Campaign issues: spending
See reader comments posted at the end.
Most of the Republican candidates have proposed tax changes that would reduce overall revenues, while both Democratic candidates are calling for tax increases. We reviewed some of the tax plans that have been offered in a previous entry, rating the Bush, Rubio and Cruz tax plans as “good” and the Clinton and Trump tax plans as “unacceptable.” Questions for presidential candidates: taxes, 12/7/15.
On the other side of the ledger, what are the candidates proposing re government spending? This entry will focus on two questions from SAFE’s survey for presidential candidates, 6/9/15.
1. Do you agree the federal government should do a relatively few things and do them well, instead of trying to do everything for everybody and quite possibly winding up with subpar performance across the board? If so, what current functions or units of the government would you propose to eliminate? If not, are you basically satisfied with the status quo or do you believe the scope and reach of government should be further expanded (please specify what expanded or new programs you envision)?
2. Should the federal government’s fiscal goal be to (a) run surpluses so as to gradually pay off the national debt (now over $19T), (b) balance the budget and keep it that way, (c) run a “sustainable” deficit, or (d) do something else (please specify what)?
The candidates’ positions on welfare (#3) and entitlement programs (#4) will be evaluated in future entries.
I. DEMOCRATIC CANDIDATES – Former Senator and Secretary of State Hillary and Senator Bernie Sanders are basically on the same page. Both of them propose tax increases, but the proceeds would be used for spending increases versus deficit reduction.
In the last two Democratic candidate debates (about four hours of Q and A), for example, only a handful of questions were asked about fiscal matters and the answers provided were quite superficial.
Thus, Sanders was asked in the Jan. 17 debate how his Medicare for all (aka single payer) proposal would be paid for. He said taxes would be raised as necessary, including for the middle class, but all concerned would benefit from an overall reduction in healthcare costs. (The president made a similar claim about his healthcare plan in 2009 – which is not being borne out by the results of GovCare.) Transcript, 1/17/16.
So, instead of paying $10,000 dollars to Blue Cross, or Blue Shield, yes, some middle class families would be paying slightly more in taxes, but the result would be that that middle class family would be saving some $5,000 dollars in healthcare costs. A little bit more in taxes, do away with private health insurance premiums. It’s a pretty good deal.
In the Feb. 4 debate, Clinton was asked whether there were any government departments or programs that she would propose to eliminate (or add). Ducking the question, she committed only to “making what we have work better.” Transcript, 2/4/16.
I want to streamline programs that are duplicative and redundant. I want to have a top-to-bottom review about what works and what doesn't work, and be absolutely clear we're getting rid of what doesn't work. ***And when you put together a budget, you have to make a lot of hard decisions, but I think it's not appropriate to say "I'm going to get rid of this, get rid of that" until you have a very good process that gives you the information about what to do.
Several months ago, Sanders was asked a similar question in a news interview. His answer suggested a disposition to cut the defense budget, including core military capabilities like nuclear weapons and aircraft carriers, while basically leaving domestic spending alone. Sanders is interviewed by Bloomberg Politics for “With All Due Respect,” 9/18/15.
Q. Okay. Beyond the Pentagon, where I know you've just talked about maybe some cuts, are there any domestic programs of significant size that you'd like to see cut?
A. Yeah. I think we have got to end subsidizing of corporate agriculture, for example. *** if you're into large corporate farming, you really do not need subsidies from the federal government.
Neither candidate has much experience in fiscal matters, although Sanders noted in the Jan. 17 debate (responding to a comment by former Maryland Governor Martin O’Malley) that he had balanced a budget for 8 years while serving as mayor (of Burlington, VT), and Clinton claimed in the Feb. 4 debate that she had done a good job of running the State Department.
I have had the opportunity to run a big agency. I was very flattered when Henry Kissinger said I ran the State Department better -- better than anybody had run it in a long time. So I have an idea of what it's going to take to make our government work more efficiently.
Sanders mentioned the $1.4 trillion deficit for fiscal year 2009 in the Feb. 4 debate, but only as part of a litany of problems that the president inherited. (Said deficit was significantly inflated by a spending/tax bill enacted during the president’s first month in office. Economic stimulus package: what’s the rush? 2/2/09.)
