Ending Earmarks: Symbolism, not Solutions

If only lobbyists were so forthcomingThe House Democratic Leadership announced today that it would stop accepting earmarks for private companies.  While public agencies and non-profit companies will still be eligible for earmarked funds, the rules change by the Democratic leadership of the House Appropriations Committee will prevent corporations from lobbying Congressman for no-bid contracts and directed pork.  The change is so unequivocally positive that rather than spin the decision the Republicans attempted to one-up the Democrats by banning earmarks entirely in their caucus.  My support for such a change- and I agree with the Republicans that it should be a blanket ban- stems from my belief that the politics of financial quid pro quo have a deleterious effect on the quality of our Congressmen.  Anything that takes away the ability of Congressmen to graft under the the noise of Congressional business is a positive development.  My deep concern over the federal deficit, however, does not figure into my consideration of this change, because banning earmarks will do almost nothing to shrink the deficit.  According to the Appropriations Committee, if their proposal had been in effect in 2009 it would have saved the federal government $1.7 billion.  In other words, this proposal would have fixed .12% of the deficit ($1.412 trillion last year).  

Congress wastes vast amounts of money because taking a dime here and there from every American won't spark any outrage, but will add up to millions for the well-connected few.   In the grand scheme of things however, this is chump change.  Non-discretionary spending in defense and entitlements make up over 65% of government spending and while it is within Congress's power to reform these sectors, it has learned that it's a lot easier to bluster than to dig into that shit-pie.  Both parties have learned the hard way that cutting military spending is caricatured as "soft on defense" and changes to entitlements don't play well with the largest pool of voters in the country: the retired.  

A notable exception to this "see no evil" approach to the items that actually make up the majority of government spending is Representative Paul Ryan's Budget Proposal.  Designed to balance the budget and pay off all federal debt by 2080, Mr. Ryan's proposal came under withering fire today when it was revealed that its revenues figures were exaggerated and insufficient to balance the budget.  However, the revenue side of his plan never seemed interesting before the controversy and his response that the actual percentages could be tweaked to hit his historical revenue target of the  19% of GDP seems fair.  The expenditures side is the real horror story, revealing the bloody work necessary to restore fiscal balance without increasing revenues.  Ryan advocates eliminating Medicaid and Medicare in favor of insurance vouchers that aren't indexed fully to inflation; meaning the fundamental problem of medical care growing more expensive at a rate so unsustainable that it threatens the entire federal balance sheet is solved by making the old and the poor pay for the difference by themselves.  It is cruel medicine, especially when understood in the context of Mr. Ryan's real goal: balancing the budget without soaking the rich.  The next time entitlement reform is bandied about as a no-brainer, remember that it actually just solves a problem by undoing the solution to the last problem: we couldn't afford to care for the most vulnerable, so we just stopped.

If Mr. Ryan's idea is not the solution to our budget problem, then we will have to find another.  The White House Office of Management and Budget estimates that by 2015 over $570 billion a year will go to servicing federal debt.  That's like giving away the entire economy of Pennsylvania every year.  It's a real problem, and it deserves adult scrutiny.  Restoring fiscal balance will probably require some combination of deep defense cuts to near the level of the Clinton years, entitlement reforms perhaps including an increased retirement age (perhaps a retirement age that is indexed to increase with life expectancy?) and meaningful tax increases.  Pretending that earmarks address the problem is like someone facing bankruptcy offering to stop giving spare change to bums.  It's a good idea not to subsidize their addiction, but you're probably gonna have to make some harder choices too.