Our Long National Austerity Nightmare Is Over
“With the 2015 budget request,” The Washington Post reported last week, “Obama will call for an end to the era of austerity that has dogged much of his presidency.”
Well, it’s about time! The end of austerity cannot come soon enough, as far as your humble correspondent is concerned. And a quick look at the historical budget tables shows why: In 2008, the federal government spent just a hair under $3 trillion. After six years of President Slash-and-Burn, spending has shrunk to almost $4 trillion. If we keep cutting like this, it will be down to $5 trillion before you know it.
These savage reductions have taken place in nearly every major federal program. Take defense spending: The year before Obama took office, it stood at $594 billion. It’s now $597 billion. Back in 2001 it was almost $300 billion. Even if you adjust for inflation, it’s clear that defense spending has shrunk at an alarming rate.
Same deal for food stamps: Under President Barack Obama, spending on the Supplemental Nutrition Assistance Program has gone from $40 billion to $78 billion, in constant dollars. And that’s after it went from $20 billion to $40 billion under Obama’s predecessor, George W. Bush. Spending cuts like that are simply barbaric.
But they are par for the course. Using inflation-adjusted, 2012 dollars, federal spending on K-12 and vocational education has gone from $41 billion in 2002 to $100 billion in 2012. During the same period, Medicare spending has gone from $293 billion to roughly $500 billion. Transportation spending? It went from $86 billion to $138 billion. Medicaid and related programs? $223 billion to $327 billion. Energy? Half a billion to $9 billion.
If we keep hacking away at federal spending like this, pretty soon we won’t have any federal government left! No wonder the economy has been so sluggish: We obviously need more stimulus.
Clearly, trends like these cannot go on. You can’t cut your way to prosperity; America needs to be building up, not tearing down. We need more investment in basic research — research like an important new project being funded by the Fish and Wildlife Service, which is giving $175,000 to a grant recipient who will use the money to study “the Swimming Abilities of Native Stream Fishes in the Northern Rockies-Upper Great Plains Regions of Montana.”
Studying the swimming abilities of fish is precisely the sort of research the federal government is best at. But if we don’t wise up and start spending money faster, we might have to do without it. Then where will we be?
It’s not just America. There has been a lot of austerity in Europe, too. Just ask Paul Krugman, the great economist who writes for The New York Times. “You see,” he patiently explained last week, “some but not all members of the euro area … were forced into imposing Draconian fiscal austerity” during the recent economic downturn — the results of which were “nasty, in some cases catastrophic, declines in output and unemployment.” (Krugman has been explaining this patiently for some time. In his 2012 piece on “Europe’s Austerity Madness,” he pointed out that “with erstwhile middle-class workers reduced to picking through garbage in search of food, austerity has already gone too far.”)
Just how bad has the European austerity been? According to a piece in the Financial Post last May, in 2007 government spending consumed 45.6 percent of the GDP of countries in the European Union. By 2012, that percentage had shrunk to a shockingly low 49.4 percent. No wonder the economy over there stinks.
Clearly, we cannot allow any more of those darn foreigners to enter America and bring any of that austerity nonsense with them. Unfortunately, we are going in the wrong direction on border control, too. A decade ago, we had almost 10,000 border-patrol agents. Now we have more than 21,000. Border fencing, meanwhile, has increased 370 percent. Deportations are at an all-time high. It’s like we don’t even care about sealing the border any more.
One more data point should clinch the case: In January 2013, The Washington Post reported that “Congress funded Customs and Border Protection at $11.7 billion — 64 percent more than FY 2006 and $262 million more than in FY 2011, despite the new climate of austerity.”
Yes, the new climate of austerity. Thank heavens we’re putting an end to that.
The Progressive Mirage
Progressive America is crestfallen. It had hoped for better things from President Obama, and he has not delivered.
Obama is the “Inaction Hero,” writes John Dickerson in Slate, who detects a “lack of ardor” in the Oval Office. He laments that “the president seems content with tending the store.” In The Washington Post, E.J. Dionne looks plaintively for “More Hope in Year Six?” In National Journal, Norman Ornstein explains “How Obama Can Save His Presidency (Or Not).” In The Atlantic, Conor Friedersdorf writes about “The Decline and Fall of ‘Hope and Change.’ ”
The disillusionment extends beyond the punditocracy: In Chicago, community activist Mark Carter advises Obama to “just quit. Because if this is what you call helping us, then just stop helping us.”
