It is not the typical defense budget two-step of what’s available both now and what can be added in the future.

Money would be allocated first and foremost to the warfighter. Faced between the choice of spending money on the weapons, logistics and salaries that our deployed troops need, and buying more of a weapons system we don’t require. What choice do you want your member of Congress to make?

But with today’s three defense budgets, Congress can buy the all the weapons they want, and then appropriate as much as they need for the war.

John Boehner talks about “certainty” for the Pentagon, but he’s only talking about the certainty of spending more, with no sense of discipline.  If Democrats are smart, they’ll roll our three budgets into one, and be certain about prioritizing the warfighter and starting to control defense spending.

Photo Credit: The U.S. Army’s Photostream

For Intelligence, Big Doesn’t Always Mean Bad

Monday, July 19th, 2010
Jim Arkedis



Jim Arkedis is the director of PPI's National Security Project.

by Jim Arkedis

The Washington Post’s new series Top Secret America is well intentioned:

When it comes to national security, all too often no expense is spared and few questions are asked – resulting in an enterprise so massive that nobody in government has a full understanding of it.

That’s right. As an intelligence community analyst for some five years, I’ve seen plenty of the bureaucratic inefficiencies, excess and unchecked spending, and unwieldy sprawl that have mushroomed since 9/11. From this perspective, it’s important that questions get asked, money be justified, and overlap — where necessary and possible — be reduced.

My beef with the article — the first in a three-part series — is that it is framed as “big = bad.” Its thesis seems to be that more construction, more analysts, more information, more publications are all fleecing America. The series’ lede lays out this premise:

The investigation’s other findings include:

* Some 1,271 government organizations and 1,931 private companies work on programs related to counterterrorism, homeland security and intelligence in about 10,000 locations across the United States.

* An estimated 854,000 people, nearly 1.5 times as many people as live in Washington, D.C., hold top-secret security clearances.

* In Washington and the surrounding area, 33 building complexes for top-secret intelligence work are under construction or have been built since September 2001. Together they occupy the equivalent of almost three Pentagons or 22 U.S. Capitol buildings – about 17 million square feet of space.

* Many security and intelligence agencies do the same work, creating redundancy and waste. For example, 51 federal organizations and military commands, operating in 15 U.S. cities, track the flow of money to and from terrorist networks.

* Analysts who make sense of documents and conversations obtained by foreign and domestic spying share their judgment by publishing 50,000 intelligence reports each year – a volume so large that many are routinely ignored.

If you’re writing a piece of investigative journalism that is an implicit call for more oversight, pointing out physical size is an obvious organizing frame that seems to illustrate the problem. If there are a bunch of big buildings and no one knows what happens in them, are they necessary?

The problem, however, is delving into why physical size is symptomatic of the problem. Here, the article falls short — lost is that some of these mysterious, large building have contributed to our national security. Raw size isn’t the intelligence community’s problem.

For example, former Director of National Intelligence Dennis Blair released the IC’s budget for the first time. At $75 billion, it’s almost twice the State Department’s, but only ten percent of DoD’s (however, though the Pentagon’s intel spending is counted in Defense’s budget). If increased oversight improves efficiency by — oh, pick a number — 15 percent, the IC’s budget is still $64 billion and the vast majority of those new buildings out in suburban Maryland are still being built.

Or take the National Security Agency’s budget, the agency that controls our satellite spies that listen in to bad people (when not embroiled in Bush-era domestic eavesdropping cases). It’s budget has doubled.   Based on the “big = bad” frame, you might think this is inherently negative. I’d argue that there’s more to the story, and that the increase in signals intelligence collection has kept the country safer by forcing Al Qaeda to use arcane and slow means of communicating.

Buried are two important reasons why size matters, a link that should be made more explicitly. First:

The overload of hourly, daily, weekly, monthly and annual reports is actually counterproductive, say people who receive them. Some policymakers and senior officials don’t dare delve into the backup clogging their computers.

IC bean-counters value quantity over quality, the latter being more difficult to judge. I can’t tell you how many times we were told to “produce more,” irrespective of whether that production had any mission impact. A lot of dog shit is more valuable that one diamond. That’s because budgets are justified by numbers.

And second:

[S]ecrecy can undermine the normal chain of command when senior officials use it to cut out rivals or when subordinates are ordered to keep secrets from their commanders.  One military officer involved in one such program said he was ordered to sign a document prohibiting him from disclosing it to his four-star commander, with whom he worked closely every day, because the commander was not authorized to know about it.

