Category Archives: Defense spending

Chart of the Day: The Origin of the Federal Deficit

The argument that we have to choose between social and economic programs or maintain our military and defense requirements is a false choice.  IF we truly intend to reduce our federal deficit it would be helpful to see that a very significant portion of it comes from (1) the Recession created by the Wall St. mortgage meltdown, and (2) the Bush Tax Cuts.

Economic growth + allowing the Bush Tax cuts for the ultra-rich to expire would put a large dent into the debt.   Applying so-called “austerity” criteria to reduce the debt would merely serve to eliminate economic automatic stabilizers like unemployment insurance benefits and the SNAP program.

Eliminating funding for Meals on Wheels, child care, and Social Services Block Grants for disabled Americans is a POLICY choice not an economic imperative.  We can avoid the FALSE CHOICE TRAP by understanding that we (1) need automatic stabilizers to prevent unnecessary volatility in our consumer based economy, (2) need to invest in American infrastructure to stimulate hiring by contractors and subcontractors, and (3) need to implement health care insurance reforms which will alleviate the drag on our national economy.

Austerity never begat prosperity.

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Filed under Defense spending, Economy, Federal budget, financial regulation

Coffee and the Papers: Fire Away

** Appointed Senator Dean Heller’s  (R-NV) opposition to the confirmation of Elissa Cadish to the federal bench may doom the nomination. [LVSun] It seems the nominee once said that “reasonable restrictions” might be applied to gun ownership and use.  It is always so much nicer when an excuse can be found, than  admit that the Senate GOP leadership has been slow rolling the confirmation of federal judges and other administration candidates.  [See Judicial Nominations.Org]

** Senator Heller’s position, that gun ownership is an absolute Constitutional right, and should not be subject to case by case consideration, leaves several important questions unanswered.  (1) Does an individual with a documented and immediate medical history of mental illness have a constitutional right to obtain and use a firearm? (Think: Tucson, Virginia Tech)  (2) Does an individual who has been incarcerated for a felony involving the personal injury or death of another person have a constitutional right to obtain and use a firearm?  (3) Does a person having a known affiliation with a violent drug cartel have the constitutional right to obtain and use a firearm?  The argument that with rights come responsibilities is often offered by gun ownership advocates, so if a person uses, or is very likely to use, a firearm in an irresponsible way then does the community have no recourse but to endure the consequent tragedy?

** Senator Heller’s position on firearms regulation most closely aligns with that of married  white men over the age of 50, who have incomes between $75,000 and $99,000 per year, who self identify as conservative Republicans, belong to evangelical Protestant churches, and live in rural areas.  [Pew Research pdf]

** So, if it is necessary to “Drill Baby Drill,” and some supposed shortage of gasoline responsible for higher gasoline prices, then why is Flint Hills Resources Alaska shutting down their North Pole Refinery for the next five months?  [ADN] The firm cites high global crude prices.

** Bring it on, Planned Parenthood filed suit against the state of Texas asserting that the state improperly excluded its clinics from participating in the Medicaid women’s health program. [Austin]

** Department of No Surprises: “Mid-Incomers Suffer in Polarized U.S. Job Market,” [Bloomberg] “Americans at the top and bottom of the income scale are benefiting most from the jobs recovery while those in the middle are getting left behind. ”

** Wendy’s is the 6th firm to pull its support from ALEC. [PR Watch]

** What war on women?  In Arizona it is now illegal to have an abortion after 18 weeks of pregnancy because the state will start the clock on the first day of the woman’s last menstrual period. [Think Progress] Mississippi is now considering a bill to ban abortions after six weeks of gestation even if the woman’s health is at serious risk. [ThinkProgress] Anti-abortion advocates are launching a new constitutional amendment campaign in Florida. [NewsPress] An ultrasound bill is up for consideration in the Rhode Island House Judiciary Committee. [BostonGlobeWisconsin Governor Scott Walker signed 50 bills into law including one requiring an emphasis on abstinence only sex education, barring abortion coverage in health insurance exchanges, and repealing the state’s Equal Pay for Equal Work non-discrimination statute. [FDN]  More than 50% of all women in the U.S. of reproductive age now live in states hostile to abortion. [Guttmacher]