How times change.
Six years ago Obama was greeted as a messiah. The Seattle Post-Intelligencer described him as “the country’s hope, the kind of promising, intelligent leader who comes along perhaps once in a generation.” To the Toledo Blade, he was comparable to Lincoln, JFK, and FDR. The Los Angeles Times described him as “a constitutional scholar” who “has articulated a respect for the rule of law and the limited power of the executive.” The Detroit Free Press considered him “a disciple of the pay-as-you-go approach to federal spending that helped produce a budget surplus in the ’90s.” NBC’s Tom Brokaw compared his inauguration to the Velvet Revolution in Czechoslovakia, when “the streets were filled with joy. … People have been waiting for this moment.”
Obama did not exactly try to modulate expectations with humility. His coronation as Democratic nominee, he said at the time, marked the moment “when the rise of the oceans began to slow and our planet began to heal.”
Honeymoons fade, and every hero becomes a bore at last. Obama has fallen to Earth with a harder thump than most.
Granted, between the botched rollout of Healthcare.gov and the Edward Snowden revelations, the president had a rough year in 2013. But this gloss treats Obama like the poor schlimazel who goes to a restaurant and gets a lapful of soup from the waiter. It ignores his complicity in his own misfortune. The Obamacare website was his administration’s handiwork — as were other failed aspects of the law. Edward Snowden would have had much less to leak if the president had put an end to dragnet domestic surveillance, as he had promised to do.
Some of the president’s defenders have tried to portray him as the victim of an intransigent Republican Congress. Republicans have indeed been unhelpful. Yet the president can do a great deal without Congress. The NSA is an executive agency, after all. It answers to him — or ought to. By the same token, it is not Republicans’ fault that Obama has created the most secretive administration in memory and prosecuted more whistleblowers than all other presidents combined. It is not Republicans’ fault that he has violated his own expressed standards for military intervention abroad. It is not their fault he became what a writer for Salon has called “a civil libertarian’s nightmare: a supposedly liberal president who instead has expanded and fortified many of the Bush administration’s worst policies.”
In any event, Obama was supposed to transcend partisanship: “More than any other candidate, I could bridge some of the partisan, racial and religious divides in this country that prevent us from getting things done,” he told the Houston Chronicle in 2007. “Washington is broken,” he said the next year. “My whole campaign has been premised from the start on the idea that we have to fundamentally change how Washington works.”
That certainly went well, didn’t it?
The exospheric expectations for Obama seem odd for progressives, who tend to prefer “people’s history” — history as the tide of mass movements, history as “history from below” — over great-man theories in which transcendent individuals steer the course of the world.
The dashing of those expectations also ought to serve as a cautionary tale. The vast gulf between the imagined Obama presidency and the actual Obama presidency should leave progressives wondering what a future Democrat might do in the Oval Office. Do they really expect another president to govern more liberally? To show more regard for the Constitution, for civil liberties, for executive restraint? Do they think some other Democrat could surpass Obama?
Apparently so. Though for now she says she will not run, Elizabeth Warren has become the new Obama. “Liberals are fawning over Warren,” observes The Washington Post. According to The New Republic, she inspires “an almost evangelical passion.” The Daily Beast says she is “a candidate who can inspire passion and embody fundamental change.” And so on.
Like a mirage in the desert, the great liberal hope always lies just over the horizon. Yes, this one has been a great disappointment. But next time! Next time …
Christie vs. Obama: Dueling Apologies
A well-done little mashup here.
The Burned Hand Teaches Best
The federal government of the United States has treated native American Indians abysmally throughout much of the nation’s history. Recently, it has been adding another sad chapter to the anthology of abuse. Virginians should pay attention, because the story has important implications for the debate over expanding Medicaid.
The Washington Post reported the tale shortly before Christmas. D.C. has contracted with hundreds of Indian tribes to provide medical services on reservations across the country. But then, claiming to be constrained by tight budgets, the Bureau of Indian Affairs and the Indian Health Service soon began to refuse to pay what they owed. They reneged on the deal not once, but repeatedly — year after year.