Almost four years ago, I was in a meeting with the new intelligence chief for a certain country I was working on. He was briefed by my boss’s boss on a variety of secret operations my organization had going in the area. When the chief asked for further information about a specific operation, my boss’s boss continued on for several minutes about all the amazing intelligence we’re getting from it.

It was highly inconvenient that I knew better: in truth, that operation had been shut down for over a year, and continued to exist on paper only. My boss’s boss was giving the new chief a complete snow job, only to give the appearance of competence and justify more money. I decided to quit that afternoon.

In sum, there’s been no question that the intelligence community was ill-equipped to deal with the new security threats facing the country that grew in complexity and immediacy between the end of the Cold War and 9/11. An overhaul was necessary, and the community continues to face growing pains in the aftermath of that reorganization and the increased budgets that come along with it.

The central tension in intelligence spending is striking a balance between dollars and security. Much of the post-9/11 intel money has effectively contributed to the country’s security, an inconvenient truism that’s glossed over in the Post’s new series. In the remaining articles, I hope the focus is on the marginal rate of increased security for every dollar spent. And in cases where we’re not getting enough bang for our buck, I hope there’s a better explanation of what drives those inefficiencies. Raw size is an occasional indicator of a deeper problem, not the problem itself.

Photo Credit: Orin Zebest

Putting America on a Fiscally Sustainable Course — Fiscal Commission Public Forum Webcast

Monday, July 12th, 2010
Megan Milligan



Megan Milligan is an intern at the Progressive Policy Institute.

by Megan Milligan

PPI President Will Marshall’s remarks before the National Commission on Fiscal Responsibility and Reform during the commission’s first public listening session:

Read Will’s written testimony.

Culture War and Peace

Wednesday, July 7th, 2010
Ed Kilgore



Ed Kilgore is a PPI senior fellow, as well as managing editor of The Democratic Strategist, an online forum.

by Ed Kilgore

It’s no big secret that one of the rising smart-money favorites for the 2012 Republican presidential nomination is Indiana Gov. Mitch Daniels. Matter of fact, back in January, when National Journal asked 109 Republican “insiders” to rank possible nominees in terms of likelihood, Daniels finished fifth, tied with Sarah Palin and well ahead of Newt Gingrich and Mike Huckabee. And at the same time, 111 Democratic “insiders” ranked Daniels fourth when asked about the most formidable prospective GOP candidate. And that was all before a slow but steady drumbeat of interest in the Hoosier, culminating in one of those long, hagiographical magazine profiles that often serve as the informal launching pad of presidential runs, this one by Andrew Ferguson for The Weekly Standard.

You can see the logic behind the Daniels-for-president enthusiasm. Virtually unknown among voters outside Indiana, Daniels has none of the baggage accompanying retreads like Gingrich, Huckabee and Mitt Romney, or even fellow-insider-favorite Haley Barbour, much less the lightning-rod Palin. He’s a state official who has never had to cast a controversial vote in Congress, but also has DC street cred from his work in the Reagan White House and his stint as George W. Bush’s first OMB director (where he exited before the inevitable gusher of red ink really exploded). He’s very popular in a state carried by Barack Obama in 2008, and his state’s positive fiscal record stands out sharply against a national landscape of state fiscal disaster. Moreover, as Ferguson’s profile illustrates, Daniels has a moderately quirky but folksy personality that seems a lot more appealing than those of other, dark horses like Tim Pawlenty of Minnesota or John Thune of South Dakota.

Given the newly rediscovered monomania for deficit hawkery among Republicans, buttressed by Tea Party demands for smaller government now, Daniels looks like someone who can credibly wear a green eyeshade at a time when that’s the sexiest look around.

But in the self-same Ferguson profile that exemplified the emergence of Daniels ‘12 buzz, the putative candidate himself (who has mastered a stance of disinterested availability for a White House run) tossed a little hand grenade into his own camp:

And then, he says, the next president, whoever he is, “would have to call a truce on the so-called social issues. We’re going to just have to agree to get along for a little while,” until the economic issues are resolved.

