Bush’s Tax Cuts Far Outweigh Congressional Pork
Maybe the most valuable earmark reform Congress could consider would be to offer more pork-barrel projects to legislators who vote against unaffordable tax cuts.
OK, that’s slightly facetious. Excessive earmarks are a real problem. But they don’t pose nearly as great a threat to the federal government’s finances as the massive tax cuts President Bush and Congress continue to enact.
Yet almost all of the Republican senators leading the charge against earmarks voted last week to extend the reductions in capital gains and dividend taxes Bush originally got passed in 2003. And almost all support extending the personal income tax cuts Bush pushed through Congress in 2001.
As a strategy for reducing Washington’s huge budget deficit, fighting earmarks while promoting tax cuts is incoherent. It ignores the biggest near-term threat to the budget to concentrate on a second-tier problem. It’s like a bank security guard arresting a pickpocket in the lobby while a gang of thieves loots the vault below.
Actually, that might understate the problem. The emphasis on earmarks, unless attached to a broader program, could set back action against the real threats to the federal budget: in the short term, the cost of Bush’s tax cuts; in the long term, the rise in entitlement spending for the elderly.
The focus on earmarks “throws the public off,” says Robert Bixby, executive director of the Concord Coalition, a nonpartisan fiscal watchdog group. “It distorts the nature of the problem. It is hard to get people focused on the big policy choices when they hear so much about these earmarks that they think that is the problem.”
There are legitimate reasons to worry about earmarks, the appropriations that individual legislators insert directly into spending bills.
Earmarks circumvent the ordinary processes that allow federal agencies to compare the merits of competing projects. They can breed corruption because donors often solicit earmarks as the implicit payback for their campaign contributions. And parochial projects like the celebrated “bridge to nowhere” in Alaska make Washington look silly and legislators appear self-serving. In all these ways, as Bixby says, excessive earmarks “bring contempt for government.”
What’s more, earmarks are multiplying. Citizens Against Government Waste, a conservative-leaning group that lobbies to reduce government spending, produces the most comprehensive list of earmarks, using the most expansive definition of “pork-barrel” spending. It calculates that in 1994, the last year Democrats held the majority, Congress approved $7.8 billion in earmarks. Under the Republican majority, that figure has steadily increased to an all-time high this year of $29 billion, the group says.
Other analysts in both parties consider that figure too high. Republicans on the House Appropriations Committee estimate the total for 2006 at $17 billion (with defense-related earmarks accounting for about 40% of that).
No one would brand all of that spending illegitimate. As Bixby says, “It’s not all ‘bridges to nowhere.’ ” But assume, for argument, that all earmarks are wasteful. Assume, further, that the citizen group’s estimate is more accurate than the Appropriations Committee’s. Even so, as a contributor to the deficit, earmarks represent little more than a rounding error compared to Bush’s tax cuts or the long-term cost of entitlements.
Last month, the Tax Policy Center -- a joint project of two center-left think tanks, the Brookings Institution and the Urban Institute -- produced a comprehensive projection of the federal budget over the next decade. It calculated that extending all of Bush’s first-term tax cuts and adjusting the alternative minimum tax to blunt its impact on the middle class would cost about $300 billion a year over the next decade.
That means the cost of Bush’s tax agenda exceeds the cost of all earmarks, even under the most expansive definition, by about 10 to 1. The cost of Bush’s tax agenda in one year alone will exceed the total spent on earmarks, by any definition, in the past decade.
Yet most of the leading congressional crusaders against earmarks, Republican senators such as Tom Coburn of Oklahoma, Jim DeMint of South Carolina and John McCain of Arizona, not only voted last week to extend Bush’s capital gains and dividend tax cuts, but also want to extend the sweeping reductions in income tax rates.
Few voices anywhere support repealing all of the Bush tax cuts; there’s broad support for provisions that represent about half of their cost, such as the children’s tax credit and the elimination of the marriage penalty.
But it’s disingenuous to suggest Washington can meaningfully reduce its budget deficit by restricting earmarks while extending the hugely expensive aspects of the Bush tax cut that benefit primarily the affluent, such as reductions in the top income tax rates.
It would be nice if Washington could reduce the burden of debt it is imposing on future generations just by combating pork-barrel spending. But it can’t. Any plausible deficit-reduction strategy will require Republicans to accept higher taxes and Democrats to accept limits on entitlements for the elderly, whose costs will consume an unsustainable share of federal spending over time.
Earmarks may be Washington at its worst, but earmark reform increasingly looks like the same thing. It allows politicians to suggest they are seriously confronting the deficit while supporting unaffordable tax cuts that deepen the deficit.
Earmark reform would fit well in an overall bipartisan plan to return the budget to balance. But a crusade against pork can’t substitute for a genuine deficit-reduction strategy that uses all the tools required for the job. If Bush and Congress pretend otherwise, pork-busting will become not an act of leadership but its opposite -- an excuse for avoiding the real decisions that fiscal sanity demands.
Ronald Brownstein’s column appears every Sunday. See current and past Brownstein columns on The Times’ website at: www.latimes.com/brownstein.