With Latest Budget Deal, More Failure By Design

Isaiah J. Poole

With Congress about to vote this week on a federal budget for the current fiscal year, perhaps we can be thankful that Tuesday’s Republican presidential debate spared us extended disingenuous talk about “out-of-control government spending.”

Some variation of that phrase still crops up in congressional Republican rhetoric (though not enough for the archconservative Heritage Foundation, which recently wondered “Why Isn’t There More Talk About Out-of-Control Spending With the Government Funding Deadline So Close?”).

There’s actually a good answer to that question: Government spending is not out of control. It hasn’t been for years. It’s the negative effects of not spending what we should that are threatening to spiral out of control. The budget that is likely to be sent to President Obama by the end of the week will do virtually nothing to change that.

That is the evil genius of how congressional Republicans have manipulated the budget process to serve their ends, even with President Obama in the White House. They have an ideological scorn for government in general, and a particular scorn for government programs that ask the haves to help the have-nots and that limit the ability of the super-haves to game the economy at the expense of everyone else. At a time when a weak, uneven economic recovery from the worst economic downtown since the Great Depression would have called for sustained heavy investment in the rebuilding of the economy, congressional Republicans have instead straitjacketed spending and sabotaged government functions.

Trillions In Perspective

Conservative critics like to scare with their recitation of trillion-dollar budget numbers, but the number that matters for perspective is budget spending as a percentage of the overall economy, or gross domestic product. The budget that is now being considered will make government spending just over 21 percent of GDP. That’s down from 24 percent of GDP in 2009, the peak of the Great Recession. Spending, as a percentage of GDP, is lower now than it was for all but the last year of the Reagan administration.

The fiscal 2016 deficit, meanwhile, is projected to be 2.5 percent of GDP, down from almost 10 percent of GDP in 2009 and below the average of 4 percent of GDP during the Reagan years.

When you look at discretionary spending – the portion of federal spending not driven by eligibility mandates, such as food assistance or Medicaid – the numbers are even more stark. “CBO [Congressional Budget Office] projects that in 2025, total discretionary spending will fall from 6.5 percent in 2015 to 5.1 percent in 2025. At this level, discretionary spending would be nearly 30 percent below its average over the last 20 years, and lower than it has been in any year recorded in its history,” said a report from a Washington budget organization – not the left-leaning Center for Budget and Policy Priorities but the Peter G. Peterson Foundation, the organization whose namesake has been a leader in stirring up budget spending hysteria.

But that includes defense spending. Take out defense, as the Economic Policy Institute did in a lengthy historical budget analysis it did in April, and the reality is that non-defense discretionary spending – what the nation spends on everything from public schools to job training, from underground water mains to air traffic control – is approaching a 55-year low.

Spending on programs to aid low-income people, though they are about one-fourth of the budget, bore two-thirds of the budget reductions in the framework used to finalize the 2016 budget. Block grant programs for housing assistance, health care and other social services, most of which came into vogue during the Reagan years and sold as ways to deliver aid more cost-effectively, have seen an overall cut of 37 percent since 2000 when inflation and population growth are taken into account, another CBPP report found – even as the number of people needing the services provided by these block grants have increased.

Government “Breakdown”

This is not so much a success story of fiscal probity as one of penny-wise, pound-foolishness. It’s a major contributor to what former Federal Reserve chairman Paul Volcker and political science professor Paul C. Light called in a recent report a “cascade of federal government breakdowns.”

While the report includes a scathing assessment of President Obama’s leadership, it also says that “Republicans have done everything in their power to undermine performance. They have never met a freeze or cut they could not embrace, they have repeatedly stonewalled needed policy changes, and they have made implementation of new programs as difficult as possible. The Republicans have cut budgets, staffs, and collateral capacity to a minimum, proving the adage that the logical extension of doing more with less is doing everything with nothing.”

People applying for Social Security benefits bear the consequences in the form of “cutbacks in staffing and field office hours” and “increasing wait times for appointments and hold times for SSA’s 800 number,” according to a report by the Center for Budget and Policy Priorities. Another CBPP report examined the damage done to the Internal Revenue Service, a favorite conservative ideological target. More than half of taxpayer calls to the IRS were left unanswered during the previous filing period, a number of IRS customer service offices have had to close, and there are far fewer enforcement officers available to catch tax cheats.

“Unfortunately, the Republican majority continues to disinvest in personnel and resources in agencies they philosophically don’t like,” Rep. Gerry Connolly (D-Va.) was quoted by Environment and Energy News on Wednesday as saying, in part responding to the fact that the Environmental Protection Agency would get $8.1 billion in the 2016 budget, effectively an almost 10 percent cut in funding from what it received in 2006 when inflation is taken into account. “We ought not to be running government that way. These are established agencies, and they need to be funded adequately. We’ve been starving [them] for the entire time they’ve been in the majority.”

But instead federal spending debates have all been hashed out in a frame of fiscal austerity that means that government cannot adequately serve the needs of its people. That inadequacy then becomes the fodder for the right-wing demands for more spending cuts (and tax cuts for the wealthy), schemes to privatize certain government operations, and punitive attacks on government workers who are expected to grin and bear it through salary freezes, benefit cuts, staff reductions and assaults on their right to organize.

Members of Congress who have been complicit in all of this have yet to pay the political price for what they have done. Neither have the Republican presidential candidates, none of whom have suggested they would do anything other than accelerate this cycle, making government breakdown worse. The Democratic presidential candidates scheduled to debate on Saturday should seize the opportunity to explain the truth of inadequate government spending and conservative sabotage, and challenge conventional wisdom with a vision of government that has the capacity to meet the needs of its citizens and lay the foundation for sustainable economic growth.

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