The consequences have sometimes been grim: In Nevada, for instance, the downgrading of a hospital to a sometimes-closed health clinic meant “pregnant women were sent off by ambulance, at times giving birth along the side of the road. Elders died before they even reached” other hospitals several hours away. The emergency room closed. Funds for specialized treatment now go for triage.
The tribes sued for breach of contract, and the Supreme Court said they were right: “The government is responsible to the contractor for the full amount due under the contract,” the high court ruled. “This principle safeguards both the expectations of government contractors and the long-term fiscal interests of the United States.”
After the ruling, the agencies repaid some of the money owed. But then, reports the Post, “agency officials began questioning the accuracy of their own calculations of what they owed the tribes.” And they still claim they simply don’t have the funds to keep their word: “There is not enough money to go around,” an Indian Affairs functionary told Congress in November. The Obama administration sides with the agencies, not the tribes.
The implications for Virginia are obvious. Thousands of federal contractors call the state home, reaping tens of billions of dollars’ worth of business a year — second only to California in the value of federal government contracts. If Washington makes it a practice to renege on payments, the consequences for the private sector here would be enormous.
Then there’s Medicaid.
The Supreme Court’s 2012 ruling on Obamacare gave states a choice about whether to go along with expansion. Virginia continues to deliberate over the question. Gov.-elect Terry McAuliffe has been stumping for expansion; the Republican-controlled House of Delegates seems unlikely to go along.
A chief selling point for expansion advocates is the lure of ostensibly free money: Washington would pay 100 percent of the cost for the first three years, after which reimbursements would step down until reaching a 90 percent plateau in 2020.
Expansion skeptics warn that Washington might not keep that promise. Right now, there is no way to tell. But we do know this much: Nine out of 10 times, new government programs end up costing far more than original estimates projected. Current estimates say the federal government’s share of the tab for Medicaid expansion from 2014 through 2022 will come to $931 billion. If the cost is lowballed to even a small degree, then the feds will see more than $1 trillion in new expenses over the next decade.
By contrast, the federal government owes Indian tribes a comparatively paltry $2 billion or so. And that obligation is not merely statutory, but contractual. Yet even after Supreme Court intervention, Washington refuses to cough up the dough.
Shifting more of the cost of Medicaid expansion to the states would be well in keeping with Washington’s long-standing practice of taking all the credit for something — but little or none of the responsibility. A Congressional Research Service report says the cost of unfunded federal mandates imposed from 1983 to 1990 alone cost state and local governments at least $8.9 billion. Mandates the next year added at least $2.2 billion more.
By 1995, that problem had grown so acute that Congress, prodded by outrage from the hinterlands, tried to stop itself by passing the Unfunded Mandates Reform Act. Yet according to the National Conference of State Legislatures, Washington has passed numerous measures that flatly violate UMRA’s restrictions. As a result, from 2003 to 2008 “Congress … shifted at least $131 billion in costs to states,” it says.
If the federal government can ignore its contractual obligations, its own statutes and its own Supreme Court, then it certainly can ignore its own funding formulas, too. This doesn’t necessarily clinch the case against Medicaid expansion; it’s just one point among many. But it does suggest those hawking the promise of free federal money epitomize Samuel Johnson’s definition of second marriages: “the triumph of hope over experience.”
Game Theory and Beltway Gamesmanship
James Taranto makes a nice point about the budgetary stare-down in D.C.:
What we have here is not a hostage situation but a classic Prisoner’s Dilemma. If both sides cooperate, the result is unsatisfactory. if both sides defect, the result is catastrophic. An unsatisfactory result is far preferable to a catastrophic one. But the optimal result for each side is if it defects while the other side cooperates. Both sides therefore have an incentive to defect, so that the catastrophic outcome is a real possibility.
Explanation of the Prisoner’s Dilemma here.
PRESIDENT OBAMA proved himself a great segue artist Friday, as he smoothly glided from his previously unassailable position on the matter of surveillance to his new unassailable position on the matter of surveillance.
There is no moral high ground that he does not seek to occupy. As with drones and gay marriage, he seems peeved that we were insufficiently patient with his own private study of the matter. Why won’t the country agree to entrust itself to his fine mind?