Predictably, Mike Huckabee pounced on the “truce” idea (or gaffe, or whatever it was):

“Apparently, a 2012 Republican presidential prospect in an interview with a reporter has made the suggestion that the next president should call for a ‘truce’ on social issues like abortion and traditional marriage to focus on fiscal problems,” Huckabee said. “In other words, stop fighting to end abortion and don’t make protecting traditional marriage a priority.”

“For those of us who have labored long and hard in the fight to educate the Democrats, voters, the media and even some Republicans on the importance of strong families, traditional marriage and life to our society, this is absolutely heartbreaking. And that one of our Republican ‘leaders’ would suggest this truce, even more so,” said Huckabee, a social conservative who is weighing another presidential run.

Christian Right warhorse Tony Perkins chipped in with his own more harshly worded condemnation of Daniels for talk of a culture-war truce:

We cannot “save the republic,” in Gov. Daniels’ words, by killing the next generation. Regardless of what the Establishment believes, fiscal and social conservatism have never been mutually exclusive. Without life, there is no pursuit of happiness. Thank goodness the Founding Fathers were not timid in their leadership; they understood that “truce” was nothing more than surrender.

Other, more sympathetic social conservatives, like National Review’s Ramesh Ponnuru, wondered if Daniels had simply misspoken or overstated his focus on fiscal issues, but also warned him not to get carried away with fiscal-first rhetoric:

A lot of people will cheer [Daniels'] statement: Truces are usually popular, and most people see the economic issues as more important than the social ones at this moment. But I’m not sure how a truce would work. If Justice Kennedy retired on President Daniels’s watch, for example, he would have to pick someone as a replacement. End of truce.

I also can’t help but think of Phil Gramm’s presidential campaign in 1996. Like Daniels, Gramm was an enthusiastic budget-cutter. Concern about big government was running strong in the years just prior to that election. Gramm had a solid social-conservative record, but consciously chose not to campaign on it; he famously flew out to Colorado Springs to tell James Dobson, “I’m not a preacher.” That approach helped to doom Gramm’s campaign.

Finally, the Washington Post’s resident religious conservative Mike Gerson gave Daniels a chance to backtrack, and the Hoosier allowed as how cultural issues with a fiscal dimension, like the Mexico City rules (and presumably abortion funding generally), would not fall under any “truce.”

Crisis averted? Perhaps; certainly many Republicans will be privately counseling Daniels not to make the same mistake twice, and he’d be smart to take advantage of the Kagan confirmation issue by blowing the dog whistle of determination to appoint “strict constructionist” judges. Meanwhile, he’ll get some credit from the shrinking band of social moderates in the GOP, not to mention libertarians, along with secular MSM types whose skepticism of the Tea Party movement has always been tempered by their obvious relief at the sight of conservatives thumping not Bibles but the Constitution.

But it’s worth noting that Huckabee’s not the only 2012 possibility who is taking a different tack than Daniels on the culture wars. And indeed, the other candidate with a bullet next to his name of late, and in public polls rather than insider buzz (viz. a recent PPP survey of Texas Republicans, which placed him at the top of the 2012 list with or without home-state Gov. Rick Perry), is none other than Newt Gingrich, who seems determined to escalate the culture wars into a full-scale Clash of Civilizations.

The former House Speaker raised some eyebrows in May when his new, just-in-time-for-the-campaign book, To Save America, came out, with the unsubtle subtitle of: Stopping Obama’s Secular-Socialist Machine. Most of the negative commentary involved his comparison of the Obama administration to Nazi Germany and the Soviet Union, and even on that assertion, he’s only partially backtracked, according to a Fox News report:

Gingrich said that he stands by his argument that the “secular-socialist machine” represents as great a threat to America as Nazi Germany or the Soviet Union, not in the sense of the immorality of those deadly regimes, but as a “threat to our way of life.”

In the book itself, Gingrich calls this “threat” an “existential threat,” a term most often heard in connection with Israeli fears of a genocidal nuclear attack by Iran. And he is very clear that he’s not just fretting over debt or deficit forecasts, but instead is fighting an anti-religious threat to the essence of American culture:

[E]ven more disturbing than the threats from foreign terrorists is a second threat that is right here at home. It is an ideology so fundamentally at odds with historic American values that it threatens to undo the cultural ethics that have made our country great. I call it “secular-socialism.”

The Left has thoroughly infiltrated nearly every cultural commanding height of our civilization.

Not much of a hint of any “truce” in that kind of talk, is there?

