Saturday, January 22, 2011

GOP House Releases it Spending Reduction Program

The GOP released its plan for reducing federal spending that won't go anywhere. This summary is worth reading because it demonstrates some important things about government in general and about the GOP in particular. The general point is that government can be understood well by observing two things: Where does the tax revenue come from and what is it spent on. The spending cuts proposed by the GOP show us how the spending game is played. The big cut comes from not allowing any increases in the non-defense discretionary spending budget. That allows inflation to eat away at the budget and it produces big savings over time. This has two advantages. It produces savings without offending any interest group and it allows them to give the media a big number to broadcast since they show the amount of savings over 10 years. After dealing with the big cut they then list some of the specific cuts that they propose. These cuts provide the red meat for their base. They selected the programs that conservatives love to hate. The specific cuts are provided in the link. You won't be surprised by most of them. They probably seem important to their base but cutting a few million here, and another few million there, is small potatoes in the total federal budget. The only thing you will learn from these cuts is what parts of government that they hate, and what programs provide benefits to defenseless groups.

You should also notice what they don't cut. There are no cuts to a defense budget that is equal to what the rest of the world, in total, spends on defense. They also do not mention the entitlement budget which, driven by rising healthcare costs, is the greatest source of future budget deficits. They will leave that to Paul Ryan who has plans for privatizing social security and Medicare.

The GOP is just getting started in preparation for the 2012 election. It will do everything that it can to put the administration on the defensive by passing bills that the Senate will not pass and by cutting funding to programs that they don't like.

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