Slash Domestic Spending to Pay for Rising War Cost

Cato Institute ^ | September 26, 2003 | Charles V. Peña and Veronique de Rugy

[Sparta]

Charles V. Peña is director of defense policy studies and Veronique de Rugy is fiscal policy analyst at the Cato Institute.

Before the war, President Bush asserted that the United States "will remain in Iraq as long as necessary, and not a day more." Now, he adds: "We will do what is necessary, we will spend what is necessary." In other words, $87 billion is likely to be a down payment on what will probably be a long-term and expensive mortgage. And with the administration unable to persuade allies who opposed the war to help finance the reconstruction, it looks as though American taxpayers will pay the full freight.

But if the president is going to spend an additional $87 billion (or more) in Iraq, he should make sure that this does not impose excessive costs on the American economy. This means domestic spending should be reduced by at least a similar amount, no difficult feat. In the first three years of his term, Bush has so far increased total federal outlays by a stunning 24 percent. Total nondefense discretionary spending has increased from $385 billion in fiscal year 2001 to $448 billion in fiscal year 2004. That $63 billion increase (over three years) eclipses the $33 billion President Clinton spent during his eight years in the White House.

If the president wants to toss an extra $87 billion at Iraq, he should think about cutting the $90 billion devoted to corporate welfare every year. He should also cut education spending, which has skyrocketed under his watch. Can we really justify billions going to 21st-Century Community Learning Centers or to vocational and adult education? The work of many government employees, among them NASA workers and air traffic controllers, can be privatized, along with federal assets such as land, mineral stockpiles and buildings. The National Endowments for the Humanities and for the Arts should be terminated. The federal government should also sell its defective business operations, including the Postal Service, Amtrak and electric utilities.

Cutting billions of dollars earmarked for international assistance programs such as Bush's latest AIDS initiative in Africa would also be a step in the right direction.

The bottom line: There are obviously plenty of ways to find money for Iraq and spare the taxpayer. The expansion of huge pork-barrel domestic spending will cripple our ability to fight the real war on terrorism and endanger our economy.

This article was published in the Atlanta Journal-Constitution, Sept. 24, 2003.

[ARCADIA]

So I wonder how Cato feels about a new $400 billion dollar drug benefit????????

[larryjohnson]

I guess I am a pro- war libertarian.

[Sparta]

Medicare Drug Benefit Brings Problems for Retirees and Young Workers "As Congress works on legislation to cover prescription drugs under Medicare, lawmakers have been deluged with complaints from retirees who fear losing drug benefits they already have from former employers," reports The New York Times. "In the last month, members of Congress say, they have realized that any Medicare drug benefit they may approve will have a profound effect on health coverage provided to retirees by former employers." Retirees will not be the only ones affected by the drug benefit if it passes. In a just-released study, "War between the Generations: Federal Spending on the Elderly Set to Explode," Cato Director of Fiscal Policy Chris Edwards and researcher Tad DeHaven explain that with the huge numbers of Americans nearing retirement age, Medicare and Social Security are already insolvent, and adding pricey new benefits will prove costly and unfair to young workers. They argue that Congress should cut spending rather than expand elderly entitlements. "It is clear that adding an unfunded prescription drug benefit to Medicare moves directly against reform because it puts the program's spending on an even more unsustainable path," they write. "Unfortunately, tomorrow's young taxpayers are not here to defend themselves against the huge burdens that are being foisted on them by Congress." Jonathan Block, editor, jblock@cato.org

From an earlier Cato daily dispatch.

[taxed2death]

400 billion dollar drug benefit = corporate welfare for the drug companies.

How about 15 billion hand out to Africa?

[Sparta]

Join the club.

[ARCADIA]

I agree completely. The $400 Billion is a gift to the insurance and phamaceutical industries, which will slaughter the middle class. Bush is no conservative. He is just another bought off politician who so far to the left that he makes Johnson look like a conservative. When are we going to start tossing these bastards in prison. A kid takes a pair of socks from a store and we prosecute him; these guys steal hundreds of $billions and we look the other way. What are we sheep?

[caltrop]

Sounds great to me but I doubt President Bush will ever abandon compassionate conservatism.

[reelfoot]

I just wish he would show some compassion TO conservatives.

[shortstop]

...lawmakers have been deluged with complaints from retirees who fear losing drug benefits they already have from former employers," reports The New York Times. "In the last month, members of Congress say, they have realized that any Medicare drug benefit they may approve will have a profound effect on health coverage provided to retirees by former employers."***

I am astounded that there's not more of a public outcry about this under-publicized fact, especially from our friends at AARP. While a Medicare drug benefit might help some Americans, I predict such a program will have a far more negative impact on a higher percentage of our population who already have adequate benefits.

[Blzbba]

Amen.

Bush is a tax-cut & spend liberal, fiscally speaking.

4 more years of this crap is what we get to look forward to.

[KantianBurke]

In the first three years of his term, Bush has so far increased total federal outlays by a stunning 24 percent. Total nondefense discretionary spending has increased from $385 billion in fiscal year 2001 to $448 billion in fiscal year 2004. That $63 billion increase (over three years) eclipses the $33 billion President Clinton spent during his eight years in the White House.

Oh but he looks sooo good in a flight suit! (sarcasm off)

[eeman]

I am not sure the pharmaceutical companies want this "gift." After all, once medications are paid for by the government, it will not be long before they will dictate the price of medications. Rember the golden rule: Those who have the gold make the rules.

[ARCADIA]

it will not be long before they will dictate the price of medications.

The public sector has never been good at dictating the price of anything. This thing will just inflate until our economy collapses. This is a big winfall for pharmaceuticals.

[Cobra64]

Every time I think about Federal spending, I remember the movie Dave

[BushisTheMan]

I vote we stop money for PRC and all the projects that Dasholes's wife has been promoting in D.C.

[alex]

The most expensive part of a modern war is a peace on the Home Front.

[boris]

Just to put things in perspective:

For 87 billion dollars we could send a permanent colony to the Moon.

For 87 billion dollars we could send a manned mission to Mars.

Now, I don't believe these things will happen in my lifetime--although I dedicated my life to seeing them happen; I am thoroughly disillusioned.

Nevertheless.

For 87 billion dollars we could blast most of the terrorist states into dust.

Let us get on with the work of winning the war on radical Islamism...and forget a pie-in-the-sky "Marshall Plan" for Iraq at $87 billion and counting.

--Boris