As Doug Bandow recently
explained on this site, last Thursday,
August 19, was “Cost of Government
Day” (COGD), the date of the calendar year on
which the average American worker has earned enough gross income to
pay off his or her share of the spending and regulatory burden
imposed by government at the federal, state and local
levels.
“Two years ago Americans worked until July 16 to pay for
the cost of government,” says Grover Norquist, president of
Americans for Tax Reform (ATF). “That government was too expensive
and wasteful. Two years later, we work until August 19 for the same
bloated government. We lost an additional full month of our income
to pay the cost of government in just the last two
years.”
ATF and its Center for Fiscal Accountability (CFA), which
are the inspiration for COGD, held a press conference at the
National Press Club to commemorate the event. A panel of experts
elaborated on all the costs, taxes, regulations and policies that
have resulted in or will contribute to the unprecedented cumulative
burden on American taxpayers.
In a dreary coincidence, just a few hours before the ATF
and CFA press conference on the COGD, the Congressional Budget
Office (CBO) released its annual
summer update of the budget and economic outlook.
That report opens with a chirpy observation that the
federal deficit for 2010 will exceed $1.3 trillion — $71 billion
below last year’s total and $27 billion under the amount CBO
predicted in March 2010. Still, relative to the size of the
economy, “this year’s deficit is expected to be the second largest
shortfall in 65 years.” At 9.1 percent of gross domestic product
(GDP), “it is exceeded only by last year’s deficit of 9.9 percent
of GDP.”
As Mr. Norquist said at the COGD press conference, it can
be “depressing,” but the important question is “What to do about
it?”
Talk about depressing, Veronique de Rugy, a senior fellow
at the Mercatus Center,
expressed her dismay that, having left her native France several
years ago to escape overbearing government, she sees the United
States moving in a decidedly Gallic direction on regulation. She
noted that the new financial regulatory reform bill will set off a
chain reaction of regulatory activity, the cost of which are
undeterminable but unavoidably costly. This will inevitably create
uncertainty, which will create even more risk aversion in the
economy. Fortunately, de Rugy did not express any present intention
of abandoning these shores for the time being at least.
Despite the current angst over the possible
repeal of the Bush tax cuts, panelist James Capretta observed that
we have already experienced hundreds of billions in new taxes in
the form of ObamaCare. Capretta was an Associate Director at the
White House Office of Management and Budget (OMB), overseeing
health care, Social Security, and welfare. He is a fellow with the
Ethics and Public Policy Center
and will manage ObamaCareWatch.org, a website
dedicating to monitoring the new legislation’s implementation
and/or ultimate repeal. Just as disturbing, Capretta walked
through the mechanics of the new health care bill, which will,
literally, add tens of millions of new beneficiaries to a system
that is already a financial mess.
Another participant in the press conference, David
Kreutzer, a research fellow at the Heritage Foundation, provided a
warning of further costs to be imposed by the federal government if
Congress mandates a nationwide Renewable Electricity Standard (RES)
which, while excluding hydropower and nuclear, will privilege solar
and wind power and thereby require costly installations and
transmission mechanisms.
Disputing various government studies, Kreutzer argues that
RES will raise electricity prices by 36 percent for households and
60 percent for industry. It will add more than $10,000 to a family
of four’s share of the national debt by 2035.
Norquist used the press conference to expand on his
14 proposals to reduce government spending, which were
originally outlined in his June 30 testimony to the President’s
National Commission on Fiscal Responsibility and Reform. He was
adamant that entertaining any talk of any kind of tax increase
simply undercuts the drive to control spending. He cited both
President Ronald Reagan and the senior Bush as having been taken in
by various proposals to raise taxes in return for promised cuts in
spending, which never, ever materialized.
Two of my favorite suggestions involve term limits on a
member of Congress’s time on the Appropriation Committee and a ban
on naming any federal building or monument after a sitting
congressman or senator.
But a much bigger idea is Norquist’s call for a freeze on
federal discretionary spending at 2007 levels. He claims this would
bring the budget into balance by 2013 “even assuming that Congress
extends the 2001 and 2003 tax cuts and indexes the Alternative
Minimum Tax for inflation.”
What is striking about Grover Norquist’s 14 points, if I
may use that phrase, is that they are actually quite moderate in
the sense of being politically and economically feasible or well
within the realm of the possible.
For instance, he calls for resurrecting the “Byrd
Committee,” an idea he has previously
described in TAS. It was the bipartisan, bicameral
Joint Committee on Reduction of Nonessential Federal Expenditures,
which was first proposed in 1941 to focus on rescissions in federal
spending. Named after the late Senator Harry F. Byrd (D-VA), it was
a serious legislative committee with real subpoena powers. Its
proposals resulted in $38 billion (in 2010 dollars) in
savings.
Norquist argues that any recommendations from a newly
constituted Byrd Committee should be privileged and require an
up-or-down vote on the floor. At Thursday’s press conference, he
said he would actually support two such committees, one for the
House and one for the Senate, to encourage greater efforts
(competition?) from both chambers. Sen. John Thune (R-SD) has
already
introduced legislation on the subject.
The 14 points do not specifically address the looming
Death Star of runaway entitlement spending, but we already have
Congressman Paul Ryan
(R-WI) on that case. And congressmen, just like other people, need
to walk before they can run. Norquist’s recommendations will help
them limber up a bit. Once they get into the swing of cutting the
budget, who knows what they might achieve.
