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InsiderOnline Blog: April 2006
Summer is approaching, and you know what that means: You'll soon be filling up your car with mandated summer blends of gasoline. Boutique fuels, however, are only part of the reason why the cost of gas is rising.
In a recent column, Heritage's Ben Lieberman explains the "jump at the pump" and what the federal government can do about gas prices--while adhering to the principles of a free market.
An abbreviated version of a post from today's Heritage Foundation Policy Blog. It's a round-up of everything that's happened today related to reining in federal spending:
Today's top news: President Bush issued a Statement of Administration Policy (SAP), or veto threat, on the spending bill:
[T]he Senate reported bill substantially exceeds the President’s request, primarily for items that are unrelated to the GWOT and hurricane response. The Administration is seriously concerned with the overall funding level and the numerous unrequested items included in the Senate bill that are unrelated to the war or emergency hurricane relief needs. The final version of the legislation must remain focused on addressing urgent national priorities while maintaining fiscal discipline. Accordingly, if the President is ultimately presented a bill that provides more than $92.2 billion, exclusive of funding for the President’s plan to address pandemic influenza, he will veto the bill.
And it gets better:
The Administration strongly objects to the $700 million included in the Senate bill to relocate the privately owned rail line that runs along the Mississippi Gulf Coast. The CSX Corporation, using its own resources, has already repaired damage to the line, and trains are now running. Relocating the tracks would represent a substantial investment beyond pre-disaster conditions and would improperly require U.S. taxpayers to pay for private sector infrastructure.
Senate Majority Leader Bill Frist was quick to praise the President's statement:
Families must live within their means, and so should Washington. I applaud the Administration’s determination to stick to true emergency spending, and will support a veto, if necessary, to keep federal spending under control.
So how does the SAP stack up? Really, it's quite good from a fiscal responsibility standpoint. First, it sets a solid, clear line on the total level of spending--Senators are now fully informed at what level the President will cut them off. Second, it directly hits several of the more egregious and expensive non-emergency projects stuffed into the Senate bill. As we wrote yesterday, what's in the bill matters as much as the total level of spending, and if an item does not address an emergency, it has no business being in an emergency supplemental and outside of the normal budget process, which is subject to caps and other procedural safeguards (weak as those may be). The President's SAP takes both of these points seriously.
With one exception. The Senate bill includes $2.3 billion for avian flu preparedness. This comes on top of $3.8 billion that Congress appropriated just four months ago, funding which will become available in August. From the White House's perspective, this additional appropriation brings the total close to what it had originally requested last year. And so the White House specifically exempts this addition from its SAP's veto threat. From Congress's point of view, this is an easy way to target a few more bucks where it may or may not be urgently needed without being subject to normal budget rules. Politically, then, this makes sense, but it reopens a slipperly slope because this funding doesn't really fit the "emergency" designation as well as the other items in the President supplemental request. A better response from the White House would be to insist that Congress balance this additional funding with offsets elsewhere in the budget.
Bush's action capped a busy day of action on the emergency supplemental.
Early in the day, Americans for Prosperity called on the President to act like a nanny for a misbehaving Congress:
Another season of the hit Fox show Nanny 911 will air this summer – and just in time for President Bush to watch. The President could learn a thing or two from the British Nannies about handling disobedient kids... errr.. umm I mean lawmakers.
What can nannies teach President Bush?
No means no. Yes means yes.
Actions Have Consequences
Good behavior is rewarded. Bad behavior comes with penalties.
Say What You Mean and Mean It
Think before you speak—or you’ll pay the price.
This legislation has become a fruit basket of spending unrelated to our war effort and Katrina, and I say plainly, ‘Mr. President, veto this bill.’
I think the Senate is taking the term ‘railroading the taxpayers’ a little too literally with this Railroad to Nowhere.
President Bush has been complicit in Congress’ spending spree for too long. He needs to tell us that he will veto the spending bill if we load it up with pork, and he needs to mean it.
Senators have gotten into the act, too:
“It’s time for fiscal responsibility in this town,” [Sen. John] Ensign said in an interview outside the Hart Senate Office Building yesterday afternoon....
“I do hope we can get [the supplemental spending bill] down to the president’s level,” said Sen. Sam Brownback (R-Kan.), who is both an appropriator and a colleague of Ensign’s on a task force of conservatives called the Fiscal Action Team.
