SavingBudget accountability requires a profound sense of the national interest.  Achieving it does not require a magic formula or exotic economic calculation.  It requires political will.  And it requires much more public education by political leaders.

My perspective on this issue is heavily influenced by twelve years’ experience on the Senate Budget Committee.  The principal difference between then (the 1970s and 80s) and now is the number of zeroes.  Then we thought a hundred billion dollars, or even a billion, was a huge amount of money.  Now we are dealing in trillions.  Otherwise, the issues are pretty much the same.

The way any budget is balanced, whether private, corporate, or public, is to match spending with revenues.  If imbalance occurs, reduce spending and raise revenues.  Since Republicans will never vote to raise revenues, and indeed persist in cutting taxes, and many if not most Democrats are too politically traumatized to do so, even when they know it to be necessary, this leaves only cutting government services to achieve fiscal balance.

The problem with “cutting spending”, as everyone knows (including those for whom this is chanted like a mindless mantra), is that to make a real dent in a massive current deficit requires abandoning critical government agencies, including those required for national security such as the FBI and CIA, not to say also virtually all human relief programs, the highway programs, aid to all levels of education, slashing Social Security, Medicare, and Medicaid, and the list goes endlessly on.  It certainly also requires ending the wars in Iraq and Afghanistan today.

Unless one is prepared to tell the American people the truth about this, those who claim the budget can be balanced by “cutting spending” ought to list exactly and publicly the programs they will vote to eliminate, including particularly those benefiting their own States and districts, or they should shut up.

As demonstrated in the 1990s, the national budget can only be balanced during times of economic growth when existing individual and corporate tax structures generate sufficient revenues to pay the nation’s bills–all those programs we benefit from and demand.  I don’t know of a time in modern memory, or perhaps in history, when the U.S. had a balanced budget in time of war or economic recession.

So, the first steps toward fiscal integrity and accountability is to recognize the need for new revenues that can be raised without suppressing recovery, deferred spending (including the infamous “earmarks”–the new polite political word for old fashioned pork) that also is not critical to stimulate economic recovery, and getting jobless people back to work repairing our infrastructure and rebuilding our nation.

There is every reason not to expect honesty from those who use political slogans to avoid making hard choices and little reason to expect genuine statesmanship from those who continue to preach that we can have lower taxes, special interest earmarks, and budget accountability.  These politicians should at least have the good grace not to claim concern for the national interest and national security.

20 Responses to “The National Budget and the National Interest”

  1. Tom Gee Says:

    Once again, Senator Hart hits the nail on the head. Leadership requires truth. Truth requires honesty. This discussion about how to balance public budgets occurs at all levels, of course. I’m familiar with a lot of people at the local level who claim to be “all for education” but vote against school budgets. One of the arguments they make is that school administrations can’t manage the schools as it is. So, the solution is to give them even less to work with. As with all things, you get what you pay for.

  2. John Says:

    I agree but on the state level Governors are spening like crazy and waiting for the feds to bail them out. In Maryland, Governor O’Malley has increased spending in a bad economy and to balance the budget is furloughing state employees. He is only cutting people, not programs.

  3. fb0252 Says:

    Mr. Gee–I’ll hit the nail on the head for you. A client of mine’s 2009 tax return:

    2009 earnings $18,000–she worked 5 months and was terminated. Has yet to commence looking for another job. Why? read on.

    2009 tax return: Refund $5500.00. Taxes paid–other than State Tax, almost none.
    Unemployment compensation for next year: $1200/month.

    For 2010 it’s her husband’s turn to work. He drew the unemployment last year. Oh, and forgot to mention the $500/mo.SS# they get for having a “disabled” child–asthma.

    One day soon Mr. Hart and other Senators and former Senators will get to the real world and figure out that the majority of Americans neither work or pay taxes. They are gaming the system while just a few of us are paying. Those with the most kids pay the least taxes and profit from the system. They’re scamming us and producing trash babies by the millions for $$$. That’s what’s causing our budget (and other) problems.