In terms of President Obama, I think if we remember where this country was seven years ago, 800,000 jobs being lost every month, $1.4 trillion dollar deficit. The world's financial system on the verge of collapse. I think that President Obama, Vice President Biden, and the Democratic leadership in the House and the Senate have done a fantastic job.
Subsequent deficits and growth of the federal debt to the current $19 trillion level didn’t come up in either debate.
Assessment: Neither Clinton nor Sanders is concerned about balancing the budget, let alone beginning to repay debt, so if one of them was elected president the fiscal problem would continue to get worse.
2. REPUBLICAN CANDIDATES – It’s more difficult to determine where the Republican candidates stand for two reasons. First, there are more of them although the GOP field has now been reduced to eight. Second, they are less homogenous in terms of age, experience, and political ideas. Here’s a rundown, beginning with the candidates with executive experience and going on to the “outsider” candidates.
#Ohio Governor John Kasich is unique among the candidates in having had a role in balancing the federal budget, as the House Budget Committee Chair (Jan. 1996-Jan. 2001), the last time this feat was accomplished. He was subsequently elected governor of Ohio and has reportedly straightened out the economic mess there too.
Balancing the budget and building a strong economy go hand in hand, according to Kasich, and the keys to success are tax cuts, common-sense regulations, and fiscal discipline (aka spending cuts). Republican debate, transcript, 1/14/16.
Right now, you don't have the -- you have taxes that are too high. You have regulations -- I mean, come on, they're affecting everybody here, particularly our small businesses. They are -- they're in a position where they're smothering people. And I mean, are you kidding me? We're nowhere close to a balanced budget or fiscal discipline.
Kasich says balancing budgets requires tough decisions and is hard work. He believes in reaching across the aisle and seeking to inspire others to “be involved in something that's a little bigger than themselves.” Republican debate, transcript, 1/28/16.
You know, the situation is this. We cannot fix things in this country — the Social Security, the border, balancing the budget, getting wages to grow faster — unless we lead as conservatives, but we also invite people in from the other party. We have to come together as a country. And we have to stop all the divisions. *** And it isn't because I'm all that great. It's because I've been assembling a team of people who want to be involved in something that's a little bigger than themselves.
Assessment: Kasich has not offered specifics about where to cut spending, but he seems to have the zeal and knowhow to get the job done. If he doesn’t win the presidency, let’s hope that whoever does has the wit to nominate him as Secretary of Treasury.
# Former Florida Governor Jeb Bush makes rather similar claims for his state level experience. Here’s how he put it in the Jan. 28 debate.
. . . I have a proven record, a record of accomplishment, a record of cutting taxes, of shrinking the government, of reforming education, of challenging the status quo, eliminating career civil service protections, shrinking the government workforce by 11 percent, but leading the nation in job growth.
Wherever Bush might propose to cut spending, it apparently would not be in the defense sector. Jan. 14 debate.
Last week, Secretary Carter announced that the Navy's going to be cut again. It's now half the size of what it was prior to Operation Desert Storm. The deployments are too high for the military personnel. We don't have procurement being done for refreshing the equipment. The B-52 is still operational as the long range bomber; it was inaugurated in the age of Harry Truman. The planes are older than the pilots. We're gutting our military, and so the Iranians and the Chinese and the Russians and many other countries look at the United States not as serious as we once were. We have to eliminate the sequester, rebuild our military in a way that makes it clear that we're back in the game.
Bush has committed to support a balanced budget amendment; he says this is the only way to stop deficit spending. Campaign event, 7/27/15.
As long as deficits are an option, deficits will be the reality. The remedy that I will support as president is a Balanced Budget Amendment. To be clear, it has to be properly designed so that it's a tool to limit government, not to raise taxes. Americans in every party are right to be worried about the fiscal integrity and solvency of our government. It needs to be fixed. I will urge Congress to submit a Balanced Budget Amendment to the states and let the people decide.
Assessment: Bush comes across as a solid fiscal conservative, but we would like to hear more about how he would propose to convince 2/3 of both houses of Congress to support a BBA. Constitution, Article V.
