Only to bureaucrats can the idea occur that establishing new offices, promulgating new decrees, and increasing the number of government employees alone can be described as positive and beneficial measures. -- Ludwig von Mises
During Tuesday night's presidential debate, Senator Obama claimed he will cut net federal spending if he is elected. An admirable pledge: with a $3 trillion budget there is a lot of waste and there are certainly duplicative programs that could be eliminated. But it is not clear how Obama would follow through on this pledge.
Back in July I blogged about this topic after I heard one of his advisors, Austan Goolsbee, make the same claim. I noted that the Obama campaign has provided much more public detail about how he would spend money than it has about laying out specific, verifiable savings that he would implement. National Taxpayers Union Foundation put together an analysis of each candidates' campaign promises regarding federal outlays. Obama's platform includes 80 items with a known annualized cost of $383.7 billion, 4 items to reduce spending ($90.7 billion), and 103 proposals with an unknown cost, for a net impact on outlays of $293 billion.
The largest savings we were able to verify was his plan to withdraw troops from Iraq and transfer 2 brigades to Afghanistan. Based on CBO figures, this could save $90 billion a year.
Some of his other proposals that could possibly lead to savings include:
*Cutting Medicare Advantage subsidies;
*Overhauling government purchasing;
*Getting rid of no-bid contracts;
*Reducing earmark spending and reforming federal contracting procedures;
*Reducing the growth in the federal travel budget;
*Streamlining the management of surplus government property;
*using purchase cards and the negotiating power of the government to reduce costs of standardized procurement;
*Auctioning surplus federal property;
*Reducing the erroneous payments identified by the Government Accountability Office.
Some of these ideas, such as earmark reform, are worthy "good government" initiatives, some, such as slowing the growth of a program, are gimmicky. But will they offset the new spending he has proposed? Doubtful. I wrote about some of this here, and more detailed information is available in NTUF's full analysis.
I will add, that for some of the proposals listed above, the federal government would likely have to increase spending to achieve the hoped for savings. For example, there has been a concerted effort, with varying degrees of success, over the last few decades to cut down on erroneous and fraudulent payments that are made by federal agencies. It is the goal, one would hope, of each and every elected official in Washington to cut down on this waste, but if doing so was easy, it would no longer be a problem. To make improvements on this front, it may be necessary to first go out and hire more oversight staff, invest in better training, or build a better system of electronic payment tracking.
For another example, earlier this year, the Congressional Budget Office looked at a bill designed to cut down on abuse of federal purchasing cards, S 789, and reported:
... [I]mplementing S. 789 would cost $85 million over the 2009-2013 period for agencies to conduct additional employee training and agency oversight, develop guidelines, and prepare additional reports ... Implementing S. 789 could improve agencies’ control of credit card usage, thus discouraging the fraudulent use of government cards and reducing wasteful and fraudulent purchases. The Government Accountability Office (GAO) recently reported that almost $17 billion is spent using government charge cards each year. GAO found that almost 50 percent of the government credit card transactions it reviewed failed to meet basic internal control standards, including ensuring that goods and services were properly authorized and actually received. To the extent that wasteful or fraudulent uses are discovered by implementing the procedures specified in S. 789, federal spending could decline, assuming that amounts provided in appropriation acts would be correspondingly reduced. However, the extent of improper usage of credit cards is undocumented, and CBO has no basis for estimating the potential savings from improved controls.
If this waste was completely eliminated, the savings would be less than the value of the earmarks that Obama dismissed as insignificant in comparison to the entire budget. But every bit of savings adds up and helps ease the burden on the taxpayers. Unfortunately, I don't see how Obama's numbers would add up to a net savings.
His record doesn't provide many details either about programs he would cut. NTUF's BillTally program tracks the outlay effects of legislation sponsored or cosponsored by each Member of Congress. BillTally data for the First Session of the 110th Congress shows that Senator Obama backed 111 bills that would increase spending, and 3 that would reduce spending. During the 109th Congress, he backed 83 increase bills, and 2 savings bills.
On Fox News, correspondent Major Garrett, who was covering the comments from the Obama campaign during the debate, was asked how Obama would cut spending. The campaign indicated to Garrett that it would achieve a net spending cut -- not, as one would expect, by cutting spending -- but by counting the revenue from Obama's tax increases.
Barack Obama noted we should try to share burdens. And I agree. Thankfully, NTU has data on that as well. As we note on our Who Pays Income Taxes page, this is how we currently "share the burden":
Top 1 percent pays 39.89 percent of income taxes;
Top 5 percent pays 60.14 percent of income taxes;
Top 10 percent pays 70.79 percent of income taxes;
Top 25 percent pays 86.27 percent of income taxes;
Top 50 percent pays 97.01 percent of income taxes;
And the bottom 50 percent pay 2.99 percent of income taxes.
