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July 2008
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Chat Clussman

personal thoughts

The “Most of us have to do our part” Plan

The Republican party has come up with a way to cut $929,016,000,000 from the budget, they’ve titled the plan “Operation Offset“. Salon did a write-up with the more accurate name of “This is going to hurt you more than it’s going to hurt me.”

Basically, the plan is to to tear funds out of Medicare and Medicaid, eliminate a large chunk of foreign aid, eliminate the Corporation for Public Broadcasting, etc. It’s basically the conservative laundry list of agenda items for the last fifteen years and they’re abusing a huge national tragedy to push for this stuff.

Their hope is that the Democrats will fight this on principle so they can claim that at least they’re trying to cut down the budget. What the Democrats need to do is release their own plan. I would keep the one year delay on Medicare Prescription Drug Bill because that saves over 30 billion all by itself. I would also keep the repeal of the highway earmarks (pork), which saves another 25 billion.

But then I would roll back the tax credits for the richest one percent, estimate the value of reinstating government bids for things like Iraq and New Orleans (where’s that missing 8.8 billion again?), and cut spending on ridiculous items like missile defense that have been proven over and over again to not work. Those are just off the top of my head but they’ll probably double the savings proposed by the Republicans by themselves.

Here’s the RNC wet-dream rundown. It’s looong so I highlighted areas of particular interest.

Update: Forgot to mention, the numbers below are in millions.

