Is The Sledgehammer The Only Way To Cut Spending?

Remember when the federal government “cut” a measly $37 billion in spending in 2011 and Obama hailed it as the “largest annual spending cut in our history”? Apparently even those cuts were full of accounting gimmicks, like counting money for projects that were already finished or cancelled. My personal favorite:

At the Census Bureau, officials got credit for a whopping $6 billion cut, simply for obeying the calendar. They promised not to hold the expensive 2010 census again in 2011.

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Homeland Security Spending Sprees

When you give governments lots of money to spend, they usually find ways to spend it. This week we learned that the Department of Homeland Security is funding “microphone-enabled surveillance systems on public buses that would give them the ability to record and store private conversations.”

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Everyone’s A Rent-Seeker, Wind Edition

With all the discussion about the “fiscal cliff” and the big expiring tax cuts and all, some of the normal, smaller expiring things are getting lost in the shuffle… like, say, the $12 billion wind Production Tax Credit. Local St. Louis representative Scott Sifton explained on the radio the other day why he thinks renewing it “shouldn’t be a partisan issue.”

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In Which Republicans Continue To Impress Me

Rand Paul is filibustering the annual Defense Authorization Act to try to get a vote on his amendment to “give American citizens being held by the military rights to a fair trial.” Last year’s NDAA encoded “indefinite detention,” or the authority of the government to hold an American citizen indefinitely with no right to trial or oversight by the courts. Terrorist suspect or no, it’s (in my eyes) a clear violation of the Constitution and a dangerous authority to give a government that is always subject to the “oops cost.”

Paul just wants to explicitly state a common-sense protection for citizens. Harry Reid doesn’t even want to let the Senate vote on it. I’m not familiar enough with Congressional procedures to know how long Paul can hold it up or how likely he is to even get a vote on his amendment, much less get it passed, but man he sure makes me glad he’s in the Senate sometimes. It’s amazing what even one Senator can do to hold back the forces that would trample liberty.

Department of Everything

But Paul’s not the only Republican Congressman impressing me lately, and his influence seems to be spreading. A month after his charge that “not every dollar spent on the military is sacred,” Senator Coburn has released a new “Department of Everything” report that identifies “non-defense defense spending” in the bloated military budget. Some of the most ridiculous highlights:

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Running Out of Money to Help the Poor

Illinois Public Radio reports:

More than 150,000 college students were left without financial help this spring when Illinois ran out of money for MAP Grants…

…Illinois’ Monetary Assistance Program, or MAP, which provides financial aid grants to low-income students. The program ran out of money in March last spring, leaving about 150,000 students – half of all who applied – without help.

That number could grow – this year’s state budget cuts money for the grants by 14%.

Illinois has one of the worst if not the worst budget deficit in the nation, and it’s starting to reveal itself in cuts to public services. Liberals like to signal that they care more about the poor than conservatives, but it doesn’t matter how much the government cares about the poor if the government runs out of money.

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Kicking The Student Loan Bill Can

While everyone was focused on the Obamacare ruling this week, the other branches of government worked out their disagreements and passed a giant bill yesterday for funding transportation and student loans, among other things.

Before Obamacare reclaimed the headlines, we heard lots of fretting that the interest rate on federal student loans would double form 3.4% to 6.8% if Congress didn’t extend them by June 30. The news rarely questioned whether or not extending the lower rate was a Good Thing, because it is an unquestioned assumption that Subsidizing Education is a Good Thing, and that More Subsidizing is always better than Less Subsidizing.

Additionally, media reports often implied that this was an unprecedented thing, leaving out the important fact that the rates were only lowered from 6.8% to 3.4% five years ago as part of a “temporary” five-year deal. Even worse, some reports called the doubling “an automatic increase that Congress enacted five years ago to save money,” implying not only that the rate has always been at 3.4%, but that a stingy Congress actively decided to increase it in 2012. The truth is that the rate had been 6.8% for a long time, and Congress decided to lower it in 2007 but only made it “temporary” so they could say they were making things better now while saying it only cost X amount (instead of raising taxes or cutting spending somewhere to pay for it permanently, because that would require pain and sacrifice).

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One Router to Service Them All

Once upon a time, the government decided to pass a giant stimulus. It had a noble goal of creating jobs, stimulating the economy, and upgrading necessary infrastructure all at the same time. But when the government starts handing out money, people start lining up to take it.

