January 3, 2011
Pay/Go, Cut/Go, No GoBy Jerry Shenk
Among the most deceptive measures passed in the 111th Congress was the Statuary Pay-As-You-Go Act of 2010, or, in Washington vernacular, Pay/Go.
Democrats passed Pay/Go in February 2010 to convince Americans of their fiscal moderation while plotting to raise taxes and engage in more shameless spending.
Though they proposed to bypass Pay/Go within a week of its enactment, congressional Democrats and the White House told us that the bill established pay-as-you-go rules that would require legislation affecting mandatory spending to be "budget-neutral" -- in other words, that it would not increase the deficit.
The bill also directed the Office of Management and Budget to review enacted legislation to determine if president-ordered, automatic, across-the-board spending cuts would be required to bring the federal budget into balance.
In fact, the bill contained loopholes through which you could drive a dealer's showroom's worth of unsold federally subsidized Chevy Volts.
Pay/Go exempted major fiscal policy areas from the OMB's calculation to determine if offset is required, and it was not accompanied by a cap on discretionary spending.
The real impact of Pay/Go is unfriendly to taxpayers. In order to "balance budgets," Democratic and, to be fair, some Republican politicians never look for spending cuts. So as federal spending increases, these politicians assume that taxes will be increased to meet Pay/Go guidelines.
The bill did allow Democrats, especially Blue Dog Democrats, to cite their votes for Pay/Go as evidence of their fiscal responsibility. Only about half of the Blue Dogs got away with the sham. The rest were forced by the November general election to return to live as citizens among the taxpayers they betrayed.
Now, a new House Republican majority proposes changing Pay/Go to Cut/Go. Republican leadership is selling Cut/Go as a public benefit. Instead of assuming tax increases, Cut/Go would require that new spending be offset by spending cuts in existing programs and agencies. Tax increases will not be considered, they say.
It sounds good, but is it? Cut/Go implies new spending and maintenance of the spending status quo, only on different items. We're already spending too much. Why not adopt a policy of "No Go"?
William Voegeli of the Claremont Institute once wrote that "[l]iberals sell the welfare state one brick at a time, deflecting inquiries about the size and cost of the palace they're building[.]"
Dr. Voegeli is correct. But the Congress's infatuation with spending and the resulting problems with debt have not been the responsibility of only those generally viewed as liberals. The government didn't shrink during the Reagan years or following the Republican wave election of 1994.
Demolition of decades of bipartisan government brickwork is necessary.
Though a wrecking ball may be called for, razing the federal spending structure may be a political nonstarter. On the hopeful assumption that we have the time to dismantle government the same way it was built, perhaps incremental reduction of government to make it more efficient and less costly would be more palatable.
The American government has become so large that much of its civilian side has reached the point of negative returns. We've seen ample evidence that almost anything new government attempts will do more harm than good. Larger bureaucracies result in higher costs to taxpayers and consumers. Rules and regulations bring greater intrusions into our lives along with more restrictions on our freedoms. More costly regulation of businesses adds costs to the things we buy and results in shortages of products and services.
It's essential that we address Washington overspending and waste. Others have observed that America has a Department of Education that has never taught a single child a single fact, a Transportation Department that has never transported anything or anybody six inches, a Department of Agriculture that has more employees than America has farmers, and an Energy Department, established to make energy more available, that makes it less accessible and more expensive.
These are but a few of the top-heavy, overstaffed holes into which our government pours tax money. Most of us get nothing from them and would never notice if they were gone.
Responsible officials must exercise their responsibility for oversight, demand that every department in every agency make a public case for funding, and compare the functions of each to relevant private-sector equivalents to determine proper staffing and productivity standards. Supervisors' GS ratings can no longer be raised and their salaries increased based on the number of employees they supervise. The practice only encourages federal managers to slow down their staffs and create artificial backlogs to increase headcount. Clerks are clerks, and purchasing agents and customer service people do the same job everywhere, so staffing, federal agency salaries, benefits, and workloads must be brought into line with the civilian workers our federal employees significantly out-earn.
A more responsible Congress should control spending in Washington by continuously working to cut the size and cost of government. If the political courage doesn't exist on the hill to confront the problems, members of Congress could gain cover by establishing a commission or commissions much like the Military Base Closure Commission. These would investigate, by agency or by category of expenditure, at minimum, the redundancies in government agencies and programs and, preferably, the federal organizations that are not returning value to citizens. The commissions would submit their recommendations for combination or elimination to the Congress for an up-or-down vote like the Base Closure Commission has done. The Base Closure Commission's recommendations have some teeth, and real progress has been made to reduce installations the Pentagon found redundant. Why not apply that concept to the rest of government?
Competition increases choices, drives down prices, and improves services.
Government at all levels could save considerable amounts of tax dollars by eliminating labor-union-prevailing wage and work rule requirements for government projects.
Federal agencies should outsource jobs that are not inherently governmental. There is no reason to pay unskilled and semi-skilled laborers government-union salaries and benefits when private companies could a better job at less cost while stimulating Americans' entrepreneurial spirit.
These are only a few ways in which a new Congress can work to bring American finances and our economy back from the abyss. Republicans hold only one house in a single branch of government, but they can set the tone for 2012 by developing these concepts, among others, and forcing up-or-down votes on them in the House of Representatives. Spending bills originate in the House. The Senate can't pass and the president can't sign anything the House doesn't send either.
The new Republican House should begin to use their constitutional power of the purse to reduce government. If Republican House members wish to be credible, they must.