What Can the President Do About Gas Prices?
Gasoline prices are skyrocketing, as many news reports attest. The stories blame a variety of factors for the uptick — from unrest in Egypt to rising summer demand. But, like the absence of Pierre from Sartre’s café, the stories hold a gaping absence in which something ought to be. That something? The sinister implication that blame should fall on the president.
Such an implication — if not the outright accusation — was rarely out of public view throughout the eight years of President George W. Bush’s stay in the White House.
A few years ago, House Minority Leader Nancy Pelosi fumed that Americans were paying a whopping $2.91 per gallon for gasoline. Denouncing the “record gas prices … and record oil company profits,” she blamed “President Bush, Speaker (Dennis) Hastert and the Majority Congress. … Big oil and gas companies wrote the Republican energy bill, and the American people paid the price.”
“(We) need a president who can stand up to Big Oil and big energy companies and say enough is enough,” declared Sen. Barack Obama.
“Today’s record-high gas prices are the price that the American people are paying for the Bush Administration’s failed energy policies,” agreed Sen. Hillary Rodham Clinton. Democrats demanded hearings — and, once Pelosi became House majority leader, got them. “Congress Grills Oil Execs on Record Profits,” ran the headlines.
Gasoline prices certainly did rise under Bush, soaring 180 percent from the day he took office to their all-time peak in July 2008. They plunged after that and, after adjusting for inflation, stood 9 percent lower when he left the White House than when he entered it. Since Obama took office they have doubled: Gasoline prices stood at $1.72 per gallon in January of 2009 and last month averaged $3.48.
Oil company profits have been humming right along, too.
You can’t expect Democrats to blast their own president for any of this. But what about the press? The Business and Media Institute, an arm of the conservative Media Research Center, analyzed coverage for two comparable periods of gas-price increases, in 2008 and 2011. It found the big three networks did more than twice as many stories on gasoline sticker shock in 2008 as they did three years later.
Well, maybe other stories were competing for attention in 2011, right? Fair enough. Yet consider this: Stories about gasoline prices mentioned Bush, the government or the president 15 times as often in 2008 as they brought up Obama or the government in 2011.
This is particularly striking when you consider the two administrations’ policies. The rap against Bush held that all he wanted to do was drill, drill, drill — an approach that would increase the supply of gasoline and potentially lower prices. Obama, on the other hand, insists “we can’t just drill our way to lower gas prices.” (Though he does say we can achieve the same result through proper tire inflation.) He has balked at approving the Keystone XL pipeline.
Before being appointed, Obama’s first Energy Secretary, Steven Chu, said, “We have to figure out how to boost the price of gasoline to the levels in Europe.” Yet when gas prices rise, none of this seems to merit even a mention.
If you think that difference in treatment arises from partisan or ideological bias, you’re right. Last year, The Washington Post noted that “Democrats in 2006 were more inclined to blame Bush for high gas prices than Republicans are to blame Obama now.” And the difference is more than minor: “73 percent of Democrats thought Bush could do something to reduce gas prices, while only 33 percent (of Democrats) think Obama could — a 40-point shift. By contrast, 47 percent of Republicans thought Bush could help bring gas prices down, compared with to the 65 percent who think Obama could — only an 18-point shift.”
In other words, if you ask someone whether the president can affect gasoline prices, Democrats are far more likely to change their answer depending on who occupies the Oval Office. And as everyone knows, liberal Democrats outnumber conservative Republicans in the media by a ratio of something like 8 gajillion to one.
Setting aside partisan politics, the truth is that the president really can’t do much to affect prices at the pump. More drilling — and good tire inflation — might make a marginal difference. Higher fuel-economy standards can help, too, although they create a boomerang effect (a lower marginal cost per mile encourages more driving).
On the whole, though, such policies don’t matter much when — as Obama has pointed out — the number of cars in China has tripled in just five years. The effect on global oil prices from soaring demand in China, India, and other emerging economies will overwhelm just about anything the U.S. can do at home.
That’s Econ 101 — and a lesson the media seem to have grasped. We’ll see how good their retention is the next time a Republican moves into the White House.