Budget

by

More Budget Talk: The Deficit

After I posted yesterday, I started thinking about the deficit that the Republican’s are always yammering on about.  I found this chart.

 

 

This analysis is from the Center on Budget and Policy Priorities based on information from the Congressional Budget Office.

 So even if we don’t stop spending the the Wars, if we end the Bush tax cuts, we could fund all kinds of new stimulus programs (like COPS and education programs) that could help prevent more layoffs in the public sector,  fix medicare and social security and still begin to pay off the debt.  We might even extend umemployment benefits and fund programs to help unemployed homeowners save their property from foreclosure. 

The question for 2012 is how to convince people that the Ryan budget, endorsed by all the Republican candidates and most Republican members of Congress, will actually increase the projected defict by maintaining the tax cuts.

by

2012 Budget Talk

There are three budget proposals on the table that have been made public:  The President’s, Paul Ryan’s, and the Progressive Caucus.  So far all the talk is on Ryan’s cutting of Medicare.  It has defined the Republican politics.  Newt Gingrich found that out.  As I understand the President’s proposal it uses the 2008 budget as a baseline – a baseline we are already below. But no one is talking much about the Progressive budget.

The Progressive and Ryan budgets are good symbols of the world views currently held by many on the two sides.  The Democrats being democrats are not as monolithic and many will object to the severe defense cuts in the Progressive budget, but it seems to me that these proposals can be the end points that let everyone meet in the middle.

The National Priorities Project compares the two proposals.

  Congressional Progressive Caucus People’s Budget Rep. Ryan’s The Path to Prosperity
     
Underlying Philosophy Strengthens role of government in reducing income inequality and providing social safety net. Reduces deficit through combination of increased revenues and reductions in spending Relies on private sector to spur economic growth and employment using a trickle down approach. Reduces deficit solely through spending cuts
     
Revenues Shifts tax burden towards higher income earners and corporations Decreases taxes for wealthy and corporations
Individual Taxes Allows for the expiration of Bush era tax cuts Maintains the Bush era tax cuts
  Reverts highest individual tax brackets to 36% and 39.6% from 33% and 35% Cuts the top individual tax rate to 25% from 35%
  Enacts new tax brackets for high income earners (45%-49% for $1 million – $1 billion range Consolidates the current six tax brackets
  Taxes capital gains and dividends as ordinary income Eliminates $800 billion in tax increases imposed by the Patient Protection and Affordable Care Act
  Limits tax benefit of itemized deductions to 28%  
  Enacts progressive estate tax in which larger estates pay higher tax rates  
Corporate Taxes Imposes financial transaction tax on derivatives and speculative financial products Reduces corporate tax rate to 25% from 35%
  Repeals tax deductions and preferences for oil, natural gas and coal producers Eliminates loopholes and deductions that allow some corporations to pay no tax
  Taxes US corporate foreign income as it is earned instead of as dividend  
  Imposes tax equal to 0.15% of covered liabilities for banks with more than $50 billion in assets  
     
Investment Emphasizes public investment as engine for job creation and economic growth Believes that public investment crowds out private investment
  Rebuilds infrastructure – highways, railways, National Infrastructure Bank  
  Funds highway construction through increase in Gasoline Tax of 25 cents  
     
Health Care and Social Safety Net Maintains government role in providing vital public services and programs Limits government provision of social programs
  Maintains Medicare reimbursement rates for doctors Privatizes Medicare starting in 2022 for new beneficiaries
  Establishes public health care option in health care exchanges starting in 2014 Repeals Patient Protection and Affordable Care Act
  Negotiates drug prices with pharmaceutical companies Raises age of Medicare eligibility to 67 from 65
  Increases Social Security benefits based on higher employee contributions Converts Medicaid into block grants to the states
  Raises Social Security contribution limits, including employer contributions for high earners Converts SNAP (food stamps) into block grant to the states. Requires recipients to work or get job training
    Reduces Pell grants to 2008 levels
    Imposes time limits and work requirements for recipients of federal housing assistance (Section 8)
     