In 2010, West Virginia received a “$126 million federal stimulus grant to expand high-speed Internet” across the state. They decided to spend about $24 million buying fancy Cicso routers for schools and libraries that cost $22,000 each. These high-end routers were built to serve college campuses handling hundreds or thousands of computers, but many of them are being put in small rural buildings with less than five computers – even some that have “just one computer terminal.”

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Current Level of Defense Measured in What?

I got a kind card in the mail yesterday from my House Representative Todd Akin, summarizing what he and Congress accomplished last year and asking me to fill out a brief questionnaire to record my opinions on a few political topics. I think it’s great that Akin wants to solicit the opinions of his constituents, even if he is in a reliably conservative district (Missouri #2) that votes him in with like 80% support every two years.

Of course, the questions are loaded to the point of hilarity. I felt like I was taking a Republican quiz. When asking “what steps should Congress take to improve and reduce unemployment,” the available answers were:

A. Spend more taxpayer money in another “stimulus” bill….. [ ] YES     [ ] NO

B. Empower the private sector by cutting taxes & reducing government spending….. [ ] YES      [ ] NO

The word “stimulus” is in quotes, suggesting that it’s not really stimulus, so obviously the correct answer to A is NO!  And line B contains nice buzzphrases like “Empower the private sector”… obviously the answer is YES. I’m not really opposed to these opinions, but couldn’t he have just asked two simple questions like “Should Congress increase spending?” and “Should Congress cut taxes?” I guess that might make it harder to guess the, ahem, right answer.

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The Solyndra Scandal And The Dangers of Government Lending

More information is coming to light about Solyndra, the much-hyped solar-energy company that got a loan of half a billion dollars from the federal government before declaring bankruptcy. The feds, hot off a raid of Gibson Guitar Company, have raided Solyndra’s offices. Megan McArdle highlights a few facts that suggest the possibility of scandal. At worst, the Obama administration loaned bad money at a suspiciously low rate to a politically-connected company so it could tout the creation of “green jobs” without any evidence that the company was at all sustainable. At best, the U.S. Department of Treasury’s Federal Financing Bank got unlucky on an investment decision.

Ugh. I didn’t even know we had a “Federal Financing Bank.” (I’m still unsurprisingly surprised every time I find something new that our government does or has done.) This sounds like a classic case of the negative consequences of government doing something it shouldn’t be doing. It’s one thing to spend money on research that will hopefully lead to public discoveries and benefits. It’s quite another to loan money to specific for-profit companies. I don’t know how this works on the budget, but I’m assuming the government was assuming they’d get their $535 million back, and now they won’t. If private banks didn’t see fit to loan them that much money at that rate, what makes the government smart enough to think it’s OK?

It’s bad enough that government just isn’t smart enough to do things like pick the best companies to loan money to. But when you allow that kind of power to elected officials, it inevitably invites corruption. Now we’re getting suspicious facts about the political connections of an investor, or the number of times somebody from Solyndra visited the White House. For now I’m willing to give them the benefit of the doubt. There’s not enough information yet to prove that there was corruption involved in the decision to give a giant low-interest government loan to Solyndra instead of, say, some other less lucky company. But I can say that similar situations involving the power of government officials in the past have led to decisions where corruption was involved. That’s just part of the way these things work, and the cost of corruption has to be considered in any discussion about the potential benefits of giving power to government officials to favor some people or businesses over others.

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End Aid To China. We Send Aid to China?!

They say that raw fraud and waste and inefficiency doesn’t make up a very large part of the budget. They say that all the easy low-hanging fruit has already been picked in the last couple years, and the only stuff left to cut requires hard decisions and painful sacrifices. But I sure keep getting surprised by stories of members of Congress trying to cut spending that I didn’t even know was happening. Here’s the latest:

WASHINGTON — A bipartisan group of senators is calling for an end to tens of millions of annual U.S. development aid to China, saying there are more needy countries than the world’s second-largest economy, which has trillions in foreign reserves.

The eight Democrats and four Republicans made their appeal Thursday to a Senate appropriations committee that must approve foreign aid funding for the fiscal year starting in October.

They urge an end to all development aid for China other than for Tibetans and for promoting human rights.

They say since 2001, the U.S. has provided more than $275 million in direct assistance to China, such as for expanding Internet access and improving public transportation.

If we’re still sending million of dollars to China to help them build roads or whatever – something we arguably shouldn’t have been doing in the first place – then I have to believe there’s still billions of dollars of easy cuts out there to horribly inefficient and unnecessary spending. (Also note that this one started when Bush was president.)

The irony with this one is that you could say the money we gave China probably came from China anyway. But the difference between this and China funding their own infrastructure is that we still have to pay the $275 million back.