So which of these two conservative Republicans best has his finger on the conservative Republican zeitgeist, the green-eyeshaded Daniels or the crusading Gingrich? Will there be peace with the socialist infidels until the books are balanced, or total war until the secularist roots of the socialist “machine” are destroyed once and for all?
It’s probably worth remembering where both of these men–and particularly the nationally-obscure Daniels–would have to begin any path to the White House: in Iowa.

This is not only a caucus states where social conservatives have always had a disproportionate influence (viz. Huckabee’s astonishing 2008 victory over Mitt Romney, who outspent him a gazillion-to-one). It’s also a place where conservative activists are more than a little obsessed with the goal of overturning the State Supreme Court’s legalization of same-sex marriage, a process that cannot, due to the vagaries of Iowa constitutional law, culminate before 2014.

Here’s guessing that a awful lot of Iowa Republican Caucus-goers won’t be ready to smoke any peace-pipes with their secular-socialist–and in their eyes, “sodomite”–enemies real soon, and that Daniels will have a tough sell convincing them otherwise.

This item is cross-posted at The Democratic Strategist.

Photo credit: Indiana Public Media

A Nation of Pilot Projects?

Wednesday, July 7th, 2010
Mike Signer



Mike Signer is a senior fellow at the Progressive Policy Institute.

by Mike Signer

More news this weekend that the Obama administration continues to pursue its unheralded campaign to reverse retrograde Bush-era policies and put the nation on a more sustainable footing. The president announced that the Department of Energy will award $2 billion in conditional commitments from the Recovery Act to two solar companies for plants in Arizona, Colorado, and Indiana, which together will create over 5,000 jobs.

The president’s heart is clearly in this cause. In his address, he said, “Already, I’ve seen the payoff from these investments. I’ve seen once-shuttered factories humming with new workers who are building solar panels and wind turbines; rolling up their sleeves to help America win the race for the clean energy economy.”

However, as good as it is, the announcement leaves a lingering question: On cutting-edge infrastructure issues such as solar, will we continue to be a nation of pilot projects? Or will we take any quantum leaps and achieve actual national policy?

There’s nothing to quarrel with in the announcements themselves. Abengoa Solar will build the plant in Arizona, which, when complete, will provide enough clean energy to power 70,000 homes. Over 70 percent of the components and products used in construction will be manufactured here in the U.S.

Abound Solar Manufacturing is building the Colorado and Indiana plants, which will produce millions of state-of-the-art solar panels each year—in Indiana’s case, using an empty Chrysler factory.

In announcing the plants on July 4th weekend, the president said, “But what this weekend reminds us, more than any other, is that we are a nation that has always risen to the challenges before it. We are a nation that, 234 years ago, declared our independence from one of the greatest empires the world had ever known. We are a nation that mustered a sense of common purpose to overcome Depression and fear itself. . . I know America will write our own destiny once more.”

But the question is whether the scale, scope, and ambition of our solar policy rises to the level of the president’s language. The Recovery Act monies, and the policies underlying them, have been attacked left and right for failing to deliver on a set of clear national priorities. The stimulus dollars have been spread so wide and thin that they’ve been vulnerable to attacks both on pork and policy grounds.

That two solar plants are heralded as helping America “win the race for a clean economy” is the same pattern we’ve seen elsewhere in the collision between the clean economy campaign and today’s toxic budgetary and political environment. We saw the pattern in high-speed rail. As PPI’s Mark Reutter has noted, the administration announced $8 billion in stimulus funds that would go to a handful of projects. But without additional administration pressure, those funds are only being followed by $1 billion of congressional authorization. As 100 members of Congress wrote the president recently, “[G]iven budget constraints, we cannot continue to rely on general authorizations and appropriations to finance high-speed rail. We need to identify a dedicated revenue source for high-speed rail, and we need your help to do that.”

We have also seen the pattern in nuclear energy, where the administration took the bold step of announcing loan guarantees for two new nuclear plants in Georgia, the first built in a generation. However, the president’s language again made the actual commitment pale in comparison to the challenge. In announcing the guarantees, he cited the fact that there are, today, 56 nuclear reactors under construction around the world: 21 in China; six in South Korea, and five in India. He said, “Whether it’s nuclear energy or solar or wind energy, if we fail to invest in the technologies of tomorrow, then we’re going to be importing those technologies instead of exporting them.  We will fall behind. Jobs will be produced overseas instead of here in the United States of America. And that’s not a future that I accept.”