** The federal government increased online access to conflict of interest data as a result of the newly enacted STOCK Act.  [OMBWatch]

** Congressional pressure is increasing for the Pentagon to rein in its increasing reliance on private contractors. [POGO] The GAO is questioning the Pentagon’s expenditures with private contractors. [GovExec]

** Right wing’ers are attacking a 17 year old Ohio high school student for wearing a T-shirt saying “Jesus Is Not A Homophobe.”  [RightWingWatch]

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Filed under Defense spending, energy, energy policy, gay issues, Heller, Women's Issues, Womens' Rights

FYI: U.S. Debt, Expenditures Comparison and Rating

For your information, a table showing the U.S. as compared to other countries currently having a AAA credit rating from Standard and Poor.

Sources:  IMF Report for Selected Countries World Economic Database October, 2010,  Military Expenditure as Percent of GDP, CIA World Fact Book, Health Care statistics Nation Master, Education Statistics CIA World Fact Book

Country Credit Rating IMF %GDP % GDP Def. % GDP healthcare % GDP Education
Australia AAA 23.68 3 9.5 4.5
Austria AAA 72.35 0.8 7.7 5.4
Canada AAA 80.48 1.1 9.6 4.9
Denmark AAA 46.72 1.3 8.8 7.8
Finland AAA 52.2 2 7.3 5.9
France AAA 87.56 2.6 9.7 5.6
Germany AAA 76.52 1.5 10.9 4.5
Hong Kong AAA 0.59 none n/a 4.5
Luxembourg AAA 22.92 0.9 7.3 n/a
Netherlands AAA 69.38 1.6 8.8 5.3
Norway AAA 54.26 1.9 9.6 6.8
Singapore AAA 95.24 4.9 4.3 3
Sweden AAA 41.3 1.5 9.2 6.6
Switzerland AAA 37.8 1 11.2 5.2
United Kingdom AAA 81.93 2.4 7.7 5.5
United States AA+ 99.32 4.06 14.6 5.5

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Filed under Defense spending, education, Federal budget, Health Care, national debt

As long as we’re into Investigations, here are some suggestions

If the broadcast media and the Congress are interested in investigations, here are a couple of topics about which I would love to know much more.

#1. Why is Justice Clarence Thomas’s connection(s) to Citizens United not being investigated?  The organization worked to get him confirmed to the bench in 1991, and then after his wife worked for the organization he didn’t report the income. Nor, did he recuse himself from participating in the deliberations in the Citizens United case. [PC w/video]  There is more on this subject here and here.

#2. Which member of Congress thought it was  important to protect a particular collection of azaleas but perhaps didn’t think it was necessary to support nutrition programs for low income women and children?  No one seems to be willing to step up and admit to adding the azalea protection in a bill that lopped some $832 million from food assistance programs and could leave approximately 475,000 low income families unserved. [HuffPo]

#3. What bang for the buck is the U.S. government getting from NASCAR subsidies?The Army pays $7.4 million to sponsor Newman’s car. The Air Force pays under $2 million, including activation, to sponsor Allmendinger. The National Guard decreased its sponsorship fees 35 percent from last year when it paid $20.1 million in sponsorship fees on the No. 88 team last year and $12.7 million sponsoring the No. 24 team at Hendrick Motorsports — a total of nearly $32.8 million in sponsorship). ” [PolHotWr] The House voted 281-148 to retain the subsidies.  And, when did Dale Earnhardt Jr. prove incapable of getting private sector sponsors?  Don’t get me wrong, I am a racing fan (admittedly mostly open wheel) but really?  We have money for car sponsorships but not for nutrition programs?  Thus far all we have is “anecdotal evidence” that the subsidies actually enhance recruiting.  [Army Times]  It would be nice, one way or the other, to have some better data.

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Filed under Citizens United, Defense spending, Federal budget

>Where’s the Waste and Duplication?

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>GOP Songs Being Sung Off Key: Rhetoric Doesn’t Match Congressional Action

>There are some melodies the Republicans have been singing during campaign season, but the lyrics don’t match with the notes. Nevada voters have been regaled with various versions of how the GOP is the party protecting the interests of small business, and the party aligned with the needs for U.S. border security. The problem is — their votes don’t match their rhetoric.