  4. Ben Holcomb Says:

    It seems that all we need is jobs. In the last few months we have let at least 120,000 jobs be destroyed by General Motors; and they spent close to $1 Billion taxpayer dollars doing it!!

    Savingpontiac.org suggests an alternative….let’s use the assets we already own and create those American manufacturing jobs….NOW!!

  5. Bill Jansen Says:

    With the Republicans and right-wing talk show host decrying the Obama administration for running up the federal deficit, it is time to take a look back at who has the best record for managing the federal debt.

    Every President after WWII from Truman through Carter, both Republican and Democratic, had reduced the federal debt, as a percentage of GDP, from 98.2% of GDP at the end of WWII to 33.4% at the end of President Carter’s term in 1981.

    Then, in the twelve years between 1981 and 1993, when Republican Presidents Reagan and George H. W. Bush held office, the federal debt swelled from $1.79 trillion to $4.99 trillion, the largest increase ever, and going from 33.4% of GDP to a whopping 64.1% of GDP. Reagan, current the darling of the right, was responsible for most of that.

    Then, under Democratic President Clinton the actual debt increased about $1 trillion dollars, but as a percentage of GDP the federal debt actually decreased from the 64.1% of GDP of his predecessors to 57.3% of GDP at the end of Clinton’s term. And we all know he created the only budget surplus in recent history.

    The pattern again reversed and went up under George W. Bush, when the federal debt increased from 57.3% of GDP to 69.2% of GDP, the highest at any time since the early years of the Eisenhower administration.

    So, since the time of Jimmy Carter ALL Republican presidents have been responsible for dramatically increasing the federal debt as a percentage of GDP, and the only Democratic president in that timeframe, Bill Clinton, actually reduced the federal debt as a percentage of GDP.

    Yet, none of the Republican politicians were seemingly concerned about the federal debt when their party held the White House. These same Republicans are now crying loudly to anyone who will listen that the irresponsible Democrats are wildly increasing the federal debt.

    Is President Obama increasing the federal debt? After being handed by the Republicans an economy in complete meltdown, two wars, an unfunded tax decrease, and a hugely expensive unfunded prescription drug program, the role of the federal government looks more like the presidency of FDR who had to deal with the largest depression in history followed by the biggest war in this country’s history.

    It’s time for voters to check their history, and not listen to the Republicans who actually have been the worst offenders when it comes to increasing the burden of the federal debt.

  6. Gary Hart Says:

    My response to fb: I cannot account for any other current or former members of Congress, but I’ve lived in the real world all my life. Also keep in mind that every member of the House and Senate has been elected by a majority of the voters in their States and districts. If they are as out of touch as you indicate, their constituents will resolve that. Finally, the vast majority of Americans are not “gaming the system.” If you eliminated every person who is and took away their unemployment assistance, you would only make a very small dent in our deficits. Right now every report indicates that millions of hard working Americans are only getting by on unemployment compensation and food stamps. You may think most Americans are lazy, but I know otherwise.

  7. Jim Says:

    Former Senator Hart says “I don’t know of a time in modern memory, or perhaps in history, when the U.S. had a balanced budget in time of war or economic recession. ”

    Then concludes ” So, the first steps toward fiscal integrity and accountability is to recognize the need for new revenues … ”

    But why isn’t the first step to stop the wars?

  8. Mark D. Says:

    As usual, Gary Hart has it right. Then again, when he ran for President in 1984, he had it right as well. We all know what happened after Reagan slept through his second term and GHW Bush grew the deficit at alarming rates. The GOP likes to talk tough about spending and taxes, but their track record was eloquently detailed by Bill Jansen above and I’ll not attempt to reiterate his chronological assessment except to say that it is spot on.

  9. Robert Crump Says:

    The senator is correct; those who decry the absence of fiscal discipline and “out of control spending” should be asked specifically what programs should be cut, and by how much. I suspect however that won’t happen, or if it does, the usual suspects will be designated for cuts (i.e. entitlements) while the sanctity of the defense budget will remain unmolested by our esteemed public servants in the Land of Oz.

