Michael Tanner on the federal budget

Recently, Michael Tanner of the CATO Institute weighed in the budget debate on the pages of the National Review. Therein, Michael Tanner got some things right, and some things wrong.

For example, he understated the costs of some discretionary agencies such as the Education Department and the Agriculture Department. The truth is that the total annual budget of the Education Department is $122 bn, and the annual budget of the AD is $130 bn. Combine them and you have a budget of $252 bn – equal to the annual cost of the Medicaid program and half of America’s defense budget!

True, one cannot balance the budget just with discretionary spending cuts, even if these two Departments are completely abolished (as they should be). The annual budget deficit ($1.65 trillion) is too big.

But Tanner got it wrong when he said “Defense, of course, accounts for another 19 percent of federal spending. It will have to be on the table if the budget is ever going to be balanced.”

Not really. Firstly, even the total DOD budget (the total military budget; the core defense budget is just one of its three components) does not account for 19% of the total federal budget – the real figure is 18.51%. But that’s a difference of less than 0.5%, so Tanner wasn’t off the mark by much.

But he’s flat wrong on the claim that “it will have to be on the table if the budget is ever going to be balanced”. No, it won’t have to be, and it shouldn’t be, for four distinct reasons.

Firstly, yes, it IS possible, as proven by the Heritage Foundation and by myself, to balance the budget without defense spending cuts. My Blueprint for a Balanced Budget relies heavily on the cancellation of the Porkulus, the end of all bailouts, and an immediate halving of the cost of the SS program, but it would, if implemented, balance the federal budget without defense spending cuts.

Secondly, Tanner probably presumes that defense spending hasn’t been cut yet. He’s wrong. The defense budget has already been reduced by $9 bn in nominal terms and $25 bn in real terms from the FY2010 level ($534 bn in nominal terms, $550 bn in real terms). And this defense cut has already hurt the military seriously.

Thirdly, other kinds of spending do not deserve the same priority status and priority treatment that defense spending does. That is because 1) defense spending pays for America’s defense, i.e. what is protecting this country, and 2) defense is a Constitutional DUTY of the federal government. Unlike entitlement spending and most domestic discretionary spending.

Fourthly, defense cuts would be penny-wise and pound-foolish. Even if you cut defense spending by 10% (i.e. $55.3 bn, using the FY2012 budget request as a baseline), you would inflict huge pain on the military and gravely weaken it, but you would reduce the annual budget deficit ($1.65 trillion) by a tiny amount – merely $55.3 billion, i.e. 3.(33)%. And yet, such defense cuts would not only gravely weaken the military, but also embolden America’s enemies to engage in blackmail or even aggression against the US – and, like after previous rounds of defense cuts, America would have to rearm and fight a new war at a large human and fiscal cost. It would be much cheaper for America to always fund defense properly.

Indeed, Tanner himself has acknowledged in the same article, in the next paragraph, that:

“In the end, the only real way to bring the federal budget into long-term balance is to reform entitlement programs, as Ryan has proposed doing. But here again, the public is reluctant to support cuts. According to the most recent Gallup Poll, two-thirds of Americans oppose cutting Social Security benefits. Even self-professed supporters of the Tea Party oppose cutting Social Security by 2–1. Nearly as many voters, 61 percent, oppose cutting Medicare.”

Entitlement reform is the ONLY way to balance the budget in the long term, or even in the short term.

The URL: http://www.nationalreview.com/articles/263972/going-hurt-michael-tanner

Please also read: http://www.nationalreview.com/articles/263257/triumph-green-eyeshade-rich-lowry


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s