The ambitions are noble and the rhetoric stirring, but the question is whether we really are shaping a future here—or just a set of ambitious but singular pilot projects.

Yes, there is too little money in annual authorizations for serious infrastructure. But as infrastructure expert Norm Anderson has recently written for PPI, “The financing issue — not a surprise for anyone in the infrastructure business — is the number one problem facing the industry.”

This is all the more reason the administration should follow the stirring rhetoric about competitiveness and “writing our destiny” by creating a new institution, such as an infrastructure bank of the type proposed by Sen. Chris Dodd (D-CT) and Rep. Rosa DeLauro (D-CT) and supported by the president in the past, that would create a long-term funding source and the energy for true national policy.

Photo credit: Bilfinger Berger Group

Recommendations on Curbing the National Deficit

Friday, July 2nd, 2010
Will Marshall



Will Marshall is the president of the Progressive Policy Institute.

by Will Marshall

The following is the is an excerpt from Will Marshall’s June 30 testimony before the National Commission on Fiscal Responsibility and Reform during the commission’s first public listening session:

Chairman Bowles, Chairman Simpson, and Members of the Commission, I appreciate the opportunity to appear before you to discuss ways to put America on a fiscally sustainable course.

Once unemployment rates start to fall, U.S. policy makers must be prepared to pivot sharply from fiscal stimulus to fiscal restraint. Otherwise, a large and growing federal debt will deplete our capital stock and thereby limit future economic growth. It will divert resources from productive investment to interest payments on the debt, half of which is already held by foreign lenders. And it will shake investor confidence, here and abroad, in the fundamental soundness of the U.S. economy, eventually driving interest rates up and the dollar down.

Despite these dire and entirely foreseeable consequences, too many federal policy makers remain in denial about the need for fiscal discipline. You have taken on what many consider a Mission Impossible: forging a bipartisan consensus on how to defuse the nation’s debt crisis. That’s put you in the crosshairs of extreme partisans of the left and right, who imagine this problem can be solved strictly at the other side’s expense. By refusing either to cut spending or raise taxes, the two have joined in a tacit conspiracy to bankrupt the country.

Common to both is the assumption that you can have fiscal responsibility, or you can have progressive government, but you can’t have both. We at the Progressive Policy Institute have always rejected this false choice. We believe that a progressive government can and must live within its means, and that if it instead chases the illusion of borrowed prosperity, it’s not really progressive.

To paraphrase Franklin Roosevelt, Americans know instinctively that borrowing routinely to consume more than you produce is both bad economics and bad morals. I don’t think it’s an accident that, as public worries about deficits have been mounting, public trust in government has been plummeting.

So there’s a lot riding on your ability to forge consensus behind a bold and balanced plan to restore fiscal responsibility. Let me offer some thoughts on what that plan should include from the perspective of a “progressive fiscal hawk.”

Read the entire testimony.

Time To End Supplemental Budgeting

Wednesday, June 30th, 2010
Jim Arkedis



Jim Arkedis is the director of PPI's National Security Project.

by Jim Arkedis

The House has taken up a $30 billion supplemental appropriations bill to fund Afghanistan. However, the bill has ballooned to over $70 billon as the Democratic leadership has had to slather on non-defense appropriations to attract the votes of more progressive caucus members frustrated with nine years of slow progress in Afghanistan. There’s a $10 billion education jobs fund, $18 billion in Department of Energy loan guarantees, and $500 million for border patrol. This bill has turned the old guns vs. butter argument into a fight about guns and butter.

The bottom line is Democrats’ left flank is fed up with tough but “must have” votes on issues they view as too centrist (a health care bill minus the public option, multiple war appropriations). But this bill’s incentives are wholly inappropriate: Spending $10 billion on education-related jobs may be a worthy expenditure when considered separately, but it has no business in a defense bill. The Republicans, of course, are having a field day — they’ve exposed the Democratic split by threatening to pull potentially vital support of war-funding unless the bill is stripped “clean” of non-defense expenditures.

The good news is that there is a magic bullet, and it would solve a lot more than political bickering: End the practice of supplemental budgeting. Beyond politics, having just a single, unified defense budget would force trade-offs in a defense spending culture that has run wild in the last 10 years.