Defense Makes significant cuts in annual defense spending and ends the wars in Iraq and Afghanistan in FY2012 Largely exempts the military from spending cuts
Funding for Security Generates $2.3 trillion in savings compared to the CBO baseline over the FY2012-2021 period Provides real growth for “security” in each year through 2021, totaling $214 billion in new spending
Annual Pentagon Spending Reduces DoD baseline budget by $692.2 billion over 10 years compared to CBO, or $816.7 billion compared to the Obama Pentagon spending plan Reduces DoD waste by $178 billion. Reinvests $100 billion of this into key combat capabilities and uses $78 billion to reduce the deficit
Overseas Contingency Operations (Iraq & Afghanistan) Provides $161.4 billion for “Overseas Contingency Operations” (OCO) in FY2012 and withdraws U.S. forces from Iraq and Afghanistan. Provides no funding for OCO starting in FY2013, saving $1.6 trillion between 2013-2021 compared to the CBO baseline Continues Iraq and Afghanistan wars and provides $117.8 billion in FY2012. Anticipates over $1 trillion in savings from reduced costs of the “Global War on Terror” over the next decade by using the Pentagon’s $50 billion annual “placeholder” for OCO costs
     
Government Maintains size and role of government Reduces size and scope of government
  Provides percentage increases for discretionary programs Reduces size of government to 20% of GDP by 2015 and 15% of GDP by 2050
    Reduces non-security discretionary spending to pre-2008 levels
    Reduces public sector employment by 10% through attrition by 2014
    Institutes government pay freeze through 2015
    Increases federal employee contributions to retirement
    Privatizes Fannie Mae and Freddie Mac
    Decreases regulation of the energy industry
    Establishes a binding cap on total spending as a percentage of the economy
    Requires any increase in debt levels to be accompanied by spending reductions

I couldn’t find a chart that adds the President’s budget proposal, but here is a short summary.

Key Budget Facts

  • The Budget includes more than $1 trillion in deficit reduction – two-thirds of it from cuts — and puts the nation on a path toward fiscal sustainability so that by the middle of the decade, the government will be paying for what it spends and debt will no longer be increasing as a share of the economy.
  • The President meets his pledge to cut the deficit he inherited in half by the end of his first term.
  • Five-year non-security discretionary spending freeze will reduce the deficit by over $400 billion over the next decade and bring this spending to the lowest level since President Eisenhower sat in the Oval Office.
  • 10-year Deficit Reduction:  $1.1 trillion, excluding war savings and not extending 2001 and 2003 tax cuts for high-income earners. Two-thirds are from spending cuts.
  • 2011 Projected Deficit: $1.645 trillion, 10.9 percent of GDP; 2012 Projected Deficit: $1.101 trillion, 7.0 percent of GDP; 2015 Projected Deficit: $607 billion, 3.2 percent of GDP; 2017 Projected Deficit: $627 billion, 3.0 percent of GDP

The budget itself is composed of proposals made by federal agencies under guidelines from the White House budget folks, but it seems to be a timid version of the Progressive Budget.

The choices are pretty clear.  And the news this week – increased unemployment and no job creation – has everyone saying it is bad news for the President.  But with the layoffs of public employees is it surprising that unemployment is rising?  Wasn’t keeping the Bush tax cuts supposed to create jobs?  Where exactly are all these jobs?  The Republicans are all about not raising taxes on anyone and cutting the size of government and government benefits.  They don’t care about the widening gap between rich and poor but seem to be perfectly happy to accept tax payer paid benefits.   Like Congressman Woodall. (R- GA) who thinks we should all be self reliant except for him.

The bottom line:  We have two visions of American and the one that wins will determine our future.

by

The case for ending tax cuts

This week Kenneth Feinberg announced the list of banks that took tax payer money while paying our huge bonuses.  On NPR, John Ydstie reported that

In the fall of 2008, with the financial system on the verge of collapse, 17 large banks that were being propped up by taxpayers doled out $1.6 billion in bonuses.

On Friday, the Obama administration’s pay czar, Kenneth Feinberg, passed judgment.

According to Feinberg, “…many were over $10 million per individual.”

And what exactly have these individuals done with their bonuses?  Have they created jobs?  I don’t think so.

Which brings me to the tax cut which is looming as the next hot potato for the Democrats and for President Obama.  We all remember the conversation the President had with Joe the Plumber during the campaign during which Obama, who clearly thought he was talking with someone rational, tried to explain that he was not going to raise taxes on the middle class.