#New Jersey Governor Chris Christie – New Jersey continues to have serious fiscal problems, but Christie points out that he has been working with a solidly Democratic legislature and claims this hasn’t stopped him from getting “conservative things done.” 1/28/16 debate
He also quotes Americans for Tax Reform to the effect that “I’ve vetoed more tax increases than any governor in American history.” 1/14/16 debate
Asked to identify one spending program that he would propose to eliminate as president, Christie cited funding for Planned Parenthood, which is hardly a big-ticket item in the context of the overall budget. 1/28/16 debate
Asked to explain how he would meet a purported need for $3.6 trillion in infrastructure by 2020, Christie didn’t challenge the premise of the question. Instead, he suggested that the problem could be solved by imposing a one-time tax of 8.75% on some $2 trillion in funds that US firms are holding overseas to avoid the tax that would apply on dividend payments. 1/28/16 debate
[This] would not necessitate us raising any taxes. It would bring the money back into the United States to help build jobs by American companies and get our economy moving again, and growing as a higher rate, and it would rebuild those roads and bridges and tunnels that you were talking about.
To be complete, although it goes beyond the scope of this entry, Christie has offered proposals to somewhat reduce future outlays for entitlement programs. He suggests that other candidates have ducked this issue because there aren’t any easy answers. 1/28/16 debate.
I'm the only one up on this stage who back in April put forward a detailed entitlement reform plan that will save over $1 trillion, save Social Security, save Medicare, and avoid this -- avoid what Hillary Rodham Clinton will do to you.
Assessment: Christie talks a good game, but it’s not clear he would attack fiscal issues in a disciplined way.
#Donald Trump – The flamboyant businessman has said more about “making America great again” than balancing the budget, but he is on record that spending must be cut. Consider his response to a question about the $18 trillion debt at a New Hampshire event on 10/12/15.
TRUMP: Alright. Well, what we're going to do, I mean we do, and by the way it's not $18 trillion, it's now $19 trillion. So we have now $19 trillion in deficits. $19 trillion, you know if you look, we owe! When I say that, we owe, this is what you're talking about, we owe $19 trillion as a country. And we're gonna knock it down and we're gonna bring it down big league and quickly, we're gonna bring jobs back, we're gonna bring business back, we're gonna stop our deficits, we're gonna stop our deficits, we're gonna do it very quickly.
MANY IN AUDIENCE: How?
TRUMP: Oh, how! Are you ready? Number 1, we have tremendous cutting to do. You have a Department of Education that is totally out of control, massive costs. And, you know, most of the, and some of the Republican candidates like Common Core. I'm totally against Common Core. I want local education. *** We're gonna save on Department of Environmental Protection, because they're not doing it. They're not doing their job, and they're making it impossible for our country to compete. And many, many other things. Hundreds of billions of dollars is going to be saved, just in terms of running government.
Factoring in Trump’s rhetoric about beefing up the US military, blocking any changes to entitlement programs, considering single payer healthcare, and overhauling the tax system in a way that would substantially cut government revenues, it's far from apparent how deficits would be reduced or eliminated.
Assessment: We believe that Trump would be more likely to exacerbate the fiscal problem than solve it.
#Senator Ted Cruz – The junior senator from Texas claims to be the only “consistent conservative” in the field, as shown by his efforts to repeal GovCare (which led to a government shutdown in 2013), block “comprehensive immigration reform,” and stop the omnibus spending/tax bill in December 2015.
Cruz’s rhetoric is typically unsparing of those who are on the other side of the issue or would prefer to sweep it under the rug. Here’s an example from the archives. Senator Cruz: Debt limit increase should be tied to budget cuts, newsmax.com, 2/10/14.
Cruz, who spoke to reporters after remarks at the Heritage Foundation think tank, said he hoped the House would not "go down that road" of agreeing to an increase in the government's borrowing authority without demanding measures to rein in long-term deficits. "President Obama is asking Congress to give him a blank check to allow him to keep maxing out the credit card without doing anything to fix the problem. I think that's irresponsible," Cruz said.