Here how supplementals work. Every year since 9/11, we’ve had essentially two or three defense budgets. This year, we’ve had three: a baseline defense budget appropriation of approximately $549 billion, a $159 billion “overseas contingency operations” (i.e., mostly Afghanistan and Iraq) budget and the current supplemental request of $30 billion (which includes several tens of billions for non-defense items discussed above).

The dirty secret is that even many of Pentagon’s “emergency war appropriations” have nothing to do with our current wars. Take the F-22, for example. Before Secretary Gates won last year’s fight to cap production of the F-22, lawmakers inserted $600 million to buy additional planes in the 2009 “emergency supplemental” after the money was shut out of the baseline 2009 budget. This happened even though not one of the 183 F-22s already owned by the U.S. military had flown a single mission over Iraq or Afghanistan. That doesn’t sound like an emergency spending necessity, does it?

Having three budgets is like having three strikes in a baseball at-bat — you have the luxury to swing and miss twice. Projects that don’t make the baseline DoD budget (strike one!) can be considered in either of the additional supplementals (strike two! strike three!) before they’re “out.”

Ending the supplementals would be like giving the batter just one strike. By combining all defense spending into one (larger) appropriation each year, the batter has just one swing — miss the first time, that’s it. The practice would force Congress to make hard choices that prioritize the war-fighter. Who wants to be the representative that adds defense pork to a bill at the expense of our fighting soldiers’ needs? And with no hope of getting additional money later in the year, it would begin to create a culture of efficiency and discipline in spending priorities.

Ultimately, Afghanistan will be funded. Having a single defense budget minimizes divisive political bickering and prioritizes the war-fighter. That’s a real win-win.

Marshall to Testify Before National Commission on Fiscal Responsibility and Reform

Wednesday, June 30th, 2010
Steven Chlapecka



Steven K. Chlapecka is the director of public affairs for the Progressive Policy Institute.

by Steven Chlapecka

NEWS RELEASE
FOR IMMEDIATE RELEASE
June 30, 2010

PRESS CONTACT:
Steven Chlapecka—schlapecka@ppionline.org, T: 202.525.3931

PPI President to Offer Recommendations on Curbing National Deficit

WASHINGTON, D.C. – Will Marshall, president of the Progressive Policy Institute, will testify today at 2 p.m. before the National Commission on Fiscal Responsibility and Reform during the commission’s first public listening session. Marshall will urge the commission to carefully examine national spending and create an ambitious but attainable fiscal target to address the United States’ mid- and long-term deficit challenges. The commission’s listening session live webcast can be viewed at http://www.whitehouse.gov/live.

“There is a common assumption in Washington that you can either have a fiscally responsible government or a progressive government, but you can’t have both,” said PPI President Will Marshall. “But, I’ve always rejected this assumption as a false choice. A progressive government can and must live within its means. It’s not really progressive if it chases the illusion of borrowed prosperity.”

The bipartisan National Commission on Fiscal Responsibility and Reform, created by President Obama to address our nation’s fiscal challenges, is charged with creating a plan after the midterm election to start unwinding America’s massive debt.

“We are looking for ideas,” said Commission Co-Chairman Erskine Bowles opening the commission’s third meeting on June 30, 2010.

Marshall is a member of the Brookings-Heritage Fiscal Seminar, a nonpartisan group of 16 federal budget and policy experts and frequently writes on the need to control the large and growing federal debt.

For further questions, please contact Steven Chlapecka at schlapecka@ppionline.org, 202.525.3931 (office), or 202.556.1752 (cell).

# # #

Marshall’s testimony as prepared for delivery.

Ancient History

Friday, June 25th, 2010
Elbert Ventura



Elbert Ventura is the managing editor of the Progressive Policy Institute.

by Elbert Ventura

Bruce Bartlett has a column up in today’s Fiscal Times that drills home just how far the Republican Party has veered from the center over the last few years. Bartlett recounts the story of the 1990 budget deal, which saw President George H.W. Bush reach across the aisle and strike a compromise with Democrats in an effort to shrink the deficit. The compromise on Bush’s end is, of course, now legendary: a violation of his “read my lips” pledge during the 1988 campaign that there would be no new taxes.