Myth: The GOP is the party protecting the interests of small businesses
.
Fact: That’s not the way they’ve been voting. Examples:

(1) When the health care reform legislation offered tax credits of up to 35% for small business owners who had 25 or fewer employees — the Republicans voted against it. [roll call 105]

(2) Small businesses were estimated to find savings of about 4% as a result of passage of the health care reform bill, or a total of approximately $10 billion nationwide — the Republicans voted against it. [roll call 105]

(3) Senate Republicans are filibustering H.R. 5297, the Small Business Tax Credit and Jobs bill. The bill provides a $30 billion funding facility for small business loans to be offered primarily by community and other smaller banks. The bill would also decrease the tax liability for those who invest in start up businesses, increasing the deduction from $5,000 to $20,000. There is also a provision to cut capital gains taxes for small business investment. [CRS] We can know that GOP opposition is skewed towards large multi-national corporations because their objection to the bill is based on the increased penalties for failing to disclose corporate reportable transactions.

(4) Republicans opposed H.R. 2847 because it was “too expensive,” although the bill contained funding for construction, infrastructure, and other technological projects that would help contractors and subcontractors. Included in the bill was funding for $384 million in Small Business Administration loans. Senator John Ensign (R-NV) was one of the 28 members of the Senate voting against the measure. Only 2 Democrats voted against it. [roll call 340]

Myth: The Republican Party is interested in protecting the U.S. southern border.
Fact: But, not if it involves actually voting to spend money for the projects.

In June, 2010, the Obama Administration requested $600 million to fund the hiring of 1,000 border patrol agents, purchase two drones, and to enhance border security. [LAT] The House of Representatives passed an increase of $100 million, but by the time the bill reached the Senate the number had decreased to a $500 million request. [NDN] H.R. 4899 came up for a vote to break the Republican filibuster on July 22, 2010. A cloture vote failed 46-51. [roll call 219] Senator John Ensign (R-NV) voted to sustain the filibuster, Senator Harry Reid voted to invoke cloture. The measure finally passed, without the House amendment, on July 27, 2010 in the House. [roll call 474] Chapter 6 of the bill passed without the emergency supplemental funding for the Department of Homeland Security’s border security hiring and project needs. [CRS] [text]

The funding for the protection of the U.S. southern border finally passed, during a special session of the Senate called back for the purpose of addressing the issue — with Senator Charles Schumer (D-NY) taking the floor to explain the necessity of passing a new version of the funding bill, H.R. 6080. Senator Schumer asked for, and received, “no objections” to his motion to consider the bill as read, passed, and any motion to reconsider laid upon the table. [Senate, pdf] The GOP filibuster failed, not with a bang, and nearly without even a whimper.

Myth: The GOP supports the troops.
Fact: But, not if that means supporting them financially.

In May 2010, the House Armed Services Committee voted to approve pay increases for members of the U.S. Armed Forces by 1.9%. The proposal met with Republican opposition: “Support for one more bump in military pay was unanimous on the 14-member subcommittee. Rep. Joe Wilson, S.C., ranking Republican, said “growing opposition” to adding an extra half percent “on the assertion that military pay now exceeds that of comparable civilian jobs.” [SVH] Proponents of the pay increases responded that it would be very difficult to find comparable job descriptions in civilian employment.

H.R. 5163, the National Defense Authorization Act FY 2011, passed the House on May 28, on a 229-186 vote, with Congressman Dean Heller (R-NV2) voting against it. Representatives Titus (D-NV3) and Berkley (D-NV1) voted in favor of the bill. [roll call 336]

H.R. 5163 has been received by the U.S. Senate, and placed on the calendar as of June 28, 2010. Title VI of the bill includes the provision for 1.9% increase in the rates of basic pay for military personnel. The Senate Armed Services Committee conducted a Mark Up session on the bill on May 28, 2010 preliminarily reporting the bill out of committee with a favorable vote, 18-10; the ten opponents being the Republican members of the committee. [ASC. pdf] GOP opposition in the committee appeared to center on the DADT provisions, although notably the 1.9% increase had been pared down to the Administration’s previous request for 1.4%. [ASC, pdf] Evidently, Republicans, those sharing the sentiments of Rep. Joe Wilson (R-SC) had their way, finding that half percent increase in basic pay rates “too expensive.” The narrative of this bill’s progress thus far should incorporate the fact that it was House Democrats who were determined to increase the take home pay of soldiers, sailors, airmen, and Marines by that extra 1/2 percent — not the members of the Republican caucuses.