Section: Tough Options 2006 Savings 5-year Savings 10-year Savings
Delay the Medicare Prescription Drug Bill for One year -30,800 -30,800 -30,800
Repeal the Highway Earmarks in TEA-LU -25,000 -25,000 -25,000
Reduce Medicaid Administrative Spending -600 -4,230 -12,860
Increase Allowable Co-pays in Medicaid -90 -1,970 -7,730
Block Grant Medicaid Acute Services -2,300 -44,000 -225,000
Reduce Farm Payment Acreage by 1% -31 -452 -941
Eliminate Subsidized Loans to Graduate Students -840 -4,170 -8,555
Base New Federal Retiree Health on Length of Service -130 -1,560 -6,330
Increase Medicare Part B Premium from 25% to 30% -4,650 -33,500 -84,770
Restructure Medicare’s Cost-Sharing Requirement -4,750 -34,230 -87,460
Impose a Home Health Co-payment of 10% -1,470 -11,800 -31,480
Update the Formula Used for Federal Pension -50 -1,305 -5,170
SUBTOTAL: Tough Options -70,711 -193,017 -508,986
Who was that section tough for again? Oh yeah, the sick and the elderly. This is robbing from the poor to give to, well, nobody.
Section: Restraining Foreign Aid 2006 Savings 5-year Savings 10-year Savings
Eliminate US Subscriptions to the European Bank -36 -184 -386
Reduce Economic Assistance to Egypt -12 -400 -1,200
Eliminate Millennium Challenge Accounts -1,750 -9,415 -24,352
Level Funding for Peacekeeping Operations -93 -500 -1,294
Eliminate International Fund for Ireland -14 -75 -195
Level Funding for Global AIDS Initiative -546 -2,938 -7,598
Level Funding for Inter-American Foundation -2 -11 -28
Level Funding for the African Development Foundation -2 -11 -28
Level Funding for the Peace Corps -8 -43 -111
Level Funding for Andean Counter-Drug Initiative -9 -48 -125
Reduce USAID Operating Expenses -57 -307 -793
Level Funding for the International Development Assoc. -107 -576 -1,489
Level Funding for Asian Development Bank -16 -86 -223
SUBTOTAL: Restraining Foreign Aid -2,652 -14,594 -37,822
Section: Reprioritization of Federal Spending 2006 Savings 5-year Savings 10-year Savings
Eliminate the National Science Foundation Math and Science Program -188 -973 -2,036
Cancel NASA’s New Moon/Mars Initiative -1,493 -11,511 -44,042
Eliminate State and Community Grants for Energy Conservation -36 -223 -479
Given the current energy and national security situations, is this really a good place to be making budget cuts?
Eliminate Money-Losing Timber Sales -130 -710 -1,550
Scale Back the Conservation Security Program -58 -2,216 -6,676
Limit Future Enrollment in the Conservation Reserve Program -14 -1,910 -5,285
Eliminate the National Parks Heritage Areas and Statutory Aid -26 -134 -280
Eliminate Federal Grants for Wastewater Infrastructure -950 -9,899 -23,332
Eliminate the Energy Star Program -75 -391 -835
This is probably one of the least expensive, most successful programs to come out of the federal government. The RNC must have a few manufacturing company donors.
Eliminate the Science to Achieve Results Program -90 -472 -1,007
Eliminate Payments to Socially Disadvantaged Farmers and Ranchers -6 -32 -83
Reduce Federal Subsidies for Amtrak -250 -1,250 -2,500
Eliminate the Next Generation of High-Speed Rail -20 -105 -220
Eliminate the New Starts Transit Program -1,204 -6,055 -12,200
Eliminate the Essential Air Service -103 -525 -1,075
Drop Wealthy Communities from CDBG -837 -4,330 -9,064
This sounds like a great idea, except that the savings should be funneled back into the poor communities so that the program can do what it was designed to do: eliminate slums. It boggles the mind that they would try to cut this money to help rebuild, what was it, oh yeah, slums.
Convert Rural Community Advancement Program to State Revolving Funds -12 -194 -4,517
Eliminate the Neighborhood Reinvestment Corporation -116 -600 -1,257
See my last comment: they want to kill a program to revitalize distressed neighborhoods (their words) to, umm, revitalize distressed neighborhoods. Anybody else seeing a trend here?
Eliminate the Community Development Financial Institutions Fund -52 -270 -566
Eliminate the Economic Development Administration -201 -1,081 -2,797
How about now? Seeing the trend yet?
Eliminate the Minority Business Development Agency -30 -161 -417
Eliminate State Grants for Safe and Drug-Free Schools -444 -2,298 -4,810
Eliminate the Even Start Program -114 -592 -1,238
Eliminate Teen Funding Portion of Title X Family Planning -95 -511 -1,322
I guess this is a perfect time to make sure teenagers don’t have access to contraceptives.
Eliminate the Administration Fees to Schools -144 -744 -1,557
Eliminate the Leveraging Educational Assistance Program -67 -345 -722
Keeping poor people uneducated isn’t really a goal of the Republican party, it’s more of an ongoing mission. After all, if you’re whole worldview is based upon the existance of a ruling elite, you need somebody to rule.
Eliminate Funding for the National and Community Service Act -560 -3,000 -6,480
End the Redistribution of Unused Federal Funds from SCHIP -20 -350 -1,140
Eliminate Childless Adult Coverage in SCHIP n/a -330 -660
Eliminate Funding for Penile Implants Under Medicare n/a -4 -8
Tie Rent Subsidies for One Person to Cost of Efficiency Apartments -62 -894 -3,146
Eliminate School Lunches for Students Above 350% of Poverty -125 -3,150 -6,690
Remove Ceiling for Collecting Overpayments from SSI -70 -425 -920
This is a great plan for taking low-income elderly and disabled and putting them on the street. I guess the plan is that they’ll die sooner and that will save money. Either that or these [censored] have never lived on a month-to-month income. A better idea would be to not overpay people in the first place. No, they want to remove restrictions on collection of overpayments. Say you get overpaid and don’t know it. Months later the problem is found and the funds reversed, only you don’t have enough funds to cover the reversal. Oh well. Adios Amigo.
Verify Income of Earned Income Tax Credit Participants -8,500 -42,500 -85,000
Eliminate Fiscal Assistance to District of Columbia -154 -800 -1,675
Require IRS to Deposit Fees Collected by Treasury -91 -473 -989
Eliminate Presidential Election Campaign Fund -55 -275 -550
Eliminate the Federal Anti-Drug Advertising -122 -631 -1,320
Eliminate Federal Funding for the Corporation for Public Broadcasting -400 -2,152 -5,566
Raise the Threshold for Davis-Bacon Coverage -200 -1,025 -2,130
They want to raise the minimum cost of contracts that qualify for Davis-Bacon from $2,000 to $1,000,000! That would effectively eliminate Davis-Bacon protections. For those contracts that still qualify, well, just split them up into smaller contracts and POOF–no more Davis-Bacon.
Charge Federal Employees for Parking -140 -720 -1,540
Eliminate Legal Services Corporation -331 -1,781 -4,606
Eliminate High Intensity Drug Trafficking Area Program -227 -1,221 -3,159
United States Postal Service Foregone -43 -231 -598
Decline Member Pay Raise -2 -9 -24
Reduce Bureau of Land Management Construction -6 -32 -83
Reduce Fish and Wildlife Construction -26 -140 -362