Working with Democratic majorities in both houses, the president knew that getting through measures on the spending side of the ledger would require some concessions on his part. Bartlett sums up the outcome of the budget negotiations:

Budget negotiations finally concluded in late September. The final deal cut spending by $324 billion over five years and raised revenues by $159 billion. The most politically toxic part of the deal, as far as congressional Republicans were concerned, involved an increase in the top statutory income tax rate to 31 percent from 28 percent, which had been established by the Tax Reform Act of 1986. The top rate had been 50 percent from 1981 to 1986 and 70 percent from 1965 to 1980.

More importantly, the deal contained powerful mechanisms for controlling future deficits. In particular, a strong pay-as-you-go (PAYGO) rule required that new spending or tax cuts had to be offset by spending cuts or tax increases. There were also caps on discretionary spending that were to be enforced by automatic spending cuts.

The conservative base, of course, went ballistic. Their opposition was reflected in the House of Representatives, where 163 Republicans voted against the budget, while only 10 voted for it. The Senate was a little better — half of Republicans approved the deal. These days, getting half of the Republican Senate caucus to go along with anything the Democratic majority pushes would be a minor miracle.

The consequences of Bush’s budget deal are well known. The violation of his tax pledge would prove to be a devastating weapon for political opponents in the 1992 campaign. But the economic consequences are less heralded. President Clinton deserves credit for bringing sanity and surpluses to the budget in the 1990s, but budget experts agree that his predecessor’s budget deal contributed to that achievement.

Bartlett quotes the GOP’s tax-cutting commissar, Grover Norquist, to underscore conservative suspicion of budget deals: “Budget deals where they actually restrain spending and raise taxes are unicorns.” Only spending cuts, Norquist argues, are permissible. The way the right is moving these days, we’re more likely to see a unicorn than a GOP leader going against party orthodoxy on taxes.

Photo credit: sdk

Follow the Leader

Wednesday, June 23rd, 2010
Will Marshall



Will Marshall is the president of the Progressive Policy Institute.

by Will Marshall

Congress isn’t always the first place you look for intellectually honest discussion of America’s fiscal dilemmas. Neither party has clean hands, yet each points smudged fingers at the other. How refreshing then to hear Rep. Steny Hoyer (D-MD) uttering blunt truths rather than partisan cant about America’s exploding debts.

“Unfortunately, we can blame our long-term deficit on policies that are almost universally popular,” the House Majority Leader said yesterday at a forum hosted by Third Way. “We’re lying to ourselves and our children if we say we can maintain our current levels of entitlement spending, defense spending, and taxation without bankrupting the country,” he added.

Hoyer also wondered aloud about the wisdom of permanently extending any of the Bush tax cuts absent a serious plan for long-term deficit reduction. It’s a pertinent question for both Republican anti-tax zealots and President Obama.

Even as they excoriate Obama and the Democrats for ballooning the federal deficit, Republicans insist that all the tax cuts passed in 2001 and 2003 be extended. That would cost a cool $3 trillion over the next decade, but don’t expect the GOP to fill that gaping hole in the federal budget with spending cuts. As Hoyer pointed out, Republicans have run like scalded dogs from Rep. Paul Ryan’s “roadmap” to a balanced budget, which calls for deep cuts in Medicare and Social Security.

But President Obama is in a bind as well. He has set up a fiscal commission to come up with a plan after the midterm election to start unwinding America’s massive debts. Many economists believe such a plan is essential to boost investor and lender confidence in the soundness of the U.S. economy, and to reverse the enormous imbalances in world financial flows.

During the 2008 campaign, however, Obama promised to extend the Bush cuts for the “middle class,” which he defined as families earning less than $250,000 and individuals earning less than $200,000. That promise helped him deflect GOP efforts to brand him as an inveterate tax hiker. But it carries a high price tag: about $1.4 trillion over the next decade according to the Joint Committee on Taxation.

What’s more, the nation’s fiscal outlook has deteriorated dramatically since the campaign. Massive public spending to avert a financial and economic collapse last year could push this year’s deficit to a record $1.7 trillion. The national debt now stands at about $13 trillion, and is on course to reach 90 percent of GDP by 2020 – not far from Greek-style proportions.

America really can’t afford any of the Bush tax cuts right now. Letting them expire would give the fiscal commission more room to devise a balanced package of spending and tax reforms aimed at whittling down our debts.

But with unemployment stuck in the stratosphere, and with Democrats apparently facing sizable losses in the midterm election, it’s hard to ask them to expose middle-class families to higher taxes – especially when Republicans can be counted on to indulge in monolithic, over-the-top demagoguery.