As for specific spending cuts, Cruz has proposed abolishing four departments (Commerce, Education, Energy, Housing & Urban Development) and the IRS. (Not a bad list, in our opinion, although even with Cruz proposals to simplify the tax system and enable people to file their tax returns “on a postcard,” some sort of tax collection agency would surely be necessary.) The top champions of spending cuts: Ted Cruz and Rand Paul, Pete Kasperowicz, Washington Examiner, 11/12/15.
Some have questioned whether Cruz’s votes on defense spending have been consistent with his rhetoric about supporting the military, as was illustrated by a heated exchange during the 1/14/16 debate.
MARCO RUBIO *** Every single time that there has been a Defense bill in the Senate, three people team up to vote against it. Bernie Sanders, Rand Paul and Ted Cruz. In fact, the only budget you have ever voted for, Ted, in your entire time in the Senate is a budget from Rand Paul that brags about how it cuts defense.
CRUZ *** Marco knows full well I voted for his amendment to increase military spending to $697 billion. What he said, and he said it in the last debate, it's simply not true. And as president, I will rebuild the military and keep this country safe.
Assessment: Cruz seems sincere about attacking the fiscal problem, and his ideas for doing so have the virtue of being specific. The big question mark is how effective he would be in persuading others to get on board.
#Senator Marco Rubio – The ability of the junior senator from Florida to solve the fiscal problem is necessarily dependent on his ideas versus his experience. Before they became involved in the presidential race, he and Cruz spoke about the issue in very consistent ways as shown by the following video (1:55). Marco Rubio, Ted Cruz discussing national debt, youtube.com, 7/11/13.
Rubio has not been very vocal about debt or deficits in the GOP debates, but some ideas on how “to get spending under control” are posted on his campaign website. marcorubio.com, accessed 2/6/16.
•Fight for a BBA and force Washington to live within its means without raising taxes
•Repeal ObamaCare and cut trillions in spending on the job-destroying law
•Push for line-item veto authority to cut wasteful spending
•Permanently ban pork-barrel earmarks
•Reduce the size of the federal workforce in Washington
•Prevent massive, irresponsible spending bills
•Allow states to use wasteful federal funds to pay down the national debt [?]
•Oppose corporate welfare like the New Deal-era Export-Import Bank
•Reform budget rules to provide taxpayers with the true costs of government spending •Reform budget rules to provide taxpayers with the true costs of government spending and the benefits of pro-growth policies
•Reform and save Medicare and Social Security for future generations without impacting those in or near retirement
Assessment: Rubio rhetoric about the fiscal problem is fine, but his ideas for addressing it seem more aspirational than actionable.
#Other candidates – Dr. Ben Carson has likened the fiscal problem to the internal decay that doomed the Roman Empire and offered a flat tax proposal that would spread the burden of supporting the government more equally. He has also spoken out strongly about problems with GovCare, and proposed that this system be repealed and replaced. His common sense ideas and calm demeanor have endeared him to many Americans.
Former H-P CEO Carly Fiorina has been a well-informed, articulate and enthusiastic candidate, willing to engage with voters on just about any issue. Re the fiscal issue, she has proposed a radical simplification of the tax system (reduce the rules to 3 pages!), and zero-based budgeting (in contrast to the accepted idea of a budget baseline that grows with the economy for all units and operations of government).
At this point, it seems unlikely that either Carson or Fiorina will win the Republican presidential nomination. However, we could see them playing important roles in some future administration, e.g., Carson as HHS Secretary and/or Fiorina as head of the government’s cyber-security program.
I always thought it was Congress that would determine the extent of government expenditures. Is that not part of the US Constitution? – SAFE member (DE)
Response: You’re quite right in principle, but with two houses and a total of 535 members (divided between the two parties) Congress is not known for making and enforcing tough decisions. Without a president who is determined to achieve fiscal discipline, there will be a tendency to let things continue sliding (as they have been for the past 15 years) instead of attempting to turn the ship around before it’s too late. So it does behoove Americans to pay attention to what’s going on and seek to elect the presidential candidate who is best qualified to deal with the fiscal problem and other crucial issues.
Only Trump is telling the truth so far and I don't even see him telling us the debt is intractable and the currency must crash, which it must. Abandon hope. – SAFE director