Thursday, April 2, 2009

Republican Budget Bonanza

Well, with the Budget Spin wars going in full steam, I figured I'd print off the President's Budget, the CBO's estimate on the President's Budget, and the Republican Alternative introduced by Representative Scott Garrett and his Republican colleagues yesterday. It's interesting to sit and have all the documents on the desk at the same time.

Both proposals are disappoinging in that neither even pretends to attempt to balance the budget. As I wrote in an earlier post, both parties are addicted to deficit spending, it's just a matter of what they're borrowing for.

While Obama's budget has been scrutinized a lot, we knew where he was coming from because he's been talking about it since 2007. Even though there's no shot of the Republican Budget passing, it's interesting to now see where their conversation starts:
The budget gives priority to the Federal Government’s most important obligations, national defense, veterans’ benefits, and homeland security activities. All other appropriated spending is level-funded for fiscal years 2010-14, and then increased at a moderate rate through 2019.
So the party of Eisenhower and his warning against the military industrial complex has completely embraced a defense only spending mentality. It's unfortunate that Republicans see our military spending as a jobs programs. Money to get more teachers? Doctors? Green Collar? Nope.

It's also interesting to see their views on return on investment. In their argument in support of more drilling and against the cap and trade proposal (which, thankfully, is going nowhere fast), they cite "studies" that for every $1 billion invested in big oil, 5,400 jobs are created. That's spending $185,000 to create one job.

The SBA, whose budget is frozen by the Republican "vision", creates a job for every $50,000 lent, at a cost of around $200. Either way you look at it, Republicans are embracing a jobs figure that costs between 370% to 92,600% more to create a job.

That's not ensuring our tax dollars are being spent wisely, but it's consistent with other schemes like Medicare Advantage or hiring Blackwater to handle security, where taxpayers pay more for service than if the government did it itself. That's not fiscal responsibility, it's fiscal fleecing, and Republicans want to return to being trusted stewards?

Adding insult to injury is their tax proposal, which throws everyone into an AMT like structure by eliminating deductions, credits, etc. It also makes permanent things like the competitive advantage they gave foreign companies and taxing firefighters at a higher rate than hedge fund managers.

No one can argue that Obama's budget is fiscally responsible, doubling the national debt in ten years, although still less than Reagan in terms of percent. Unfortunately, the Republican alternative still adds roughly 50% to the debt over ten years, while continuing many of the policies and objectives that got us in this mess in the first place.

At some point, somebody is going to have to put our fiscal house in order, maybe before our grandchildren die.

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