Federal Politicians: Your Spending Is Not as Important as Our Spending

Federal Politicians: Your Spending Is Not as Important as Our Spending
February 28, 2013

Steve Stanek

Steve Stanek (sstanek@heartland.org) is a research fellow at The Heartland Institute and managing... (read full bio)

President Barack Obama and federal lawmakers this year have forced virtually all working Americans to endure a 47 percent increase in the payroll tax they pay, yet many of these same politicians expect us to believe they cannot find good ways to cut federal spending 2 percent.

Fewer FBI agents! Slower airport security! Less national defense! Teacher layoffs! More illegal immigrants sneaking across the borders! A damaged economy! All because of a cut of $85 billion out of $3.6 trillion in annual spending if the “sequester” takes effect at the end of this week.

On Monday Obama addressed the National Association of Governors and asked them to lobby members of Congress to reach a budget deal to avoid the sequester cuts. He told the governors the sequester would “allow a series of arbitrary automatic budget cuts to kick in that will slow our economy, eliminate good jobs, and leave a lot of folks who are already pretty thinly stretched scrambling to figure out what to do.”

This is ironic on multiple levels. First, the sequester was team Obama’s idea, a fact Bob Woodward has reported and which the Obama administration only recently has acknowledged. Second, Obama apparently had no worries about “a lot of folks who are already pretty thinly stretched” when he and members of Congress allowed the payroll tax rate to climb from 4.2 to 6.2 percent, a 47 percent increase.

Meanwhile, Republican House Speaker John Boehner of Ohio has derisively referred to “the president’s sequester” while agreeing with Obama regarding its “harmful cuts.” Republican leaders apparently are no more eager for fiscal restraint than the Democrats’ leaders.

There is no reason trimming federal spending $85 billion—approximately 2 percent—has to cause any harm. The Government Accountability Office in 2011 announced the federal government had made $125 billion in “improper payments” in 2010, including overpayments, underpayments, payments without proper documentation, and fraudulent payments. In other words, every penny of the threatened $85 billion in sequester cuts could be made up by improved accounts payable procedures.

Then there is this: Federal spending has climbed from $1.8 trillion in 2001 to $3.6 trillion now, an average annual rate of increase of approximately 6 percent. This spending growth far exceeds price inflation, wage inflation, personal income growth, economic growth, population growth, or virtually any other measure to explain such a spending surge.

Our president and political leaders want us to believe they can’t find ways to cut spending 2 percent without causing serious harm after doubling federal spending in just 12 years—and after knowing the federal government erroneously paid $125 billion in 2010 alone. That’s $40 billion more than the sequester cuts.

These politicians knew every household that earns a paycheck would have less take-home pay because of the higher payroll tax they imposed. They expect us to adjust our spending to deal with our financial realities. We should expect them to do the same.

Steve Stanek

Steve Stanek (sstanek@heartland.org) is a research fellow at The Heartland Institute and managing... (read full bio)