December 22, 2010
The Legislative Branch has Become Poison OakBy Randy Fardal
Departing Senator Voinovich quipped that we could solve America's problems by blowing up the Senate. Perhaps the inspiration for that flippant remark came from President Obama's mentor and former Weather Underground leader, Bill Ayers. While it's tempting to agree with Voinovich, there probably are laws that prevent the rest of us from even joking about such things. Still, with all the debate over "gridlock" in the upcoming 112th Congress, it is quite enlightening to reflect on what the past two Congresses have wrought.
In Washington alone, there are hundreds of lawmakers, thousands of congressional staffers, and more than ten thousand lobbyists. Could society possibly be worse off if not one of them had showed up for work over the past four years? As a more civilized alternative to Senator Voinovich's metaphor, suppose instead that we had bussed our congressmen to Salinas in January 2007 and paid them to pick lettuce. Yes, the price of lettuce would be $50 per head, but what damages might America have avoided during that period?
As politician Al Smith liked to say, let's look at the record. Suppose Congress had not done the following:
--Blocked Bush administration attempts to head off the housing crisis
In 2008 alone, President Bush publicly called for reforms at least seventeen times before the Democrat-controlled Congress acted. Congress repeatedly denied there was a problem and thwarted all legislative attempts to avoid the ensuing economic calamity. Had the entire legislative branch spent the past four years as migrant farm laborers, perhaps the problems at Fannie Mae and Freddie Mac might have been corrected by executive orders before they and their Democrat enablers destroyed the U.S. economy.
--Approved the Federal Reserve Bank's monetary policies
Congress endorsed the Fed's bubble-bursting tight money policy throughout most of 2007, and they seemed content to let the monetary base stagnate during the months leading up to the 2008 election. Today, some Republican lawmakers want more congressional oversight of the Fed. But how would they prevent future Democrat-controlled Congresses from manipulating the money supply to help themselves or harm Republicans during the months leading up to their next election?
--Raised the minimum wage
In 2007, when the U.S. unemployment rate was hovering around five percent, the newly elected Democrat Congress passed legislation that mandated a big hike in the minimum wage. Virtually all competent economists warned that such increases put unskilled people out of work and keep them from getting on-the-job training they need to move up the economic ladder. Granted, many other factors also lead to unemployment, but today, about a third of young black males are out of work.
--Funded a "one-time" stimulus payment
Early in 2008, when it became clear that economic growth was slowing, the Democrat-controlled Congress mud-wrestled to see who could give away the most taxpayer money as a "one-time" $152B stimulus payment. How does the economy grow when Congress takes money from a carpenter who planned to buy a chop saw and gives it to constituents who spend it on pizza and beer? In the short term, the economy breaks even (at best) but, the carpenter can't frame a house with empty pizza boxes, so his future income stream is harmed.
As has been written before on these pages, policies that shift money from production to consumption reduce national wealth, weaken the nation's balance of trade, and cause inflation. Furthermore, whether Congress taxes money out of the economy or borrows it out of the economy, the money still comes out of the economy -- and it comes out today, not from future generations, as some argue.
--Passed "emergency" TARP legislation as the 2008 Democrat October surprise
A big chunk of TARP money went to automobile companies that would have been healthier now if they had gone through standard bankruptcy proceedings. And as has been reported recently, much of the TARP money apparently was misspent or lost to outright fraud. Some argue that TARP prevented bank runs, but that type of crisis typically can be handled much more quickly and impartially via monetary policy, not fiscal policies. For instance, the Fed concurrently spent 1.5 trillion dollars to purchase "troubled" mortgage debt. That alone might have avoided a banking system "liquidity trap," and the Fed did not have to give lawmakers billions of dollars of "sweeteners" (porcine bribes) to vote for its implementation.
--Flushed the 2009 economic "stimulus" funds down the toilet
The results are in: the net impact of the Obama stimulus was... zero. Well, except that now taxpayers are on the hook for another trillion dollars of national debt and interest payments, and there still are millions of overpaid public-sector union members that expect to retire with overgenerous pensions before they're 60.
Until Mr. Obama confessed that his "shovel-ready" projects were a myth, lawmakers argued that infrastructure expenditures are investments, not just pure consumption. That is plausible: Spend fifty billion on a new freeway and the economy gets back that investment, and more, with reduced future transportation costs. However, most infrastructure projects now require years of planning and regulatory approvals, so anything "shovel-ready" was budgeted long before Congress started dropping bales of taxpayer money from helicopters.