    Perhaps I am a dreamer but I look forward to an age in which the military has to hold a bake sale to fund its next overseas misadventure. And just to prove that I am not some dirty *ucking hippie, let me say that I am all in favor of reductions in entitlement spending as well – so long as we are also willing to roll back the Empire and the 700+ overseas bases it requires to perpetuate this fraud on the American people.

  10. A. Bandini Says:

    End the Federal Reserve, and end the endless greed and selfishness on the international banking cartel that is parasiting on wealth that properly belongs to the American people!

  11. Michael Califra Says:

    Bill Jansen documents the fiscal carnage the Republicans have bestowed time and again on the country. But it should not come as a surprise. Since the late 1970s rightwing think tanks have been promoting the idea of bankrupting the government as a means to undo the New Deal. The administration of George W. Bush was the fullest expression of that ideology. What is disappointing is the lack of leadership on Obama’s part. Instead of caving to the Right’s hysteria about debt and deficits, he should have addressed the nation from the oval office in detail about who was responsible for the debt, put into historical context the debt to GDP, and explain why it is necessary to add more debt to get the economy moving again during a consumption crisis.
    Contrary to what must be a common assumption in Washington, the American people are not stupid. What they lack is leadership with the courage to trust them with information beyond the same stale slogans we’ve been hearing for 30 years. Obama showed that courage during the campaign when he addressed the country as adults on race. He should be doing the same on the economy now. (It would also be a good opportunity to explain what most people already know: that the 30-year experiment with supply-side economics has been a disaster for the country.)

  12. Tom Gee Says:

    Another local example from a long time ago. In the mid-60s, a very bright and energetic good friend of mine, just out of Georgetown law school, went home and successfully ran for mayor. Within a matter of days of being sworn in, a January blizzard blanketed his central Ohio town. With hip boots and a parka on, he made his way through the drifting and blinding snow to the municipal garage. Finding only one employee there, he asked “Why aren’t the snow plows out in the streets?” The response, “Mr. Mayor, we haven’t had enough funds to fix the trucks for several years now!” My friend was defeated in the next election two years later.

  13. Phineas Says:

    Senator Hart, just a couple of historic notes: the federal budget was balanced in 1969, during the Vietnam War, though I have read(with no further explanation), that it was “accidental”; also, the last time the United States was completely debt-free was during the presidency of Andrew Jackson.

    I am glad you pointed out that the officials we so often decry are, in fact, elected. It seems it is nearly forgotten that these individuals, for the most part, reflect the desires of those who elected them. Unfortunately, this reflection includes the desire for programs that nobody really wants to pay for.

    Mr. Crump: I’ve been reading this blog for a few weeks now, and must say I’ve enjoyed your always thoughtful and often humorous comments. As someone who once drove 4 hours in a driving rain storm to see Senator Hart speak, I would encourage you to become active in your community (if not already) and inspire others.

  14. Gary Hart Says:

    Very interesting comments, as is becoming usual. One response to Mr. Crump: my experience is that “the military” rarely goes abroad looking for a fight. They are sent there by presidents and compliant Congresses whether necessary (World War II) or not (Iraq). Those most cautious about going to war are usually those that have been there. Better to require presidents and politicians to hold the bake sale before launching off on often questionable military adventures.

  15. elkojohn Says:

    I’m for a 10% flat tax on all gross income with no deductions (including the gross income of corporations — they are ”persons” aren’t they) with a Constitutional amendment that says the government cannot have deficit spending unless Congress DECLARES war.

  16. Jack Lohman Says:

    Yea, state governors and legislators are spending like hell, because the special interests that fund their elections WANT them to spend! Same with congressmen. Washington isn’t broken, it is corrupt. The recent health care debate tells us that. The insurance industry was forced to buy both political parties because of the 60-vote filibuster. So they had to buy off the Dems too.

    Only public funding of campaigns will turn this country around.

  17. Jeff Simpson Says:

    Given the economic strangulation that will result if demand for government bonds declines forcing the offering of more attractive rates of return, I would think that all public servants would band together to avert this potential crisis. Republicans claim that cutting taxes will stimulate economic activity that will, in turn, promote increased tax revenue that will more than offset the initial revenue losses. This trickle down revenue-enhancement philosophy has been tested extensively and has been proven ineffective, especially given the concommitant financial obligations of maintaining global hegemony.