The New York Times reports

Democratic leaders, including Mr. Obama, say they are intent on letting the tax cuts for the wealthy expire as scheduled at the end of this year. But they have pledged to continue the lower tax rates for individuals earning less than $200,000 and families earning less than $250,000 — what Democrats call the middle class.

Most Republicans want to extend the tax cuts for everyone, and some Democrats agree, saying it would be unwise to raise taxes on anyone while the economy remains weak. If no action is taken, taxes on income, dividends, capital gains and estates would all rise.

…

We do not buy into the theory that because the economy is still recovering, extending tax cuts for the highest earners is a necessary or effective policy response,” said Gene Sperling, counselor to Mr. Geithner.

“While we are supporting measures like small-business lending and tax cuts to spark growth,” Mr. Sperling added, “it is also important to show the world that we are following through on our commitment to long-term fiscal discipline.”

Senator Bernie Sanders of Vermont makes the case for the change in the Nation.

The American people are hurting. As a result of the greed, recklessness and illegal behavior on Wall Street, millions of Americans have lost their jobs, homes, life savings and their ability to get a higher education. Today, some 22 percent of our children live in poverty, and millions more have become dependent on food stamps for their food.

And while the Great Wall Street Recession has devastated the middle class, the truth is that working families have been experiencing a decline for decades. During the Bush years alone, from 2000-2008, median family income dropped by nearly $2,200 and millions lost their health insurance. Today, because of stagnating wages and higher costs for basic necessities, the average two-wage-earner family has less disposable income than a one-wage-earner family did a generation ago. The average American today is underpaid, overworked and stressed out as to what the future will bring for his or her children. For many, the American dream has become a nightmare.

 But, not everybody is hurting. While the middle class disappears and poverty increases the wealthiest people in our country are not only doing extremely well, they are using their wealth and political power to protect and expand their very privileged status at the expense of everyone else. This upper-crust of extremely wealthy families are hell-bent on destroying the democratic vision of a strong middle-class which has made the United States the envy of the world. In its place they are determined to create an oligarchy in which a small number of families control the economic and political life of our country.

The New York Times story points out how difficult changing the tax policy will be as it will involve many different element.

Congress must also wrestle with the estate tax, which lapsed last year but will automatically be reinstated effectively at a 55 percent rate on Jan. 1 for estates larger than $1 million. Lawmakers must also deal with an array of other provisions, including tax rates on dividends and capital gains, and the Alternative Minimum Tax, which has been adjusted annually to prevent millions of middle-class families from paying higher tax bills. The child tax credit would also be reduced.

So what should the strategy be?

Negotiations are expected to start in the Senate, where it is hardest for Democrats to advance legislation because of Republican filibusters. But some Democrats say a fallback plan would be to have their larger majority in the House approve a continuation of the lower rates just for the middle class right before the election, almost daring Republicans to oppose them.

In that case, Democrats say, Republicans who opposed the bill would be blocking a tax cut for more than 95 percent of Americans to defend tax cuts for a relatively few wealthy households. Republicans are readying an arsenal of economic data to portray the Democrats as endangering the precarious recovery and harming small-business owners, some of whom are taxed at the top personal income tax rates.

…

But some lawmakers, including Mr. Wyden, [Senator from Oregon] say the deficit concerns and the attention on the debt commission could help forge a deal: a short-term continuation of the tax cuts for the middle class, and perhaps some new tax breaks for businesses, that would buy lawmakers time to undertake a broad overhaul of the tax code in the next Congress.

It will be interesting to see if a change for the middle class can be made before the election and even more interesting to see what the National Commission on Fiscal Responsibility and Reform reports in December.

I am not an economist, but won’t the revenue generated by increasing taxes on wealthy individuals and corporations making over a certain amount – or that off shore their jobs-  help the deficit?   And I wonder if some are not actually paying more on their unemployment than those bankers are on their bonuses?

by

Union negotiations and health care benefits

Next week my bargaining unit will have an all employee meeting to prepare for bargaining for a new contract.  Our current contract, like a lot of city contracts, ends September 30.  So what will be the most contentious issues:  Wages and Health Care.