Heritage president Ed Feulner lambastes the Railroad to Nowhere in the Chicago Sun-Times today. Conservatives in Congress are off-track, he writes:
Then again, a free-spending attitude is sadly common in Washington these days. But it didn't used to be, at least among conservatives. Back in 1993, Lott and Cochran helped defeat President Bill Clinton's ill-advised "stimulus" package, a $16.3 billion pork-barrel measure (ironically, almost the same amount that's been wastefully added to the current spending bill). "And where are we going to get the money?" Cochran asked Congress then. "We are going to increase the deficit, which requires the government to borrow more money and to pay more interest. That is not economically healthy, that is economically dangerous."
Back then, Republicans were the minority party in the Senate, and they hung together to fight for principles. These days, too many act as if big government is good government as long as it's "our" government -- a distinctly non-conservative and foolhardy position to take.
Calling the SAP "unusually blunt," today's New York Times reports that President Bush may be getting tough on policing Congress's spending problem:
With many grassroots conservatives up in arms over what they consider excessive growth in government spending under Mr. Bush, and with new scrutiny being applied to the pet projects lawmakers routinely insert into spending bills, the veto threat suggested that Mr. Bush wanted to strike a more assertive posture on the issue. He has issued only 27 veto threats since he took office in 2001 and has not actually vetoed a single measure, even though Congress has passed many bills that exceeded his budget requests.
Mark Tapscott writes: "It's good to see the White House weigh in on the right side." But he also wants to see the President "explicitly vow to veto the bill containing the controversial earmark."
In the Financial Times, the Club for Growth's David Keating says simply of the Senate bill, "This sort of nonsense is going to hurt Republicans."
Leadership may be in agreement on this. Reports Roll Call,
According to a GOP aide, Frist successfully argued that while “The POTUS isn’t on the ballot this year, a lot of our guys are, and marginal issues like this could be particularly important” in an election year during which Republicans are facing a threat to their majority.
(Size of government is a "marginal issue" for Republicans?! Oh, dear.)
NBC's Mike Viqueira reports that when asked yesterday what the GOP plans to do about its poor standing in the polls, House Majority Leader John Boehner replied, "Hold the line on spending."
Mark Steyn, however is still upset about the anti-porkbuster backlash:
"The Republican party," says Arlen Specter, "is now principally moderate, if not liberal" — and he means it as a compliment. "I'll just say this about the so-called porkbusters," chips in Trent Lott. "I'm getting damn tired of hearing from them. They have been nothing but trouble since Katrina."
Well, to be honest, I'm a good half-decade past getting damn tired of hearing from Trent Lott. But the difference is that, as a member of the pork-funding sector of the economy, I pay for him; he doesn't pay for me. . . .
Among the only people less than enthused about the veto threat is Sen. Thad Cochran, who told CQToday, "They're just wrong about it being a road to nowhere." He added, "Those who are criticizing it and making jokes about it are wrong." Of course, Cochran is a driving force behind the increased spending: according to Roll Call, he "recommended $4.6 billion of this increase himself." Sen. Pete Domenici was also dubious, telling CongressDaily, "I don't know if we'll be able to get it down to what [Bush] wants."
In the Washington Times, Heritage's Brian Riedl explains the budget process's role in the current controversy over the supplemental :
It's easy to blame lawmakers for avoiding difficult decisions. But when so many reformers "go native" after arriving in Washington, the larger problem becomes clear: The budget process itself makes it virtually impossible even for well-meaning lawmakers to restrain spending.
Indeed, the federal budget process, created 30 years ago, works to maximize spending. Unlike the 50 state legislatures, the federal government has no enforceable spending limits. This means lawmakers, who often spend days at a time listening to special interests plead for money, can simply add up every spending request and spend that amount without setting priorities and making necessary trade-offs.
Special interests will never cease pressing for more money. Lawmakers need a budget process that helps them say no.
Perhaps having decided to illustrate Riedl's point, Illinois Sen. Dick Durbin comes out in favor of earmarking:
As the first Illinois senator on the Senate Appropriations Committee in 35 years, Durbin said: "I have an opportunity to help the state. I do it with earmarks. They're very open. There's nothing secret or sinister about them. People know exactly what they're appropriating money for."
LaHood denies any connection between the earmarks he helped secure for local businesses and the fund raising their lobbyists did on his behalf.
"There is absolutely no link," LaHood said. "I help Caterpillar because they're the company in my district. I help Firefly because I think they have a very worthwhile research and development project going on. . . . Some of these hospitals that have benefited, I think we've benefited by the fact that they've been able to get some federal dollars.
"I've helped these organizations because of where they are. They're in Peoria. They're in my district."
NASA director Michael Griffin, whose organization received $568.5 million in earmarks last year, is not a fan:
The Growth of these Congressional directions is eroding NASA's ability to carry out its mission of space exploration and peer-reviewed scientific discovery.
