It is unclear whether New Strategic Arms Reduction Treaty (START) will make it to the Senate floor this year or if there are 67 votes for it if it does. According to the White House and arms control boosters, that uncertainty endangers us all by leaving Russia’s nuclear arsenal unmonitored and undermining our non-proliferation agenda. According to pundits, New START’s failure to pass in the lame-duck would be a grievous political wound for Obama adminstration, which is struggling to buy enough Republican votes for ratification.

In an op-ed out today on the National Interest’s website, Owen Cote and I say this talk is mostly hot air. New START just isn’t that big a deal. We write:

[New START] would provide minor increases in intelligence and Russian goodwill. But passing it means handing taxpayers a substantial new tab on top of what we already pay for our bloated nuclear weapons complex. And rather than reducing the arsenal’s size and cost, the treaty props it up.… The real impact of New START is distraction. By faking a drawdown, the treaty keeps Americans from noticing that deterring our enemies requires nothing like the force structure we plan to retain.

President Obama’s Fiscal Commission has produced a serious and sobering analysis of the government’s budget mess, and it provides some of the needed solutions. Three of the report’s main themes are on target: the need to make government leaner, the need to cut business taxes to generate economic growth, and the need to impose tighter budget rules to discipline spending.

The report rejects the view of many Democratic leaders that the welfare state built over the last 80 years must be defended against any and all budget cuts. “Every aspect of the discretionary budget must be scrutinized, no agency can be off limits, and no program that spends too much or achieves too little can be spared. The federal government can and must adapt to the 21st century by transforming itself into a leaner and more efficient operation.” How lean the government should be, and how many agencies to eliminate, will be the central fiscal debate in coming years. Downsizing government is the order of the day.

The report recognizes the need to spur economic growth, particularly by cutting the corporate tax rate. “The corporate income tax, meanwhile, hurts America’s ability to compete… statutory rates in the U.S. are significantly higher than the average for industrialized countries … and our method of taxing foreign income is outside the norm…. the current system puts U.S. corporations at a competitive disadvantage against their foreign competitors.” The report recommends cutting the 35 percent federal corporate tax rate to 28 percent or less to respond to the Global Tax Revolution and to “make America the best place to start a business and create jobs.”

Finally, the report suggests that Congress impose new procedures to enforce budget restraint. However, the rules suggested by the commission are complex and not tight enough. It would be simpler and more powerful to impose a cap on overall federal spending. For example, a law could require that the government’s overall budget not grow faster than general inflation each year else the president would sequester spending across-the-board. Such a cap would be easy for the public to understand and enforce.

In sum, the report provides a useful menu of reform options that incoming members of a more conservative Congress can pursue next year. We need bigger spending cuts than the commission has laid out—as I’ve outlined in this balanced-budget plan—but the commission deserves credit for spurring a national discussion on how to downsize the federal government.

President Obama’s Fiscal Commission’s report is out and they have wisely kept military spending on the table. Having not seen the accompanying list of specific cuts, it seems that rather than micromanage DoD’s decisions with respect to which weapons systems to cut or keep, the commissioners have laid down a different marker: find the cuts that make sense, but understand that the business-as-usual of the past decade is over.

The report fixes on a number of spending cuts and reforms that Benjamin Friedman and I call for in the Cato Policy Analysis “Budgetary Savings from Military Restraint” including cuts to the civilian workforce (see recommendation 1.10.4). They also hold fast to the proposition that all spending must be on the table, and reject out of hand the notion that military spending must be held sacrosanct. This is bad news for the “defending defense” crowd.

I am not going to comment on the Commission’s other proposals with respect to taxes, social security, health care, etc. As for specific military spending cuts, this report is less detailed than the preliminary report issued a few weeks ago by Co-chairs Bowles and Simpson. It is appropriate, however, to task the Department of Defense with identifying additional savings (as they do in recommendation 1.11). Responsible cuts can be made if the Pentagon and the White House adopt a strategy of restraint, one that husbands American resources, focuses on a few core missions vital to U.S. national security, and requires other countries to take primary responsibility for their defense.

The Chairmen of President Obama’s Fiscal Commission have a new draft proposal that is filled, according to Reuters, with “sharp spending and benefit cuts.”

That’s music to my ears, so I quickly flipped to the back of the report in hopes of finding hard numbers showing that the federal government will be smaller in future years.

Much to my chagrin, it turns out that the federal government will increase by about $1.5 trillion between 2010 and 2020 according to the Commission’s numbers. Here’s a chart based on the data from page 57.

As I explain in the video below, this disconnect between supposed spending cuts and actual spending increases is the result of politicians creating a system where a spending increase can be called a “spending cut” if outlays don’t climb as fast as previously planned. This “baseline” or “current services” budgeting is a great gimmick for the politicians since they can simultaneously give more money to special interest groups while also telling voters that they are cutting the budget.

This does not mean that the folks at the Fiscal Commission are being deliberately dishonest. This process has been in use for decades and many budget wonks routinely rely on this common practice without giving any thought to whether it misleads voters.

And there are good reasons to collect “current services” data. Those numbers tell lawmakers how much spending has to increase if they, for instance, leave entitlement programs on autopilot (i.e., more senior citizens automatically leading to more Social Security spending).

Nonetheless, the debate about federal budget policy should be honest. If the Fiscal Commission thinks spending should increase at about twice the rate of inflation, and they want higher taxes to finance that spending growth, they should openly argue for that position. And if the hard left wants spending to increase three times faster than inflation, as it has during the era of Bush-Obama profligacy, they should openly make the case for why America should be more like France.