Last year, we narrowly voted to support the Mayor by putting off a scheduled 2.5% raise what was to be effective at the beginning of the current contract year.  What will happen to that raise?  We gave up money under the general threat of layoffs – a ridiculous proposition in my unit which is about 95% federally funded and with stimulus funds to hand out, we are swimming in money compared to general funded agencies like the libraries, police and  schools.  The teachers and police, by the way, voted against a freeze and no one was laid off – at least not yet.  I judge our changes of getting any kind of COLA to be slim to none – except maybe that elusive 2.5%.

So that leaves health care benefits.  I admit we do have a great deal.  The employee paid part is low and the co-pays small but it does cost the city a bundle.   This is a chart from the Boston Globe.

Looking at the chart it makes sense that we would agree to joing GIC.  And certainly retirees whould join Medicaid.  (My bargaining unit agreed to that last year for future retirees.)  But here are the political problems.

Sean Murphy, in his series of Globe articles, writes

Public employee unions are leery of changes to municipal health care plans.

Brad Tenney, secretary-treasurer of the Professional Fire Fighters of Massachusetts, an umbrella group of local unions, said his members are willing to “sit down with leaders on Beacon Hill and in the municipalities to reach a meeting of the minds.’’

“We recognize the significant cost of health care,’’ he said. “But we feel it is unfair to look at health insurance in a vacuum. Members gave up pay raises or accepted smaller pay raises through the years for the health care benefits they have.’’

Public employee unions and retiree groups, which make generous donations to the treasuries of many state officer-holders, are well-connected on Beacon Hill.

In brief interviews on Monday, House Speaker Robert DeLeo and Senate President Therese Murray expressed little desire to strip union employees of long-held collective bargaining rights. Murray also said she did not believe the GIC was capable of accepting cities and towns without increasing its staff.

The GIC provides health insurance for about 300,000 state employees, retirees, and elected officials, including employees and retirees of numerous independent authorities. State law allows the GIC to adjust the amounts subscribers pay in premiums and copayments without union negotiations.

I think that last sentence is at the heart of why a lot of unions, including mine, are reluctant to endorse the move to GIC, but I think it will be a big part of the bargaining this year.  I also think Tenney has it right that health insurance isn’t something to be looked at in a vacuum.  I was on the bargaining team last round and we worked very hard to make sure that the combination of wage increases and health care costs did not result in a negative amount for any employees.

Kevin Cullen sums it all up in his column in the Sunday Globe

In the case of cities and towns, we taxpayers are the owners, and we’ve got no gun. Taxes come out of a spigot we can’t shut off. And if we don’t pay taxes, we’ll be escorted to jail by some guy whose health plan we’re paying for. The idea that taxpayers are forced to underwrite health care plans that the vast majority of us can only dream about is more than galling.

But aside from being good doobies, and in some cases averting layoffs, what’s the incentive for the unions to give up their benefits?

Before you go bashing the unions, which is irresistible in this case, would you, short of having that gun to your head, give up benefits?

After Murphy’s stories ran, the Boston Foundation put out a report saying that the only way we can stave off the financial ruin of many cities and towns is for the Legislature to stand up to the vested interests and change the law, forcing municipal employees to shoulder more of their health care costs. The report also urged mayors and other municipal executives to force retirees onto Medicare at 65.

So the financial solvency of many cities and towns rests on the premise that politicians will do the right, as opposed to the expedient, thing by going after two of the most politically active demographic groups in the state, the unions and retirees.

God help us.

Murphy’s stories have caused understandable anger. But they should also cause everybody to pick up the phone and tell the pols in Washington they have to put aside the ridiculous charade that has passed for debate and produce something that will improve the way health care gets doled out and, just as important, rein in runaway costs.

It is hard to say what will happen with municipal unions.  I have a feeling that since we can’t strike, we will be working without a contract for a while.  But there is some hope.  The workers from one of the largest supermarket chains have announced just a short while ago that a strike had been avoided.

Grocery workers this morning approved a new contract with Stop & Shop Supermarket Co., ending months of tense negotiations and averting a threatened strike.

A day after reaching a tentative agreement with the supermarket chain, some 2,000 union members agreed to a three-year deal that will boost wages and preserve benefits, said a spokesman for the area branch of the United Food and Commercial Workers.