And since states actually fund most infrastructure projects, the federal money was used merely to reduce state and local government borrowing, as shown on the study's accompanying chart. Some of that taxpayer funding let state and local government employee pension plans avoid bankruptcy and postpone inevitable renegotiations.
--Gave away taxpayer cash for "clunkers"
Congress spent three billion dollars to subsidize the incremental purchase of approximately 56,000 new vehicles, at a taxpayer cost of about $50K for each incremental sale. In doling out the $3B, Congress also gave money to nearly 650,000 middle- and upper-class constituents who would have purchased a new vehicle anyway. Concurrently, it condemned 700,000 used cars to the crusher, thereby making used vehicles scarcer and more costly for low-income Americans. Does Congress really believe it is necessary to destroy wealth in order to save it?
--Nationalized Americans' health care
Despite all the wonderful promises, almost every argument in favor of the "Patient Protection and Affordable Care Act" turned out to be false. In fact, it will do what government interventions always do: reduce free-market competition, reduce the quality and quantity of services, and drive up costs. And, as with virtually all government programs, it will diminish individual freedom and prosperity while shifting even more money and power to selfish government lawmakers and bribable bureaucrats. Could anything possibly be more insidious for a society than that?
Three Branches of Government
The downside to Senator Voinovich's explosive fantasy is that it would transfer power from the legislative branch to the executive branch and government bureaucrats. But much of the legislation over the past four years already has abdicated that constitutional power voluntarily.
For instance, the 2.8-kilo-page health care nationalization act gives enormous power to the Department of Health and Human Services by repeatedly using the magic phrase "as the [HHS] Secretary shall determine." Until four years ago, such bribe-generating ambiguity was common only in banana republics. But in the few months since the bill became law, La Secretaria already has granted 222 Obamacare waivers to various organizations, including major campaign contributors. Likewise, the 2.3-kilo-page "financial reform" legislation requires at least 243 agency rulings over the next twelve years. Looks as though we're gonna need a lot more lobbyists with big bags of money.
And why waste time and billions of campaign dollars desperately attempting to get small majorities in both houses of Congress, when Democrats simply can toss the carbon tax hot potato to the Environmental Protection Agency for implementation? There must be at least 17,000 Democrats among the 17,384 EPA employees. No problem getting a Democrat majority there.
Most non-military government agencies will have overwhelming Democrat majorities among their bureaucrats, with unaccountable power for decades to come. Except for a few high-level appointments by elected officials, voters have no influence over them. Those highly partisan agencies need Congress for just one thing: money. In other words, the Constitution's three-branch government already has been corrupted by the enormous power granted to the permanent leftist bureaucracy.
Has Congress Harmed Only America over the Past Four Years?
Among the powers granted to it by Article I of the U.S. Constitution, Congress is required to do just one thing every year: pass a federal budget. Yes, the legislative branch also must handle extraordinary activities, such as ratifying treaties, amending the Constitution, and declaring war, but those occur only a handful of times per century. And yes, the legislature also is required to produce legislation, but the Constitution specifies no minimum number of laws it must pass every session, though the framers probably thought the optimal number was zero.
However, despite its constitutional mandate, Congress did not pass a budget this year, because passing one would have harmed Democrats' chances of getting reelected. As a taxpayer, what does that tell you? Technically, the federal government has been unfunded since October, but Congress has been extending last year's wasteful $3.62T budget. Its latest continuing resolution extended the budget from December 3 to 18. But rather than simply extending the deadline again, the Senate Democrats dropped an incremental 1.9-kilo-page, pork-laden 2011 spending bill -- aka the Omnibus Spending Bill, which died a well-deserved death when Leader Reid could not muster sixty votes.
Suppose lawmakers had extended the already-bloated $2.88T budget indefinitely in January 2007 and then left town for four years. Even if their absence had not prevented the Great Recession, total spending would have been $1.6T less. Assuming it costs about $10M to start and run a small business for four years, that extra $1.6T might have funded 160,000 productive businesses and millions of good jobs had it been left in the private sector.
Reviewing the record, there appears to be just one thing Congress did in the past four years that actually advanced America's interests: it funded the successful Iraq war surge. But House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid can't take credit for that because they both fought it.
According to a recent Rasmussen poll, "Voters (80%) overwhelmingly believe that most members of Congress are more interested in their own careers than in helping people. Just nine percent (9%) say they are more interested in helping those they represent." Perhaps it also shows that 91 percent of Americans could run Congress better than Nancy Pelosi and Harry Reid did.