Republicans Forced To Compromise
No person is more annoying or intriguing than a sometimes-principled politician. Oregon Sen. Mark Hatfield enraged fellow Republicans when he cast the deciding vote against the balanced-budget amendment. Although he backed a different version of the amendment of 1982, he opposed this year’s proposal so vehemently that he vowed to resign his Senate seat rather than toe the party line.
A few GOP members wanted to punish the meddlesome Oregonian by bumping him from his chairmanship of the appropriations committee. But that effort fell short because it threatened to divert attention from the central issue: Now that Republicans have lost the option of blaming spending cuts on the amendment, they must decide whether to assail big government or abandon their fledgling revolution.
So far, the status quo has won. The House of Representatives recently rescued food stamps from extinction, for instance, even though the program is almost impossible to justify in its present form. Very few Americans lack money for food, and there is no significant nutritional difference between the diets of the rich and poor. Furthermore, the program suffers from horrendous fraud rates, and research indicates that food stamps, combined with Aid to Families with Dependent Children, actually lead poor women to stop working, stay on welfare for extended periods of time and have children out of wedlock.
That action wasn’t the only sign of capitulation. House staffers report that Republicans are backing away from a proposal to start charging interest on student loans the moment kids borrow the money rather than when they leave school.
This equivocating exposes a potentially fatal weakness in the Party of Lincoln: Conservatives seem afraid to change things. They tremble in terror at the prospect that Democrats might accuse them of hurting graduate students, retirees, sucklings or anybody with an adjusted gross income of less than $1 million. As a result, Republicans who promised last fall to go boldly where no Congress has gone before can’t pull the plug on intellectually indefensible food vouchers or make Joe College follow the same lending rules as everybody else.
Last week, a couple of unlikely bedfellows offered Newt Gingrich, Bob Dole et al a way out of their predicament. The Cato Institute, a libertarian think tank, and the Progressive Policy Institute, a creation of the Democratic Party, have just recommended a frontal assault on corporate welfare - federal programs that do little more than shuttle workers’ earnings to business interests that don’t need the dough.
Their suggestion leads to a can’t-miss political strategy: Cut off the Fortune 500 before wiping out efforts that, in theory, help the poor and downtrodden.
Cato scholars Stephen Moore and Dean Stansel have identified nearly $87 billion worth of direct federal spending designed primarily to make life easier for already-successful capitalists.
Their hit list includes plenty of Republican favorites, including farm subsidies and price supports. Here’s one common-sense proposal: Make the timber industry pay for roads in national forests. The two scholars note that “over the past 20 years, the Forest Service has built 340,000 miles of roads - more than eight times the length of the interstate highway system - primarily for the benefit of logging companies.”
They also blast “public-private” partnerships, such as the Clinton administration’s Technology Reinvestment Project, which hands cash to such needy outfits as Texas Instruments, 3M, the Chrysler Corp., Boeing, Rockwell and Hewlett Packard.
Moore and Stansel point out that corp-fare giveaways suffer the very same shortcomings as “regular” welfare efforts - grotesque inefficiency, soaring loan delinquency rates (as high as 50 percent for Farmers Home Administration notes) and widespread corruption.
Their calculations also indicate that business goodies (defined as grants, tax breaks and trade preferences) now cost nearly as much as the welfare state, which consumes between $250 billion and $300 billion a year. That’s probably a low estimate, since corporations get rich off of the Great Society, too. As much as two-thirds of the money spent on programs for low-income Americans actually lines the pockets of folks who don’t need a dole - such as welfare bureaucrats, agribusiness barons and lawyers.
As long as members of Congress treat budget balancing as a simple accounting exercise - trimming some money from Program A, a little from Agency B, and so on - the budget will continue to enrich the wealthy at the expense of everybody else. The only politically feasible way to chop the budget also happens to be the only morally defensible way. Target everything that isn’t a vital federal responsibility, and execute corp-fare first.
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