Since Senate Republicans have filibustered 117 bills thus far during the 111th Session of Congress, and forced 68 cloture votes to date, it doesn’t stretch the imagination too far to assume that the Senate GOP will filibuster the FY2011 National Defense Authorization Act, H.R. 5173, as well.

It might be a good thing if we could support the pay rate appropriations such that Item 2010A, of the FY 2010 Pentagon Budget (pdf) could be eliminated; that’s the Family Subsistence Supplemental Allowance — or Food Stamps for military families. Perhaps a member of the GOP caucuses would care to explain why we have ANY military families qualifying for food stamps?

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>4th of July Great American Myths and Legends

>Myth Number One: The money tied up in federal earmarks could pay for just about everything.
Not so. First, there really isn’t all that much funding tied up in earmarks, $15,932,261,848.00 to be exact for the FY 2010 federal budget. Secondly, some of those funds are designated for Army Corp of Engineers’ projects. [GovExec] (pdf file) Third, of the top three Senators in the “earmark department” two are members of the GOP, Senator Thad Cochran (R-MS) and Senator Roger Wicker (R-MS), others are Democratic senators. On a philosophical note: It doesn’t do to attack a Senator such as Harry Reid (D-NV) as a “porker” for his 162 earmarked items for Nevada contractors and other businesses, and then turn about and say that he’s not “done” anything for the state — like get funding for Nevada projects which support Nevada employment. One doesn’t get to have it both ways. Finally, the total FY 2010 federal budget includes approximately $3.5 trillion in spending, with mandatory spending at $2.184 trillion and discretionary spending at $$1.386 trillion. Thus earmarks constitute approximately 0.7% of the total discretionary spending. [link]

Myth Number Two: If we’d cut off foreign aid we could pay for everything we want. The total budget for the U.S. State Department in FY 2010 is $51.7 billion. That was about 1.46% of the total FY 2010 budget. [link] Approximately $13,320,000 in FY 2011 is allocated for State Department administration (ambassadorial and consular services and international relations), the economic support fund was allocated $8.164 million, and the global health initiative received $7.829 million. The category encompassing international organization and peace keeping received $3.808 million in FY 2011. [OMB pdf]

Then there is the problem of precisely what “foreign aid” one would like to cut. Would advocates of foreign aid reduction like to see aid for foreign military financing cut? That would lop off some $5,473 million in costs, but would hit our allies rather hard not to mention our own defense industry economic sector. How about cutting the proposed $1,200 million for the Pakistani Counterinsurgency Capability Fund? Well, maybe not if we intend for the Pakistani government to assist with our operations along the Afghan-Pakistan border. Perhaps we’d like to cut the $2,136 million in international narcotics law enforcement? We should cut the $2,957 million set aside for international “multi-lateral development banks?” Perhaps not, at least not if it’s not in our own best interest to have international economic growth, and create new markets for our products and services. Before we get too stingy about our own investments, we might want to remember that we get to celebrate this 4th of July in part because some Dutch bankers decided the struggling colonies were a good bet, and ought to be supported. [NPR]

There’s always the “get the U.S. out of the U.N.” crowd, but we need to remember that the entire FY2010-2011 budget for all United Nations regular operations is approximately $5.6 billion, retaining the current dues assessment formula. [UNGA] The FY 2011 budget calls for approximately $1.595 billion for United States’ membership in the United Nations, UN specialized agencies, and other multilateral organizations. Of that total, about $516.3 million is reserved for United Nations regular budget activities. [USUN] By comparison, one single Nimitz Class Aircraft Carrier costs $6.2 billion.

