Real Spending Cuts Will Be Hard

So, the new guys are gonna cut spending and reduce the deficit. These are the Tea Partiers and other conservative Republicans like Alan Nunnelee and Steven Palazzo who effected the GOP takeover of the U.S. House of Representatives.

Hmmm. I wonder if they mean real cuts or “beltway” cuts?

You see, inside the Washington, D.C., beltway, “cuts” refer to reductions in projections of future spending and estimates of deficits, not the real, right-now stuff. This allows politicians to take credit for cuts while spending actually increases, and deficit reduction while deficits actually increase. If the new guys don’t adopt beltway speak, things will get interesting fast.

Of course, cutting the right-now stuff is hard. Take it from one who tried to close universities, major program cuts are nigh impossible to implement. This is particularly true at the federal level. Case in point, why did Congress create the infamous Base Realignment and Closure Commissions? Congress could not agree on which bases to close to reduce military infrastructure costs.

That’s because every program has constituents. Constituents don’t care what you cut as long as you don’t cut their stuff. When you try to, they squeal. And, in the world of politics, squealers always seem to get places at the congressional trough.

Our big spending problems come from Social Security, Medicare and Medicaid, and the wars in Iraq and Afghanistan (stimulus funding has ended). Right-now cuts in those programs will not come easy, if at all.

That leaves everything else, but everything else constitutes a small percentage of overall spending. To have impact, then, many programs will need to be severely cut or eliminated. But, uh, exactly which ones?

Farm subsidies? Defense spending? Pell Grants and research grants for universities? Welfare and unemployment benefits? Community Development Block Grants, Appalachian Regional Commission and Delta Regional Authority grants? We depend on all those in Mississippi. Foreign aid? Well, most Mississippians would cut that. Border security? Don’t we need to spend more there? And, so on.

Then there is that favorite, but least financially significant, target for cuts – earmarks. Senator Thad Cochran delivers hundreds of earmarks each year. Lots of folks and organizations like those.

My prediction is right-now cutting will be more show than substance. Small across-the-board cuts will be made to look big. Congress has enacted such “haircuts” in the past.

What could happen, but has little immediate impact, is to take immediate steps to slow the growth in spending. And, like Ronald Reagan, they could help close loopholes to improve the revenue side of the deficit equation.

Such steps will require compromise, however. And hopes for compromise will likely disappear if the battle over the Bush tax cuts goes “nucular.”

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