Archive for the ‘defense spending’ category

Worrisome People, Worrisome Proposal

June 23, 2017

On June 21, 2017, Dick and Liz Cheney penned an op-ed article in the Wall Street Journal. The subject, “Congress and Obama Depleted the Military”. Catch your breath, the Cheney’s are back and just as sure they are right again.

The article points to 8 years of President Obama and 6 years of Congress’ Budget Control Act as the prime culprit behind a “sagging” US military. One might think there has been a time warp or a cerebral malfunction since the Cheney’s seem unable to recall relevant history and Republican involvement. I wonder why?

The Budget Control Act stems from a partisan budget and deficit standoff. Congress’ inability to pass any budget and facing a Government shut down, prompted Congress to pass legislation which said in the event of budget cuts, these cuts must be done proportionally across all budget items including Defense. Noteably this Act only applied to “discretionary” items omitting Medicare, Medicaid, or Social Security. Conservatives have howled about this agreement for the past 6 years.

We should recognize that US Defense spending amounts to almost $600 billion each year, several multiples of any other country and roughly 1/3rd of the worlds total. Recognize also countries such as China and Russia, combined are only a third of the US expenditure. So assume for a moment, the Cheneys are correct in pointing out deficiencies in the US Defense position, one ought to first ask how is that possible with so much total spending?

The Cheney’s appear conveniently forgetful that it was none other than Vice President Dick Cheney who got the US into nation building in Afghanistan and into a failed invasion and occupation of Iraq.  Most estimates put both of these endeavors’ cost in the trillions of dollars level.  Both of these ventures have yielded none of the promised goals.

The Bush Vice President, more than anyone else is responsible for the wheels coming off the Middle East wagon and creating a power vacuum which is consuming our military’s time and resources. But sometimes people forget those things that don’t support their current agenda.

Today’s world is a different place from 2004 when the US invaded and occupied Iraq. China has become a formidable military force and shows little signs of ceasing its military growth. Russia, also a nuclear country, is stronger and more focused under Vladimir Putin than it was in 2004.

The US should rightly be concerned about security concerning both of these countries. But the answer can’t be simply to rebuild the traditional armory (ships, planes, troops) and think China and Russia will be intimidated.  What about cyber and space warfare? The US must get smarter and while maintaining strength, must use foreign policy, economic influence, and diplomacy to greater degree.

And I wonder if the Cheney’s are aware that the Trump Administration has proposed sharp cuts in State Department funding? Do the Cheney’s realize that the Trump White House has threatened more than once to use trade as a negative foreign policy tool? Trade restrictions, historically, has been one of the fastest ways to generate armed conflict.

The Cheney “op-ed” piece is a thinly veiled attempt to promote Ms Cheney as a tough conservative who needs to be considered for future positions of greater responsibility.

Hmmm.

If this happens, Americans should expect Dick Cheney 2.0 and advance Ms Cheney at their own peril.

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Promises Have Consequences

November 4, 2016

Donald Trump has promised “big time” tax cuts, the repeal and replacement of Obamacare, a get tough policy with China, renegotiation of major trade treaties, a massive investment in the infrastructure, new wall between Mexico and the US, and a return of previously outsourced jobs, including steel and coal jobs. There are many who like these positions and will vote for Trump thinking the Donald will produce. I wonder whether they ever thought “will he/she love me in the morning”?

My guess is that Trump really doesn’t worry about keeping these promises, even if he gets elected. He will simply make up some new promises while claiming he never promised anything in the first place. But what might happen if Trump actually tries to fulfill his campaign pledges?

Were Congress to pass a “big time” tax cut, Congress would be immediately confronted with an exploding deficit. The Federal Debt would have to expand to cover the tax shortfall. Trump is a businessman and no stranger to debt and even bankruptcy would remain relaxed.

The more fiscally conservative Republicans, however, would go apoplectic.

These conservative budget hawks would demand immediate budget cuts and target entitlements along with defense spending. Defense cuts, however, would put the fear of god into other Republicans especially the neoconservative crowd. These patriots would agree to entitlement cuts but cutting defense is a non-starter for them. So much for party unity.

But what about the infrastructure and all the new jobs it would bring, or the Mexican wall and all the immigrants it would keep out, and what about the buses, trains, and federal agents necessary to deport the 11 million undocumented aliens? These might have to wait.

About this time, Ford, General Motors, GE, and dozens of other companies will announce they are unable to bring back outsourced jobs for competitive reasons, even if President Trump does cut their corporate income tax. And by the way, in order to remain competitive, more jobs might be teed up to go overseas… for competitive reasons.