    But reality does not prevent the GOP from marketing this attractive lie to the voter, because we all would like to believe that we can have the mutually exclusive benefits of low taxes, comprehensive domestic spending, a huge military budget, and a balanced budget. What is more, they can argue that this political mojo will require some time to work its magic. Republican embrace of low taxes and the continuation of foreign policy predicated on occupation and intimidation necessitate sacrificing on domestic spending and, until recently, matching income and outlay. Now that the deficit as a political issue has come to the fore, they can only target domestic spending, and so the least well-connected should beware.

    But, as you so eloquently state, the GOP will not articulate where domestic cuts will be made in an effort to not alienate key voting blocs (at least until after the midterm). Calling them out on the unviable political package they are hawking needs to happen now, but progressives need to do more. Long term stability of our republic will probably require extensive sacrifice. I am ready to pay more taxes, I am ready to receive less in government services, and I am ready to close down bases and bring soldiers home. In the short time, these changes will be painful, but in the long term, they are essential for the survival of the republic.

  18. Mark Hansen Says:

    Senator Hart, I completely agree with you that “Budget accountability requires a profound sense of the national interest”. We part ways on how that national interest can be achieved. I don’t believe that the national interest can be achieved through the current political process as it occurs in the nation’s capital today. If you look at the reality of our situation today you see special interests and self interest consistently prevail through the political process at the expense of the national interest. I am not being cynical, just trying to be realistic. We have to see the world as it exists if we hope to change it . . . and change it we must, not so much for ourselves as for our posterity. They will be stuck with the bill.

    I don’t believe that this change can come from more public education by political leaders, simply because the majority of political leaders today don’t have the desire or the will to lead that kind of effort. There are a few exceptions in both parties, but it is going to take more than a few.

    Change has to come from the hearts and minds of every American and then it will be reflected in the leaders they send to Washington. This is the challenge of our generation. We baby boomers have already been called the “me generation” by our parents because of the way we approached the first half of our lives. I sincerely pray that we will be known as something other than the “selfish generation” by our grandchildren as they look back on us.

    I fear that what we are witnessing today is something that the founding fathers warned of . . . That this Republic cannot be sustained by any other than a religious and moral people. The decline of the national interest and rise of special/self interests may well be related to a change in this generation that violates that founding principle. Unless we change the course of our generation, it could well be the fatal flaw that results in the decline of our Republic.

    I could say that we simply can’t let that happen. But then, how realistic is it to say that when the current reality is that we are letting it happen as we speak. Most of the founding fathers believed that Providence guided the founding and early years of our Republic. Join me and others in prayer that Divine Providence will once again guide and sustain this Republic. That there will be a revival of the national interest in the hearts and minds of all Americans, and that God will bless America again.

  19. Jeff Simpson Says:

    Good luck to Obama in convening his bipartisan commission to address how budget cuts can be made. If I were king, I would work hard to identify and eliminate waste, and I would do this by installing overseers (they would be very unpopular) to learn major government entity cultures one at a time so that across-the-board style cuts could be avoided. Mr. Hart, you referred to this type of shake-up by suggesting that some talented 35-year-old should be installed to revamp the CIA (or maybe Homeland Security) in a stump speech you gave at UNH in 2004).

    No longer should a government job be synonymous with a cushy, low-stress job with no accountability and no standards of pride or excellence (this is a perception, of course, and many public servants are accountable, hard-working, and take great pride in their work).

    With the downturn in the economy, the private sector laid off many workers and asked those that remained to do more with less. I have described this to my wife as “slammed at work is the new vanilla.” Many government agencies need to adopt a similarly lean staffing posture, if they have not done so already.

    NASA comes to mind, as does the Post Office. And perhaps the VA. And certainly the fragmented and turf-war-addled intelligence community. Essentially, any byzantine and convoluted bureaucracy needs careful evaluation to be followed by streamlining and consolidation.

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