“Through the hard work of negotiators, we were able to reach an agreement that maintained our great health and pension benefits and provided general wage increases,” said Jim Carvalho, a spokesman for UFCW Local 1445, which represents 36,000 Stop & Shop employees in southern New England.

So maybe there is hope.  And the bottom line is everyone should have access to the kind of benefits government workers have.

by

Rethinking budget priorities

In a recent op-ed column in the New York Times, Nicholas Kristof asks a simple question:  Prisons or Health Care?  We could expand that to ask the states, education or prisons?

At a time when there is no state that is not having trouble balancing its budget and cuts are being made to things like physical education and after school programs while class sizes are increasing, I haven’t heard anyone talk about cost we pay for incarceration.  And our prisons are also overcrowded.  There was a recent distrubance in the Middlesex County jail during which water pipes were destroyed leaving the prison uninhabitable.  We taxpayers will pay to reconstruct the jail, of course.

Why is no one talking about reducing the prison population as a way to save money?  We’ve known for a long time that the three strikes rule is great in baseball, but not so great when it comes to criminal justice, but I haven’t heard of anyone who has repealed their law.

To quote Kristof

It’s time for a fundamental re-evaluation of the criminal justice system, as legislation sponsored by Senator Jim Webb has called for, so that we’re no longer squandering money that would be far better spent on education or health. Consider a few facts:

¶The United States incarcerates people at nearly five times the world average. Of those sentenced to state prisons, 82 percent were convicted of nonviolent crimes, according to one study.

¶California spends $216,000 annually on each inmate in the juvenile justice system. In contrast, it spends only $8,000 on each child attending the troubled Oakland public school system, according to the Urban Strategies Council.

¶For most of American history, we had incarceration rates similar to those in other countries. Then with the “war on drugs” and the focus on law and order in the 1970s, incarceration rates soared.

¶One in 10 black men ages 25 to 29 were imprisoned last year, partly because possession of crack cocaine (disproportionately used in black communities) draws sentences equivalent to having 100 times as much powder cocaine. Black men in the United States have a 32 percent chance of serving time in prison at some point in their lives, according to the Sentencing Project.

I think Jim Webb is becoming one of my favorite Senators.

Senator Webb has introduced legislation that would create a national commission to investigate criminal justice issues — for such a commission may be the best way to depoliticize the issue and give feckless politicians the cover they need to institute changes.

“There are only two possibilities here,” Mr. Webb said in introducing his bill, noting that America imprisons so many more people than other countries. “Either we have the most evil people on earth living in the United States, or we are doing something dramatically wrong in terms of how we approach the issue of criminal justice.”

Opponents of universal health care and early childhood education say we can’t afford them. Granted, deficits are a real constraint and we can’t do everything, and prison reform won’t come near to fully financing health care reform. Still, would we rather use scarce resources to educate children and heal the sick, or to imprison people because they used drugs or stole a pair of socks?

by

Cutting the Defense Budget

How do you tell someone their favorite defense program is no longer going to be funded?  Secretary Gates did it as well as anyone could have when he made his announcement earlier this week.  I think that will turn out to have been the easy part.

So what are people saying about his proposals?

From the Boston Globe  article titled “Deep Cuts, New Chances”

For the defense sector, which in recent years has posted big profits from a rapid run-up in military spending, the new focus was a mixed message. Big programs appear to be in jeopardy, but others may be built up under Gates’ plan.

“This budget represents an opportunity, one of those rare chances to match virtue to necessity, and ruthlessly separate appetites from real requirements,” Gates said of his $534 billion spending plan for the 2010 fiscal year.

Many defense stocks jumped Monday even as the broader market fell. Shares of Lockheed Martin Corp. and Northrop Grumman Corp. each rose nearly 9 percent. Analysts said the big gains, which occurred as Gates made his early afternoon speech, were likely because the budget cuts were not as bad as some investors had anticipated.

The New York Times said the reaction was mixed

Members of Congress and advocates for the armed services pushed back on Tuesday against Defense Secretary Robert M. Gates’s plans to pare billions of dollars from a variety of Pentagon weapons systems, but others said that the cuts were prudent and that fights over them would be limited to several leading programs.