Myth Number Three: Unemployment benefits cause people to be lazy and remain jobless. Nevada senatorial candidate Sharron Angle is fond of this one. The exchange went like this: RALSTON: How would you have voted on that bill to extend unemployment benefits? ANGLE: I would have voted no, because the truth about it is that they keep extending these unemployment benefits to the point where people are afraid to go out and get a job because the job doesn’t pay as much as the unemployment benefit does. And what we really need to do is put people back to work. [TNR] However, in order for this argument to make any sense at all it ought to be demonstrated that as soon as the benefits run out people will return to the work force. Right? Wrong.

They don’t. What they do is stop reporting their employment status, because “why bother if reporting doesn’t yield any benefit?” [TNR] But how about that 1970’s study (Katz) conservative think tanks are fond of quoting that supposedly demonstrated the conservative contentions? The author doesn’t think it’s applicable to our current economic situation. Politifact interviewed Katz: “When we asked Katz about the discrepency between his remarks then and now, he explained that labor markets in the late 1970s and early 1980s were significantly different from today. Back then, it was common for companies making layoffs to later recall workers, and often workers accepted those jobs right as their benefits were coming to an end. Today, recalls rarely happen, and with the job market so tight, a job search can prove fruitless for many months. Most unemployed workers don’t have the luxury of timing when they accept a job. For that reason, Katz told us in an interview, “I strongly favor extensions of UI benefits when the labor market is weak and the ratio of job seekers to job openings is very high” – in other words, like the situation is right now.” (emphasis added)

In March, 2010, we had 5.4 workers for every job available. [EPI] If anything, the “jobs” bills enacted by Congress to date have been too small. Not that creating 250,000 jobs is anything to sneeze on, but with 14.6 million unemployed we need more drops in the bucket.

Myth Number Four: We are saddling our grandchildren with unconscionable debt.
This newly discovered concern for the offspring is touching. Rather more to the point is that indebtedness creates some more immediate potential problems having little to do with the progeny. As several nations have come to understand the hard way, major banks and their holding companies have pursued a policy of “selling” the notion that indebtedness is good, and then turning the tables, launching “attacks” on the nation’s currency in international trade. Labeled the “Hong Kong Double Play” after the Asian money crises of the last decade, the trick is to encumber a government with debt and then threaten to call in the markers lest a sell off in currency be initiated. Heads they win, tails they win. A bit more control over the excessive enthusiasm of the Debt Manufacturers might mitigate the attractiveness of the Olde Double Play. The double play might become thoroughly distasteful should one nation or another decide to bite the bullet and tell the Debt Manufacturers to figuratively drop dead, extortion being a highly undesirable human activity.

We may be saddling our progeny with even more serious economic problems if we don’t take actions necessary to secure the economic well being of their parents. The mythology of the Supply Side Hoax promoted the welfare of the elite. We’ve been told time and time again that if the rich are given tax breaks, and corporations could off-shore their accounts, then the riches gained thereby would trickle down in the form of jobs for the masses. It was, and remains, a theory in search of evidence, because the evidence shows otherwise.

The Reagan Growth “Miracle” was based on credit: “The overall rate of growth was very good. A 3.85 percent median quarterly rate of GDP growth is a very good number. 2) But the economy was grown on credit. And the rate of growth in total government debt was very high. 3) The high growth rate in total government debt outstanding was caused by a continuing increase in government spending at a rate higher than government revenues. 4) After adjusting for inflation, the growth in receipts in personal income taxes isn’t that impressive.” [Stewart] And, about that increase in personal earnings?

According to the Congressional Budget Office’s historical budget data, tax receipts from individuals totaled $297 billion in 1982 and $466.9 billion in 1990. That’s an increase of 57.20 percent. Over the same period of time the GDP price deflator increased from 63.866 to 82.053, or an increase of 28.476 percent. In other words, the increase of tax revenue from individuals really isn’t that impressive after adjusting for inflation.” [Stewart] Thus, when all the factors are inspected, the so-called Supply Side Theory produced precious little in terms of increasing personal income. If the “rising tide” of earnings by the top 2% in the country was supposed to raise all boats — it didn’t. Most income earners were left floundering in the water.