And over at our Who Doesn't Pay Income Taxes page, you'll see that 32.6 percent of all people who file income tax returns don't pay a dime in income taxes.
John McCain just said in the debate that y'all should look to the National Taxpayers Union for the facts on the candidates' fiscal records and promises. To help y'all out, here are some quick links:
The mystery of the missing SNL bailout sketch is solved. According to Hollywood reporter Nikki Finke, NBC is editing the video to protect themselves from a likely lawsuit from real-life Herb and Marion Sandler (the folks labeled "people who should be shot" in the sketch).
Once the offending caption is removed it should be back online.
For what it's worth, the Dow has dropped nearly 1,200 points since the bailout passed the House at about 1:30pm Friday.
Gee, it sure is a good thing that we were able to avoid the apocalyptic scenario that Brad Sherman described as some of the warnings coming from bailout supporters.
NBC Nightly News reports that the national debt has become so large that the National Debt Clock in New York City doesn't have enough digits. Greeeatttttt....
The Massachusetts Democrat, chairman of the House Financial Services Committee, said the GOP is appealing to its base by blaming the country's mortgage foreclosure problem on efforts to expand affordable housing through the Community Reinvestment Act.
[...]
"They get to take things out on poor people," Frank said at a mortgage foreclosure symposium in Boston. "Let's be honest: The fact that some of the poor people are black doesn't hurt them either, from their standpoint. This is an effort, I believe, to appeal to a kind of anger in people."
And you thought Barneys couldn't get any more annoying than this:
OK, what is going on here? Why is this video no longer available all of a sudden?
Jimharsh
This skit was one of a handful of truly funny skits amidst a sea of unfunny in this episode. What happened to freedom of speech? This is the kind of speech that the constitution was intended to protect. I am sad to see this down with no explanation.
tracy1314
I watched this video in it's entirety earlier this afternoon!! I can't believe it's being censored, either!!! It's been chopped so much on youtube, not even half of it is left! I guess this is a precursor to what media would be like under a democrat government - are you ready to say goodbye to free speech?
rjckeg
This skit seems to have been censored EVERYWHERE on the internet. I heard part of the skit on the radio today and wanted to see the whole skit. It seems the the democrats have been successful at getting it removed from the internet.
mugwumpwelch
On a day when the Dow is plunging and the true scope of the bailout is still being discovered, I figured it was as good a time as any to quote some fascinating survey data. 59% of Americans would like to replace EVERY SINGLE Member of Congress, if they could. That, my friends, is a stunning number. Only 49% believe that the current Congress is better than playing eenie-meenie-minie-mo with the phone book. Only 25% of people believe that Congress actually understands legislation before they vote on it.
Cato has released Global Tax Revolution, which describes tax reforms around the world since the 1980s, as well as challenges to the American economy in an age of globalization.
Employers now control about 28% of the $2.5 trillion sloshing around in the U.S. health-care sector. Given current trends in health-care spending growth and even assuming higher average marginal tax rates, over the next 10 years McCain's tax credit would let workers control $7 trillion of their own earnings that they otherwise would not control. This effective $7 trillion tax cut completely swamps the $3.6 trillion tax increase Barack Obama advisers claim would result from McCain's tax credits not growing as rapidly as the current tax "break."
The Obama-Biden campaign seems determined to deny the reality of McCain's tax-credit proposal. Perhaps that's because they would prefer to let the government control that $9,000 you've got coming to you.
Election season is well underway, but candidates shouldn’t be your only focus right now. Many taxpayers will have the opportunity to vote on important tax and spending questions down-ballot.
To help navigate the waters, your friends at the National Taxpayers Union have put together this Ballot Guide that covers more than 100 initiative and referendum measures in 34 states. Among the proposals highlighted:
•Arizona’s Proposition 100 would prohibit new property transfer taxes;
•Colorado’s Amendment 59 could permanently kill certain tax rebate checks;
•Maine’s Question 1 would repeal new beverage taxes;
•Massachusetts’ Question 1 would completely eliminate state income taxes;
•Minnesota’s constitutional amendment could increase the state sales tax;
•Oregon’s Measure 56 could gut the “double majority” protection against tax hikes;
•and many more!
Your state or locality could be an important battleground for fiscal measures this year, with possible implications for other fights across the nation. Please take a moment to review the information we’ve compiled about major proposals up for consideration this November 4.
We’d like to note that NTU’s Ballot Guide is for informational purposes only; it is not intended to provide endorsements or recommendations to voters. We hope it will serve as a useful resource for additional research.
Election Day is November 4, 2008. Remember to vote!
The Dow is currently down more than 550 points as I write this (10:40am). Apparently the markets don't like the bailout passing much more than they liked it not passing.
Sure makes you wish we didn't make policy based on a single day's swing in the market, doesn't it?
Update 2:26 pm: We're now down 719 points. Good thing our benevolent overlords passed that bailout, eh?
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