Eliminate Funding for the National Endowment for the Arts -126 -678 -1,753
Eliminate Funding for National Endowment for Humanities -143 -769 -1,990
Eliminate Funding for the Forest Service’s Economic Action Program -10 -54 -139
Reduce Funds for the Water Quality Cooperative Agreement -15 -81 -209
Reduce Funds for Bureau of Indian Affairs School Construction -36 -194 -501
Reduce Funds for Forest Service Capital Improvements -60 -323 -835
Reduce Funds for the NCRS Operations -26 -140 -362
Reduce Funds for Waste Disposal Grants -116 -624 -1,614
OK, so far that’s $3,604,000,000 that they want to cut from environmental protections including clean water and waste disposal. Do they think the only job of the federal goverment is to line their own pockets? (Rhetorical question, please ignore.)
Reduce Funds for Cooperative State Research and Education -110 -592 -1,531
Eliminate Rural Empowerment Zone Grant -10 -54 -139
Another “revitalize distressed communities” program to cut–have we got ‘em all yet?
Eliminate Citrus Canker Compensation -10 -54 -139
Reduce DOE Environmental Management -400 -2,152 -5,566
This program is to “mitigate the risks and hazards posed by the nuclear weapons production and research” and their proposed cuts will only have “minimal negative impact on program operation.”
Eliminate the Appalachian Regional Commission -39 -210 -543
Eliminate the Denali Commission -3 -16 -42
Eliminate Native Hawaiian Funding -40 -215 -557
Level Funding for Community Health Centers -100 -538 -1,392
Synopsis: poor people should pay for their own health care.
Reduce Funding for the Centers for Disease Control -1,797 -9,668 -25,006
Reduce Funding for the Airport Improvement Program -600 -3,228 -8,349
SUBTOTAL: Reprioritization of Federal Spending -21,530 -127,265 -307,180
Section: Federal Bureaucracy 2006 Savings 5-year Savings 10-year Savings
Eliminate Attaché Positions in the Foreign Agricultural Service -46 -247 -640
Reduce Funding for Department of Education Administration -6 -28 -57
Level Funding DOE Departmental Administration Funding -15 -81 -209
Level Funding for FAA Operations -329 -1,770 -4,578
Level Funding for Treasury Departmental Offices -31 -167 -432
Level Funding for the Federal Building Fund -552 -2,970 -7,681
Level Funding for OMB -9 -48 -125
This one is just funny. Even when they’re trying to balance the budget they still want to make it as hard as possible for the OMB to publish accurate budget information. I guess they don’t believe in the merits of their own plan.
Level Funding for Agriculture Building and Facilities -20 -108 -278
Reduce Funding for the Agriculture Research Service -62 -334 -863
Level Funding for GSA -108 -581 -1,500
SUBTOTAL: Federal Bureaucracy -1,178 -6,334 -16,363
Section: Corporate Welfare 2006 Savings 5-year Savings 10-year Savings
Just one comment about this next section and the highlighted entries: ignore the title of this section. Clearly, when Republicans say “corporate welfare” they actually mean “environmental initiatives that could eventually free us from Middle East oil.”
Eliminate the Applied Research for Renewable Energy Sources Program -314 -1,959 -4,202
Eliminate the Clean Coal Technology Program -50 -259 -543
Eliminate the FreedomCAR Program -163 -845 -1,774
Eliminate the Research Initiative for Future Agriculture Systems -300 -1,100 -2,100
Eliminate the Export-Import Bank and OPIC -84 -616 -1,507
Limit the Repayment Period of Export Credit Guarantees -147 -735 -1,470
Impose a Fee on the GSEs Investment Portfolio -1,624 -8,762 -19,885
Require GSEs to Register with the SEC and Pay Fees -490 -1,250 -2,710
The Republicans want to make Fannie Mae and Freddie Mac (among others) pay market fees and additional fees to make the programs uncompetitive (and thus useless) in the marketplace. Then their investment banker buddies (and themselves via their blind trusts) can take over these portfolios and start collecting fees. These two little gems amount to backdoor privatization of a government trust. That’s the great thing about being Republican: the can-do spirit. Can’t rob the Social Security coffers? Well then, rob another part of government when nobody’s looking. Social Security will still be waiting for you.
Eliminate the ITA’s Trade Promotion Activates -401 -2,125 -4,579
Eliminate the Advanced Technology Program -139 -721 -1,523
Eliminate the Hollings Manufacturing Extension Partnerships -110 -573 -1,210
Repeal the Continued Dumping and Subsidy Offset Act -1,300 -3,000 -4,500
Eliminate the Foreign Market Development Program -24 -160 -335
Eliminate the Market Access Program -3 -231 -531
Eliminate the Export Enhancement Program -28 -151 -390
Eliminate the Hydrogen Fuel Initiative -183 -985 -2,547
I liken this program to the construction of highways, power grids and other national infrastructure projects. The cost would be too prohibitive for private industry to develop, especially in a chicken/egg scenario where they can’t recoup any of the money until after the infrastructure already exists. This program is absolutely essential to the 21st century and ties into all of the energy and national security concerns that were previously mentioned.
SUBTOTAL: Corporate Welfare -5,280 -23,472 -46,258
Section: Defense and Homeland Security 2006 Savings 5-year Savings 10-year Savings
Speed the Sale of Old and Excess Naval Vessels -23 -178 -444
Consolidate the Military Exchanges -76 -796 -1,882
Close the Domestic Dependent School System 18 -126 -788
Reduce DOD Administrative Accounts -10 -50 -100
Restrict First-Responder Grants to At-Risk Communities -630 -3,260 -6,826
I want to once again point out that the destruction wrought by Hurricane Katrina was the impetus for these proposed budget cuts. I agree with the idea that there shouldn’t be a floor requiring every part of the country to receive a certain percentage of the funds. I also agree that funds need to be applied better. But cutting almost seven billion dollars from first responders? This is just insane. There are no words left to describe how stupid, inept, mean, and evil this plan is.
Introduce HSAs as a TRICARE Option -20 -807 -2,367
Ah yes. Tens of billions being wasted on ineffectual pipe-dream ideas that well-connected defense contractors lap up and the Republican idea of reforming the DOD and DHS is to cut $2,400,000,000 in healthcare for our military personnel. Good to know the Republican’s are once again showing their support for our troops.
SUBTOTAL: Defense and Homeland Security -741 -5,217 -12,407
Title I: Tough Choices for Tough Times -70,711 -193,017 -508,986
Title II: Restraining Foreign Aid -2,652 -14,594 -37,822
Title III: Reprioritization of Federal Spending -21,530 -127,265 -307,180
Title IV: Containing the Federal Bureaucracy -1,178 -6,334 -16,363
Title V: Eliminating Corporate Welfare -5,280 -23,472 -46,258
Title VI: Rational Reforms to DOD and DHS -741 -5,218 -12,407
TOTAL -102,092 -369,899 -929,016
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Market Clearing or Price Gouging