"I feel about these earmarks the same way I always feel about earmarks," Griffin told reporters after the hearing. "Our budget is very limited. We have a strategy approved by Congress, and we can carry out that strategy . . . but every earmark, if it isn't coaligned with that strategy, is a fiscal distraction."
As far as the future, Griffin said he understood that "members have specific interests, and we try to work with members," but $568.5 million was a bit much. What would he like instead? "I would like it to be a lower number," he said. "This is not a hard problem, guys."
Former Delaware Gov. Pete du Pont is puts forward a six-point plan to get spending under control, much of it process-related. He argues that drastic steps are necessary beccause the GOP is losing the national electorate on fiscal issues: Contra recent Sen. Arlen Specter quotes, "It is not Republicans who are liberal, it is the current Republican government that is fiscally liberal and the biggest budget-busting federal spenders since the 1960s." A big part of his fix is cleaning up earmarks:
As a start it should adopt the proposal from Rep. Jeff Flake (R., Ariz.) that each earmark's sponsor be identified in the text of spending bills, and that a vote be allowed on specific earmark proposals. Congress should also establish term limits for Appropriations Committee members so that the congressional political establishment cannot go on swag-splitting forever.
In the Weekly Standard, Gary Schmitt introduces Zheng Bijian, the "intellectual midwife for 'peaceful rise.'"
The Chinese are big on slogans: "Four Modernizations," the "Three Represents," "One Country, Two Systems," and more recently, the "Three Transcends," "Building a Harmonious Society," and "Peaceful Rise." While they don't trip off the American tongue, they serve the same basic purpose as slogans from Madison Avenue. Except in Beijing's case, the product is not toothpaste, cars, or life insurance, but Communist party policies.
The intended audience is usually China's party cadres, government officials, and its billion-plus citizens, but not always. For three years now, in connection with the accession of Hu Jintao and Wen Jiabao to the government's top leadership positions, the People's Republic of China has tried to alleviate growing international concerns about its increasing economic, diplomatic, and military power with the policy slogan "China's Peaceful Rise." Recently China's propagandists revised it as "China's Peaceful Development" out of a concern that even the term "rise" might spook the Americans and China's own neighbors in Asia.
Either way, the point is that China faces a decades-long program of domestic development and simply can't afford getting into a great power struggle with the United States. Hence, Chinese foreign policy will focus on economic growth, soft power, and multilateral cooperation as a member of the World Trade Organization, the United Nations, and a variety of regional forums in Asia. Beijing might not always be willing to act in concert with the United States or its allies, but it will avoid, whenever possible, acting in direct competition. Or so the argument goes.
But with the spread of public courses accessible to regular Americans, golf has lost much of its elitist stigma, and presidents have indulged in it without shame. Bill Clinton was notorious for cheating, not in a ball-down-the-trouser-leg way, but in a brazen “That-shot-didn't-count-so-I'll-take-a-mulligan” way. Tom DeLay gave him a hard time for it. (So did the press. Corey Pavin won the US Open shortly after playing with Mr Clinton. Mr Clinton's spokesman quipped that “The president's pointers must have been pretty good.” A journalist asked: “So Corey took mulligans when nobody was looking?”)
The current golfer-in-chief is a risk-taker. George Bush “doesn't envision the terrible consequences that can come from trying to hit a ball 250 yards over a lake,” says Mr Van Natta.
Also, the current scandals embroiling the nation's lawmakers may place golf off-limits for savvy politicians.
In today's Christian Science Monitor, Dick Armey opines on the benefits of a flat tax.
Nine countries around the world are currently enjoying the benefits of a flat tax. A flat tax would allow a personal deduction for everyone so families could feed, clothe, and shelter themselves before paying the government. A family of four would get four such deductions. Any income anyone earned above that would be taxed at the same rate. No other exemptions. No loopholes. No mess. We could file our taxes in minutes.
One year ago today, the House voted to repeal permanently the death tax. Some time between the Easter recess and Memorial Day, the Senate will vote on permanent repeal.
A lot of people are talking about Thomas Sowell's Monday column on immigration. In the column he makes a key point about patriotic assimilation:
Immigrants in past centuries came here to become Americans, not to remain foreigners, much less to proclaim the rights of their homelands to reclaim American soil, as some of the Mexican activist groups have done.
In the wars that this country fought, immigrant groups were among the most patriotic volunteers, earning the respect of American citizens on the battlefield with their blood and their lives.