Oh, and repealing Obamacare will bring with it some significant political damage when most Americans find out that their insurance costs are not going to decrease. (Do you remember the US healthcare delivery program before Obamacare?  The previous program experienced annual increases two or more times the rate of inflation.  So why should we expect cost to suddenly decrease?)

Insurance companies will say “no, thank you” to picking up the extra cost for “pre-existing conditions” and “no limits on total payouts”. Insurance companies will balk at covering dependents under 26 years of age too. And when President Trump asks States to pick up more Medicaid costs, they will not so politely say no.

And, those “low cost” policies sold across State borders, we’ve heard so much about, will come more into focus. They will protect the insured for just what they are written to do and no more. These bargain policies will come with huge deductibles and co-pays or very narrow coverage, or both.  Those wanting broader coverage will need to get the check book out again.

By this time, Trump will realize it was so much easier running for office than actual being President. Who will he blame then?

Sequestration Again

August 3, 2015

As Congress returns to “work” (maybe session is a better word than work) , the Federal Budget and the Federal Debt issues will come front and center. For those who link the two and see the Federal Debt as driven by unbalanced budgets, this is the time to take a stand. The more “Tea Party-ish” the Congress member, the stronger the opposition to any unbalanced budget. And damn the consequences.

We have seen this irrational behavior before. Each time the GOP conservatives rise up and block passage of funding bills, the inevitable “shutting down” Government is presented as a viable option. While Congress members cloaked themselves in the flag, this attitude is arrogance at the extreme and incompetent at the least.

The Government shut downs actually save little money (since Government workers are always granted missed pay). The shutdowns also inconvenience average Americans (who have no part in this food fight) by closing functions like passport services, Federal Parks, and all sorts of Federal Benefits Offices. Polls have consistently indicated that voters shift their support from the GOP to Democrats each time this exercise is run.

The early 2015 “battle cry” is tied to “Sequestration”. This budgetary process was a bi-partisan compromise where mandatory cuts would be imposed, across the board, to maintain government spending at some specified level. This meant that if Federal spending was projected to increase 2% above this magic number, all Federal agencies with discretionary spending would need to cut by 2%. That meant both the Department of Education and the Defense Department would need to cut all programs by 2%.

Today neither party likes sequestration.  The main argument against sequestration has been that cuts should not be across the board. Opponents reasoned a Department head should be able to select which parts of its budget to cut providing these cuts were equivalent to 2% of the total budget. This year the argument is taking on a new twist.

Both Democrats and Republicans favor increasing the Defense Department budget. Hmmm.

The GOP wants to exempt Defense from sequestration (but keep sequestration for the rest of the budget). Hmmm.

President Obama has said he will have none of that. Unless there are increases also in aid to education and certain other favored programs, the President has promised to veto any budget proposal. No agreement, no budget, and hello government shutdown.

One would think that serious minded people would question why Defense needs to increase? The Defense Budget is close to $600 billion and one would think there must be “waste and fat” through out it. That same view could be held for the remainder of the Federal Budget too. Never the less, our elected representatives assure the public programs can not be cut.

Wouldn’t logic then convince voters to increase tax revenues to cover these absolutely necessary expenses? And, at this thought, our 535 Congress members come unglued.

There are many compromises easily at hand. The President and Congress could agree upon exemption which would allow increases in Defense and other Agencies’ budgets, and simply accept an increase in the Debt. They could also stick to sequestration and accept the cuts.

Until, however, there is a serious structural look that the Budget in which we thoughtfully question the cost drivers in Medicare, Medicaid, and Defense, there can be little hope of balancing the budget. Simply raising taxes is a mistake but it is the compromise of last resort.

Medicare creates a budget drain because payroll taxes are too low (what has been put into the fund) to cover current costs (what the medical industry is charging). Medicaid is more complex since it introduces the notion of whether healthcare should be available to everyone regardless of ability to pay. Simplistically, Medicaid is also a function of too little taxes and too high expenses “unless” you subscribe to the notion that healthcare is delivered only to those who can afford it.

Defense spending is the most complex. Inspection can quickly show us that Defense costs are murky and hide many programs deemed too classified to reveal. Spreading Defense spending around the 50 States makes for good politics but it is unlikely this practice leads to fiscal sensibility.

In the minds of our elected officials, keeping spending about where it is, with certain increases, makes the most sense. They prefer to hold their noses rather than undertake the hard work of real reform. Mix into these elected officials, some who see only a zero sum game, you have the makings of gridlock.

With the American public weary of war, selling Defense Budget increases will be tough (if the consequence is shut down). Shutting down the Government so close to the 2016 election could very well backfire even more than in the past.

With 17 GOP Presidential aspirants the budget should be red meat for the upcoming debates.