GOP Senate Minority Leader Mitch McConnell wasted no time in unloading on Hoyer yesterday. “It’s now official. Top Democrats on Capitol Hill are starting to signal their intention to raise taxes on the middle class,” he declared on the Senate floor.

To limit the long-term fiscal impact, centrist Democrats like Hoyer are considering a temporary extension of the middle-class tax cuts. Many liberals, however, are more concerned about the supposed dangers of “austerity” than the nation’s colossal debt burden. In fact, they want to make the cuts permanent now, while Democrats still enjoy big majorities in both Houses.

So chances are Congress will extend the middle-class tax cuts this fall, setting a less-than-inspiring example of restraint for the fiscal commission.

Nonetheless, Hoyer said House Democrats are pushing a budget resolution that would limit discretionary spending; cut deeper than the president’s budget; reinforce PAYGO rules; and commit to a vote on the fiscal commission’s recommendations. It’s a modest down payment on fiscal reform that’s unlikely to suppress demand and throw the economy into a tailspin.

In any case, the contrast between Hoyer’s fiscal realism and the GOP’s denial couldn’t be sharper. Let’s hope Democrats follow their leader.

Photo credit: Center for American Progress Action Fund

On Fiscal Reform, Can Pragmatists Trump Ideologues?

Monday, June 21st, 2010
Elbert Ventura



Elbert Ventura is the managing editor of the Progressive Policy Institute.

by Elbert Ventura

In a piece published this Sunday, Edmund L. Andrews and Eric Pianin serve up a profile in Fiscal Times of an odd couple who will be crucial to the effort to restore fiscal sanity to the country.

On one side is Andy Stern, labor firebrand and former head of the Service Employees International Union, the nation’s fastest-growing union. On the other is David Cote, chairman and CEO of Honeywell, a global technology firm. Both are members of President Obama’s deficit commission tasked with issuing recommendations to address the nation’s fiscal crisis. Both consider themselves pragmatists who believe they can bridge the partisan gap and help engineer lasting solutions to our budget problems.

But even the appearance of comity can’t hide the basic ideological differences between the two sides:

Cote emphasizes that economic growth is the key to fiscal stability, and Stern politely contends that it’s unrealistic to bank on economic growth alone as the solution. “There are some people who say, ‘Let’s grow our way out of it,’ ” Stern said. “Okay. Tell me how much growth we’re going to need? Has it ever happened before?”

The subtext of their exchange is clearly about the broader clash. Republicans warn that higher taxes will imperil economic growth and focus on the need for spending cuts. Democrats argue that some of the biggest GOP targets — safety-net programs — need to be protected and that deficits are too big to be closed without at least some tax increases.

That elemental difference looms in the background of any feel-good story of bipartisan agreement on fiscal reform. It would be tragic if the commission’s work and the administration’s efforts to forge a consensus on budget reform crash on the shoals of ideology. Everyone can agree that the country is on an unsustainable path. What everyone should also be able to agree on is the need for reform on both sides of the ledger. New streams of revenue need to be found. Entitlement reforms need to be made. And yet denial prevails over too many folks on both sides of the ideological divide.

Stern has a good record of reaching out to unlikely allies — see his work with Wal-Mart and the Business Roundtable on passing health care reform. But even his efforts might fail in the face of calcified dogmas and a lack of urgency among political and policy elites. How the commission’s efforts play out — it’s aiming to release its findings in December — will be one of the most compelling policy dramas in the coming months. Stay tuned.

Photo credit: Center for American Progress Action Fund

Cutting the Tether Webcast

Monday, June 7th, 2010
Steven Chlapecka



Steven K. Chlapecka is the director of public affairs for the Progressive Policy Institute.

by Steven Chlapecka

Cutting the Tether: Enhancing the U.S. Military’s Energy Performance

Event Webcast – May 13, 2010

Featured Speakers:

Sen. John Warner (R-VA), Ret.
Rep. Tom Perriello (D-VA)

Panelists:

Vice Admiral Dennis McGinn, Ret., CEO, RemoteReality
Colonoel Paul E. Roege, Army Capabilities Integration Center
Richard Goffi, Principal, Booz Allen Hamilton
Chris Myers, Vice President of Government and Energy Programs, Lockheed Martin

Moderator:

James Morin, Esq., author, “Cutting the Tether”