A Flood of Red Ink
The fiscal fallout from Hurricane Katrina
Shelley Moore Capito is worried about Hurricane Katrina's fiscal implications. "We don't want to turn rebuilding the Big Easy into the Big Dig," the Republican representative from West Virginia recently told the Los Angeles Times, referring to Boston's notoriously bloated underground highway project. She said the reconstruction effort "is going to require efficiency, which is not something synonymous with the federal government."
Capito herself illustrated the reason Congress cannot be trusted to spend our money wisely when she was asked if she'd be willing to help fund Katrina aid by giving up West Virginia's share of the $25 billion in pork-barrel spending authorized by this year's transportation bill—one target on a list of cuts proposed by the Republican Study Committee (RSC), the last bastion of fiscal conservatives in the House. "I don't like that idea," she confessed. "It took three years to get it done. It's a jobs bill."
Nor does Capito like the idea of delaying the new Medicare prescription drug benefit by a year, which the RSC estimates would save $31 billion. "I worked hard for that," she said. "It took a lot of time and effort to squeeze it through."
Capito and her colleagues in Congress are all for fiscal responsibility in theory. They're only against it in practice, when it impairs their ability to buy votes with taxpayers' money.
In this case, as with the rest of the money it has been working so hard to spend since George W. Bush was elected, Congress is taking its cues from the president. First he unveiled a grandiose post-Katrina reconstruction plan, promising not only to restore New Orleans but to make it "better and stronger" than ever. The next day, he belatedly mentioned "cutting other programs" but also said reconstruction will "cost whatever it costs."
With preliminary estimates in the area of $200 billion, that blithe attitude is not exactly reassuring. Neither is the 35 percent increase in discretionary spending over which Bush presided in his first term; or his proud advocacy of unnecessary, unconstitutional budget busters such as the Medicare drug benefit and the No Child Left Behind Act; or his record of zero vetoes in five years.
Our president is very generous with other people's money. Worse, he is generous with the money of people who are in no position to object, either because they are too young or because they haven't been born yet.
Heritage Foundation budget analyst Brian Riedl estimates the federal deficit, which was projected to be $331 billion this year before Katrina hit, will rise to $500 billion in 2008 and $873 billion in 2015, largely due to hurricane relief and reconstruction, together with spending in Iraq and Afghanistan. Riedl cautions that "even these estimates could prove overly optimistic."
Without serious spending cuts, Bush's promise of no tax hikes is a fraud. Taxes will go up, since ultimately that's the only way to finance federal spending. It's just a question of when. Either the burden will be imposed on current taxpayers (and the repercussions felt by current politicians), or it will be dumped on our children and grandchildren.
In this context, it's hard to know whether to laugh or cry when House Majority Leader Tom DeLay (R-Texas) announces that there's no fat left to cut in the federal budget because "we've pared it down pretty good." At the same time, DeLay made a promise to anyone who managed the impossible feat of finding expendable items in the $2.6 trillion federal budget: "Bring me the offsets. I'll be glad to do it."
Several groups took up the challenge. Off the tops of their heads, two analysts at the Cato Institute came up with enough cuts to cover the $62 billion already authorized for Katrina relief. Taxpayers for Common Sense somehow found $144 billion in fat that DeLay missed. Heritage concluded that "a renewed war on wasteful spending could easily save $100 billion or more a year." The RSC proposed cuts that would save $370 billion over five years.
DeLay is no more serious about fiscal responsibility than Shelley Moore Capito. Like her, he cites the jobs created by federal spending as reason enough to support it (especially in his district)—a rationale that would justify paying people to dig holes and fill them in again. At least such a project would be preferable to digging holes deeper and deeper, which is the work of Congress.