Military analysts said the biggest lobbying campaigns would be focused on Mr. Gates’s proposed cutbacks in the F-22, the advanced stealth fighter that critics call a relic of the cold war, as well as his trimming of the Army’s $160 billion modernization project, called the Future Combat Systems.

Members of Congress from Georgia and Oklahoma, where the jet and the Army project mean jobs, promised a fight. The arguments, which were frequently directed by Republicans against one of their own — Mr. Gates, one of two Republicans in President Obama’s cabinet — were cast in terms of national security and moral responsibility.

But the best commentary is from Jon Stewart in a segment titled “Full Metal Budget”

The fight between regions, technologies and the future of the military has begun.

by

Republican April Fool

Last week the Repbulicans released a budget with no numbers .   Today, April First, they released one with numbers.  Who stages their events and didn’t they know what day it is?

The Washington Post’s Lori Montgomary wrote

After getting blasted last week for presenting a budget plan light on details, House Republicans today unveiled a more complete proposal that would cut taxes for business and the wealthy, freeze most government spending for five years, halt spending approved in the economic stimulus package and slash federal health programs for the poor and elderly.

This seems to be back to the future.  Didn’t we already try this?  Representative Paul Ryan who presented the alternative said it offers “lower spending, lower deficits, lower debt and more jobs.”  The argument is always that lower taxes for businesses (repeat the mantra “the United States has the highest corporate tax rates in the world.”) will create jobs.  I guess that after Boehner and Cantor, the party needed to try a new face.

Here is Dan Gross on 1600 Pensylvania Avenue with David Gregory.

The White House Reaction

“If you expected a GOP alternative to the failed policies of the past that got our country into the worst economic crisis since the Great Depression, then I have two words for you: April Fool’s,” said Kenneth Baer, communications director for the Office of Management and Budget.

by

More on the Party of Zero

In case you haven’t been reading fivethirtyeight.com since the Presidental election, you really should check in once in a while.  There is Nate Silver’s advance look at the the details to be released later.

Eric Cantor is said to want to eliminate North Dakota rather than Idaho, while Thaddeus McCotter has suggested using the balance of TARP funds to purchase scratch-off tickets

You have to see the diagram to get the rest.

by

From the Party of “No” to the Party of “Zero”?

What’s up with the Republican House leadership anyway?  After being criticized by all stripes of poltical commentators and just ordinary citizens for not offering any alternative to the President’s proposed budget, they released an eighteen page booklet with no numbers.  I repeat, no numbers.

According to David Gregory on MSNBC’s First Read,

Dude, where’s my budget? Let’s be honest: Yesterday’s House Republican budget rollout was a P.R. disaster for the GOP. “Here it is, Mr. President” was the title of the GOP Leader blog touting that they had answered Obama’s dare to produce a budget. The problem — their budget rollout didn’t contain any hard budget numbers or deficit projections. They say those hard numbers will come out next week. But now we learn that Reps. Eric Cantor and Paul Ryan objected to unveiling yesterday’s “blueprint,” but were overruled by Reps. John Boehner and Mike Pence. But bigger than any internal disagreements or any criticism about a lack of details is the fact that yesterday’s GOP non-announcement moved the attention away from the Obama-vs.-congressional Democrat storyline to the GOP’s lack of a budget. In fact, after yesterday, the White House and congressional Democrats can agree on one thing: The GOP — at least until next week — is the “Party of No.” What’s more, it puts more pressure on Ryan to truly put out a comprehensive budget alternative; Also, this episode could end up creating a rift in the GOP over how to combat the Obama White House. After all, Senate Republicans wanted nothing to do with an alternative, and now Mitch McConnell, et al are either laughing at their House GOP colleagues, furious at them, or both.

As proof that the Democrats are refocusing on the Republicans rather than each other is the new Democratic Party video.  Kate Phillips writes in the New York Times Caucus

As the House and Senate head toward a heavy budget battle next week, Republicans have been facing criticism from the White House and from Democrats over whether they have offered a real alternative when it comes to the proposals on the table.

In the Senate, what Republican leaders are promising is a lot of amendments. But in the House, Republicans held a news conference yesterday to announce that, despite President Obama’s remarks to the contrary, they did have a plan of their own.