Today, immigrant spokesmen promote grievances, not gratitude, much less patriotism. Moreover, many native-born Americans also promote a sense of separatism and grievance and, through "multi-culturalism," strive to keep immigrants foreign and disaffected.
"The worst part about getting old is remembering when you was young," said Richard Farnsworth in David Lynch's 1999 movie, The Straight Story.
Farnsworth, however, neglects the economic implications of aging. In the latest issue of Policy Review, Nicholas Eberstadt writes on another problem of getting old: the effect an aging population may have on emerging markets.
The Wall Street Journal's editorial on the "Minority Maker," House Appropriations Chairman Jerry Lewis, explains the budget reforms that have stalled the House budget resoultion. Lewis and other chairmen object to modest budget reforms, namely providing the President with a line-item veto, earmark reform, and budgetting for emergencies.
Here's a seminal post on the emergency supplemental spending shell game on Heritage's redesigned Policy Blog.
The state Americans for Prosperity affiliates may not be hitting the road, but they are getting involved in pork-busting action. The Oklahoma affiliate of Americans for Prosperity has launched the Pulled Pork Project, "a true grassroots movement of taxpayers united in demanding an end to the practice of earmarking in Congress and wasteful, out-of-control spending at all levels of government."
One aspect of the project is the "Pulled Pork Petition," a pledge by which lawmakers could commit to fiscal responsibility.
Join the project here.
The countdown to tax day has begun. Taxes are due on April 17, except for those of us lucky enough to live in a place where Patriot's Day is celebrated. If that's the case, taxes are due on April 18.
With the deadline approaching, it's an opportune time to talk about tax hikes--something that will make most Americans cringe. But, a tax hike is in the offing if Congress doesn't extend the reduced rates on capital gains and dividends income.
In his recent column, Jack Kemp explains the necessity of extending these rates. He writes,
The surest way to harm the economy, slow our growth, raise unemployment and reduce revenues would be to allow capital gains and dividend taxes to rise to pre-2003 levels.
And by the way, the capital gains tax is not a tax on the rich, who are already rich; the capital gains tax is a tax on the poor and the workers who want to get rich. You can't get rich on wages. The only way to create wealth is to work, save, invest and make a profit, then reinvest.
If the Republicans in Congress can't articulate this essential ingredient of free enterprise and democratic capitalism, they should go back and reread Abraham Lincoln, Calvin Coolidge, John F. Kennedy and Reagan. Every cut in tax rates on the factors of production, i.e. labor and capital, has resulted in more economic growth and an increase in tax revenues.
We'll have to wait and see what the Senate and House conferees produce.
Senate Majority Leader Bill Frist has a different vision of constructive multilateralism. He submitted a resolution last week calling on the president not only to eschew a seat on the council, but also to "establish an effective human rights oversight body outside the United Nations system, so as to make it the primary means for examining, exposing, monitoring, and redressing human rights abuses throughout the world." Membership in this body would be limited to states with "a demonstrated commitment to the protection of human rights."
When the Senate passed its lobby reform bill, a number of voices, from lawmakers to citizen activists, complained that the bill did not go far enough. In a recent blog post, Richard Posner takes a look at campaign and lobbying reforms and finds that
government incompetence is better illustrated by the congressional reaction to the Abramoff scandal than by Congress's failure to enact "meaningful" campaign and lobbying reforms. An intelligent legislature, learning of a scandal, would first want to determine the likely frequency and consequences of such scandals and the adequacy of existing law to limit their recurrence. This inquiry would quickly reveal that Abramoff had pleaded guilty to criminal activity along with two congressional aides, that other members of Congress were under criminal investigation, and that an immensely powerful member (Tom DeLay) had been forced by the scandal to resign from Congress. The inquiry would further reveal that the scandal was actually an artifact of a surpassingly foolish law, namely the Indian casino law, which by conferring enormous rents randomly on Indian tribes had generated rampant rent-seeking, frequently shading into bribery. ..What the inquiry would not reveal would be a good reason for amending the lobbying laws.
Gary Becker responds to Posner here.
Teachers' unions make a habit of opposing innovation in education. They voice opposition to any deviation from the status quo, whether it's school choice or performance-based pay. In today's New York Times, Andrew Rotherham, a senior fellow at the Progressive Policy Institute, writes on the latest cause of the unions--opposing virtual charter schools.
A Wisconsin court rejected a high-profile lawsuit by the state's largest teachers' union last month seeking to close a public charter school that offers all its courses online on the ground that it violated state law by depending on parents rather than on certified teachers to educate children. The case is part of a national trend that goes well beyond virtual schooling: teachers' unions are turning to the courts to fight virtually any deviation from uniformity in public schools.