For better or worse, some 2/3rds of our economy is based on consumer spending, and if consumers don’t have (a) a job or, (b) unemployment benefits to tide them over between jobs, they do the obvious — they stop spending. A decrease in spending yields a decrease in demand. Declining demand pushes more layoffs, and the cycle becomes a whirlpool of deflation. If economists are fearful of inflation, they get even more restive at the prospect of deflation which creates (politely speaking) recessions, or (impolitely speaking) depressions.

You can take your pick of what might have caused the “Roosevelt Recession of 1937,” it might have been the tightening of the money supply by the Federal Reserve (the monetarists’ choice/Friedman) or it could have been the cuts in government spending and tax increases on middle and lower income workers (Keynesian position), either way it wiped out the gains of the early New Deal period. For that matter, it might have been a bit of both. What we do know is that the more restrictive the monetary policies, and the more “liquidationist” (Let Banks Fail) the Treasury philosophy, the deeper and longer the depression. [Bernanke]

Another interesting element in this debate is that evidently “some debt is better than others.” Little will sail through Congress faster than bills for Defense Department spending, and one of the better bookkeeping maneuvers of the last 10 years was President George W. Bush’s decision to take the wars in Iraq and Afghanistan “off the books.” The current Administration’s decision to put the expenses involved in these two theaters of operation back on the books created Sticker Shock in some quarters. OMG! Look at the deficit now! Think of the children! However, this was not the major concern during budget hearings in 2009, here’s an example from Republican Representative John McHugh:

John McHugh, had told Reuters that the Gates proposal would amount to an $8 billion slash in spending. But the numbers tell a different story: Not counting supplementals, Congress last year appropriated $513 billion to the Pentagon. This year, Gates is asking for $534 billion. If he gets everything he asks for, that’s an increase of $21 billion, and Congress could always increase the total beyond that. I asked McHugh’s staff where the notion of an overall spending cut came from, and, when pressed, they had a hard time standing by the idea of a decrease in total dollars.

“In terms of total dollars, you’re right,” said an aide. “But there will be $8 billion in funding cuts for some programs.” Gates was pretty clear, though, that many programs would indeed be cut, while others would be expanded. McHugh’s staff did say that the $8 billion figure originated at the Pentagon. According to a committee spokesperson, it “came from conversation our staff on the Armed Services Committee had with DOD officials. They asked them ‘what’s the delta going to be?’ And they said $8 billion.”

And, of course, an $8 billion “slash” would put the nation at risk! McHughes’ voice wasn’t a solo. Republican J. Randy Forbes chimed in. Republicans Todd Akin (R-MO), Doug Lamborn (R-CO), and Mary Fallin (R-OK), added their concern that cutting defense spending in any way would jeopardize the nation’s security. In other words, a modest decrease of $8 billion in some Pentagon programs out of a $663.7 billion (+12.7% YoY) request sent members of the Republican Party into the vapors, but speak of $30 billion to extend unemployment benefits and “The Republic Is In Grave Danger.” [Klein]

Further, Representative Shelley Berkley (D-NV) had some observations to make about the Republicans’ newly found concerns about budget deficits and debts last month: “The Republicans in the Senate are once again doing everything they can to destroy Medicare for millions of seniors by blocking legislation that will stop the 21% cut in payments to doctors who care for our elderly citizens. They say they’re worried about the deficit and paying the docs will add to the deficit. Excuse me. We are fighting two wars not paid for. We have homeland security needs not paid for. Medicare part D, not paid for. Not a word from the Senate Republicans. But they’re drawing a line on paying the doctors who treat Medicare patients: ‘this is going to add to the deficit.’ Let’s stop playing politics with Medicare. Pay the doctors, and provide health care for millions and millions of our senior citizens.” [Berkley] (emphasis added)

Evidently, the grandchildren will only be “saddled” by debts created to pay for social safety net programs, but will be “secured” by indebtedness racked up to pay for two wars, homeland security programs, and legislation beneficial to the pharmaceutical industry.

Perhaps we ought to also acknowledge on this Fourth of July that Washington did not chop down a cherry tree, nor was he at all likely to have tossed a dollar across the Potomac River, Lincoln did not write the Gettysburg Address on the back of an envelope, and William Howard Taft was probably not the originator of the Seventh Inning Stretch.

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Filed under Angle, Defense spending, Federal budget, Foreign Policy, national debt