Carl Hulse, chief congressional correspondent of The New York Times, reported that Representative John A. Boehner, the minority leader, was grilled by reporters on Capitol Hill because the blue 18-page “recovery” pamphlet that the Republican leadership released was short on figures, spending or revenue details.

Next week’s budget debate will be interesting.  The Democratic Blue Dogs have their own ideas and the Republicans are split.  The look of the final budget may depend on which party can come together sooner.

by

The Military Budget

President Obama said he expected to save money by withdrawing troops from Iraq (which savings will actually show up in the budget now that Iraq and Afganistan spending is no longer “off-line”) and that saving is part of how he proposes to spend on things we all want like health care, education, and energy efficiency.  That is all well and good.  But the elephant in the room (and I don’t just mean Republicans, but also Democrats with their own self-interests) is military spending.

Congressman Barney Frank has an article in the March 2 issue of the Nation in which he talks about military spending.  He begins

I am a great believer in freedom of expression and am proud of those times when I have been one of a few members of Congress to oppose censorship. I still hold close to an absolutist position, but I have been tempted recently to make an exception, not by banning speech but by requiring it. I would be very happy if there was some way to make it a misdemeanor for people to talk about reducing the budget deficit without including a recommendation that we substantially cut military spending.

As Congressman Frank points out there has been a huge increase in the military budget and not all of it attributable to the Wars in Iraq and Afganistan.

It is particularly inexplicable that so many self-styled moderates ignore the extraordinary increase in military spending. After all, George W. Bush himself has acknowledged its importance. As the December 20 Wall Street Journal notes, “The president remains adamant his budget troubles were the result of a ramp-up in defense spending.” Bush then ends this rare burst of intellectual honesty by blaming all this “ramp-up” on the need to fight the war in Iraq.

Current plans call for us not only to spend hundreds of billions more in Iraq but to continue to spend even more over the next few years producing new weapons that might have been useful against the Soviet Union. Many of these weapons are technological marvels, but they have a central flaw: no conceivable enemy. It ought to be a requirement in spending all this money for a weapon that there be some need for it. In some cases we are developing weapons–in part because of nothing more than momentum–that lack not only a current military need but even a plausible use in any foreseeable future.

It is possible to debate how strong America should be militarily in relation to the rest of the world. But that is not a debate that needs to be entered into to reduce the military budget by a large amount. If, beginning one year from now, we were to cut military spending by 25 percent from its projected levels, we would still be immeasurably stronger than any combination of nations with whom we might be engaged.

So are there any signs of hope that we might, despite what will be a conservative outcry about “keeping America strong” and the loss of jobs from miliary spending (can’t many of those folks shift toward developing good things like better batteries for electric/hybrid cars?) and so on?  Christopher Hayes  in a companion piece to Frank’s writes

Indeed, over the past year Defense Secretary Robert Gates has made a series of speeches about shifting resources toward nonmilitary international engagement, as well as reducing spending on outdated weapons systems. “The spigot of defense spending that opened on 9/11 is closing,” he told senators on the Armed Services Committee in January. “The economic crisis and resulting budget pressures,” he said, would provide “one of those rare chances…to critically and ruthlessly separate appetites from real requirements, those things that are desirable in a perfect world from those things that are truly needed in light of the threats America faces and the missions we are likely to undertake in the years ahead.”

Obama expressed similar sentiments on the campaign trail: “I will cut tens of billions of dollars in wasteful spending,” he said in a campaign video. “I will cut investments in unproven missile defense systems. I will not weaponize space. I will slow our development of future combat systems.”

Most recently, Rahm Emanuel hinted on Meet the Press that the administration might have the Pentagon in its sights as part of its promise to trim fat from the budget. “We have about $300 billion in cost overruns,” he said. “That must be addressed, and we will be addressing it.”

We seem to be getting some mixed signals, however.  William Lynn from defense contractor Raytheon who has been described by Hayes (and others) as “never having met a weapons system he didn’t like”  has been appointed deputy defense secretary.  On the other hand,  Obama has just appointed Ashton Carter from the Kennedy School to be Under Secretary of Defense for Acquisition, Technology and Logistics.  As far as I know, Dr. Carter has mostly worked on non proliferation issues and has no ties to any defense contractors.