While virtual schools have there problems, Rotherham finds the union's "reflexive opposition" to any measure that empowers parents.
There is a universal American desire for customization and variety in goods and services, and education must respond to that demand, whether the unions like it or not.
Today the New York Times reports on the Washington, D.C. Opportunity scholarships, a school voucher program for low-income students.
For minority parents in Washington, the implications for national policy are distant ripples. For them, and for their children, vouchers offer a way out of one of the nation's most dysfunctional public school systems, and open a window into worlds that few would otherwise know.
In the April 10 issue of the Weekly Standard, Jeremy Rabkin weighs in on the debate over whether the Supreme Court should consider the decisions of foreign courts.
We in America, who have a better history, still have to face serious threats. We may overreact. We may make mistakes. But we have proven ourselves reasonably good at protecting individual rights while still defending the community that guarantees those rights. We do not rely on the United Nations for our security. To measure our constitutional standards by foreign opinion is to fall back on the false notion that the world at large is evolving toward better answers than we have or could find for ourselves. It is, in effect, to be defensive about being different. If we start thinking that way, we won't be Americans.
Yesterday, the American Conservative released its 35th annual ratings of Congress. ACU ranks members on 25 votes on a range of issues. Twelve senators received perfect scores, as did 38 House members. The ACU also tracks the worst members of both houses.
See the rankings here.
With federal outlays topping $21,000 per household, one might expect Congress to slow down spending by giving a pass to silly earmarked programs that accomplish little within the federal government’s responsibilities. Unfortunately, no. Citizens Against Government Waste (CAGW) today released its 2006 Pig Book, a 52-page compendium of almost 400 of the most egregious unnecessary federal expenditures. Sens. Tom Coburn and John McCain, as well as two pot-bellied pigs, appeared at the release.
CAGW president Tom Schatz recited a litany of cringe-inducing projects from the book, including $1 million for the “Waterfree Urinal Conservation Initiative,” $500,000 for the Sparta Teapot Museum in North Carolina, and $500,000 for the Arctic Winter Games, “a high-profile circumpolar sport competition for northern and arctic athletes.”
Sen. McCain then took the podium and called the crowd to action. After a few words on those hogging the government pork, most notably the state of Alaska (which incidentally has embarked on a major advertising campaign to convince the lower 48 that its not the recipient of disproportionate federal largesse), he talked up his activities with the Senate Fiscal Action Team and spoke of the need for reforms to the earmarking process.
Sen. Coburn denounced earmarks as a “gateway drug to overspending,” “a mortgage on…children’s futures,” and a “symptom of a very serious disease, and the disease is short-term thinking.” (All true!) He proposed making bills available for study earlier before votes so that senators could “know what’s in the bill.” No great surprise, even this modest and reasonable measure has run into stiff resistance.
Will there be serious reform this year on earmarking? We’re tempted to say it’s as likely as seeing pigs fly. But who knows, perhaps that will be part of next year’s festivities.
(Photos by Kale Bongers)
Tomorrow afternoon the Ethics and Public Policy Center is hosting an event on the U.N. Human Rights Commission with Nile Gardner and Joe Loconte. Gardiner is a fellow of the Margaret Thatcher Center for Freedom at Heritage, and Loconte, currently a senior fellow at the EPPC, is the former William E. Simon fellow at Heritage.
"The Striking Idiocy of Youth"--That's what Theodore Dalrymple sees in the latest French riots. He writes in the London Times,
Whether they know it or not, the people on the streets in France were demonstrating to keep the youth of the banlieues — who recently so amused the world for an entire fortnight with their arsonist antics — exactly where they are, namely hopeless, unemployed and feeling betrayed. For unless the French labour market is liberalised, they will never find employment and therefore integration into French society. You have only to speak to a few small businessmen or artisans in France — the petits bourgeois so vehemently despised by the snobbish intellectuals — to find out why this should be so. The French labour regulations make employment of untried persons completely uneconomic for them.
And, the French story has its lessons for England as well, Dalrymple explains.
[T]hree disturbing trends now underway in Europe together represent the greatest erosion of democratic practice in the world's advanced democracies since 1945. First, anti-Nazi laws are being adopted in places where neo-Nazism poses no serious threat. Second, speech laws have been dramatically expanded to sanction speech that "incites hatred" against groups based on their religion, race, ethnicity, or several other characteristics. Third, these incitement laws are being interpreted so loosely that they chill not just extremist views but mainstream ones too. The result is a serious distortion and impoverishment of political debate.
Sadly, many international organizations--such as the UN Human Rights Council and Amnesty International--support limiting speech.