When looking at the ongoing disaster in New Orleans, a part of the discussion has to involve already constrained oil supplies. There have been large jumps in the price of gasoline in response to the disaster, but not as a result of it. That is because the gas you buy at the pump was bought months earlier at wholly different market prices. There shouldn’t be any immediate effect, but there is.

Some people, the President included, have called it price gouging. Others, like Mark Kleiman, call it market clearing, an economic principle that translates into equality of supply and demand. Basically, the price will go up to a point where it causes demand to drop to a level equal or below that of supply, thus preventing a shortage.

Technically they’re both right. However, looking a three dimensional problem from a one dimensional standpoint of economics alone is not only shortsighted, it’s inhumane. The alternative to “market clearing” is typically rationing, whereby everybody is alloted the same amount of that good based on supply. Rationing is absolutely essential for essential goods.

People need oil and gas to survive. With fall, and then winter, approaching, market clearing could just as well be called “let the poor people freeze to death.” Or, since the price of transportation is included in the price of goods for sale in a given local market, you could call it “let the poor people starve to death.” The point is that a civilized society cannot, and must not, allow the basic necessities of survival to be priced out of reach for any portion of that society.

P.S. I’m not doing to good on my decision to scale back on my political reading/posting. I’m still working on that.

P.P.S. Yes, I know I’m agreeing with Bush but I don’t believe in demagoguery. It’s important that you always stand up for what you believe. Besides, even Bush is bound to get something right given a long enough span of time.

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