D. Dowd Muska

 

This Is What Fiscal Restraint Looks Like

October 20, 2011

Many assumed it couldn’t happen, but something useful has finally emerged from the battle for the GOP presidential nomination.

It’s Ron Paul’s “Plan to Restore America.”

The document explains that President Paul would repeal Sarbanes-Oxley and Dodd-Frank, and enact a requirement “for thorough congressional review and authorization before implementing any new regulations issued by bureaucrats.” Income-tax rates wouldn’t change, but the death tax would die for good, and the levy on corporations would drop to 15 percent. The Federal Reserve, Paul’s bête noir, would get a decades-overdue audit, and he’d sign “competing currency legislation to strengthen the dollar and stabilize inflation.”

All good stuff -- the measures would do much to end America’s economic doldrums and get the nation back on a path of sustained growth.

But it’s Paul’s spending reforms that should get tea partiers really excited.

While not sweeping enough -- it retains NASA, the Department of Agriculture, and many other needless federal bureaucracies, and does nothing about Social Security and Medicare -- Paul’s budget represents a giant step toward true austerity.

The new president would prune $1 trillion in the first fiscal year of his administration. Most agencies, including the Pentagon, would see their outlays rolled back to 2006 levels, then frozen in 2014, 2015, and 2016. Five egregiously inessential cabinet-level departments -- Housing and Urban Development, Interior, Commerce, Education, and Energy -- would vanish. The out-of-control Environmental Protection Agency would suffer a 30 percent cut. Medicaid would be block-granted to the states, as would food stamps. And Paul promises to slash congressional “pay and perks,” while taking “a salary of $39,336, approximately equal to the median personal income of the American worker.”

All budgets are projections, and subject to unpleasant variables. But Paul’s number-crunchers believe that their plan would get the U.S. treasury to a surplus by 2015. (The 2011 deficit was $1.3 trillion.) By 2016, Washington’s share of gross domestic product (GDP) would dwindle to 15.5 percent -- still far too high, but headed in the right direction.

A final fact about Paul’s skinflintery: If it were implemented, assuredly over the squeals of liberals and the legacy media, the national debt would continue to rise. “Entitlement” growth ensures that even four years of “discretionary” cuts would hike the nation’s credit-card balance by $1.6 trillion -- putting you and your progeny on the hook for a total of $16.6 trillion.

“Dr. No” will not, of course, get the Republican Party’s nod to challenge Barack Obama. For reasons sacred and profane, the GOP’s core constituencies adore the warfare state. Candidates who advocate noninterventionism abroad are largely shunned.

Republicans’ foreign-policy kookery will cost him the nomination, but Paul’s inevitable loss doesn’t mean that he can’t play a huge role in the 2012 campaign. His expenditure plan offers a test to all fedpols and fedpol-wannabes. GOPers who flee from Paul’s proposed cuts cannot be considered serious advocates of fiscal restraint, and they should stare down the business end of tea-party wrath.

Exhibit A: Mitt Romney. The Republican likeliest to challenge Obama devoted scant attention to spending in his 160-page policy manifesto. He endorsed the GOP’s tepid, specifics-free “Cut, Cap, and Balance” blueprint. Defunding cabinet departments isn’t a priority for Romney, and he’s willing to accept a federal government that consumes 20 percent of GDP.

Most Republicans running for Congress are likely to mimic Romney’s strategy. Endorse a balanced-budget amendment to the Constitution. (Tough to pass, and would probably be riddled with loopholes.) Bloviate about “waste, fraud, and abuse.” (Certainly a problem, but a pittance compared to Social Security, Medicare, and militarism.) Bash “overpaid” bureaucrats. (They are indeed overpaid, but compensation right-sizing can’t offset Washington’s marquee expenses.)

Although imperfect, the Paul agenda’s gravity cannot be questioned. It’s the gold standard, so to speak, of D.C. downsizing, at least until something better comes along.

Activists should turn Paul’s plan into a weapon. Print it out, and wave it in candidates’ faces. Too “radical” for some, perhaps? Neocon mouthpiece Rush Limbaugh, who ridicules Paul and despises libertarians, virtually endorsed it. “We know that little chunks here and little chunks there are not gonna make a dent in the problem,” declared the talk-show host.

Outside of the Northeast, Republicans posture themselves as advocates of limited government. Their claims have always been more rhetoric than reality. Now, with a cratered economy and imminent federal insolvency, it’s time to make the “tough choices” they’ve long talked about.

Ron Paul has made his budget-cutting priorities clear. All Republicans running for federal office should follow suit.

D. Dowd Muska (www.dowdmuska.com) writes about government, economics, and technology. Follow him on Twitter @dowdmuska.

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