The howls of outrage that have greeted the report of the bipartisan National Commission on Fiscal Responsibility and Reform shows two things: 1) most Democrats have no interest in reducing the size and cost of government; and 2) few Republicans are actually serious about it.

From the initial reaction, one would think that the Commission has slashed government to the bone, throwing the elderly, poor and sick into the street. In reality, the Commission report is far from a radical document. It proposes a reduction in government spending from 24.3 percent of GDP today to 21.8 percent over the next 15 years. That’s a start. But as recently as 2000 total federal spending was just 18.4 percent of GDP — and people were hardly dying in the streets during the Clinton years. 

In fact, the Commission doesn’t actually “cut” federal spending. Under the Commission’s proposal, it would rise from roughly $3.5 trillion today to more than $5 trillion by 2020. So, under the terrible “cuts” that the Commission is recommending, federal spending would still increase faster than inflation. This is the old Washington game of calling a slower increase than previously projected a “cut.”

But Democrats appear unwilling to support even this modest slowing in the growth of government. Instead they call for simply raising taxes to support a virtually unlimited amount of federal spending. Republicans, meanwhile, talk about reducing government, but fall back on bromides about reducing waste, fraud, and abuse when faced with the need to make specific cuts.

If we were serious about reducing the size, cost and intrusiveness of government, we should roll back spending to Clinton-era levels. (My colleague Chris Edwards has shown how that can be done.) That would eliminate the need for the tax increases that the commission proposes. 

Alas, we still await political leadership with that amount of courage.

We are told constantly that government can play a beneficial role in the marketplace by taking steps to make sure consumers are more fully informed about the risks of the goods and services they use. But what happens when the government itself helps spread health and safety information that is false or misleading? That question came up recently in the controversy over New York City’s misleading nutrition-scare ad campaign, and it now comes up again in a controversy over a new database of complaints about consumer products sponsored by the federal Consumer Product Safety Commission (CPSC).

As part of the Consumer Product Safety Improvement Act of 2008 (CPSIA), Congress mandated that the CPSC create a “publicly available consumer product safety information database” compiling consumer complaints about the safety of products. Last week, by a 3–2 majority, the commission voted to adopt regulations that have dismayed many in the business community by ensuring that the database will needlessly include a wide range of secondhand, false, unfounded or tactical reports. The Washington Times editorializes:

…[Under the regulations as adopted last week] anybody who wants to trash a product, for whatever reason, can do so. The commission can leave a complaint on the database indefinitely without investigating its merits “even if a manufacturer has already provided evidence the claim is inaccurate,” as noted by Carter Wood of the National Association of Manufacturers’ “Shopfloor” blog.…

Trial lawyers pushing class-action suits could gin up hundreds of anonymous complaints, then point the jurors to those complaints at the “official” CPSC website as [support for] their theories that a product in question caused vast harm. “The agency does not appear to be concerned about fairness and does not care that unfounded complaints could damage the reputation of a company,” said [Commissioner Nancy] Nord.

Commissioners Nord and Anne Northup introduced an alternative proposal (PDF) aimed at making the contents of the database more reliable and accurate but were outvoted by the Democratic commission majority led by Chairman Inez Tenenbaum. Nord: “under the majority’s approach, the database will not differentiate between complaints entered by lawyers, competitors, labor unions and advocacy groups who may have their own reasons to ‘salt’ the database, from those of actual consumers with firsthand experience with a product.” Commissioner Northup has published posts criticizing the regulations for their definitions of who can submit a report, who counts as a consumer, and who counts as a public safety entity.

For those interested in reading further, Rick Woldenberg, a leading private critic of the law who blogs at AmendTheCP​SIA​.com, has critically commented on the politics of the proposal here, here, here, here, and here. More coverage: ShopFloor with followups here and here, New York Times, Sean Wajert/​Mass Tort Defense. I’ve been blogging for the past two years at my website Overlawyered about the wider problems with the CPSIA law, including its effects on books published before 1985, thrift stores, natural wooden toys, ballpoint pens, bicycles, plush animals, Irish dance costumes, rocks used in science class and many more. Most of these problems remain unresolved thanks to the inflexible wording of the law as well as, sometimes, the unsympathetic attitude of the commission majority. I’ve heard that bringing overdue investigative oversight to the ongoing CPSIA disaster is shaping up as a priority for many incoming lawmakers on the (newly Republican-led) House Energy and Commerce Committee, whose outgoing chair, California Democrat Henry Waxman, is closely identified with the law and its consumer-group backers.

An indicator of the incoming House Republican majority’s seriousness about cutting spending will be which members the party selects to head the various committees.

Many of the members in line to chair committees leave a lot to be desired from a limited government perspective (see here and here). In particular, the top candidates in line to chair the critical House Appropriations Committee, Reps. Jerry Lewis (R‑Calif.) and Hal Rogers (R‑Ky.), are about as inspiring as re-heated meatloaf when it comes to their potential for pushing serious spending reforms.

According to the Wall Street Journal, appropriator Jack Kingston (R‑Ga.), is eyeing the chairman’s gavel even though he’s only fifth in line in terms of seniority. Kingston has put together a spending restraint plan in PowerPoint for consideration by the 26 member Republican Steering Committee, which will decide on committee chairs.

Although the Journal notes that Kingston is “no spending virgin,” there is a lot to like about his plan, which is promisingly entitled “Changing the Culture: A New Vision for the House Appropriations Committee.”

Here are my thoughts on the plan’s contents:

• One slide shows a list of “Big Stuff” and places at the top “State Addiction to the Federal Government.” The language is perfect and indicates that Kingston recognizes that federal aid to the states is a significant issue that needs to be addressed. Reinstituting “fiscal federalism” is one of the chief principles of reform addressed on the Downsizing Government website.

• The same slide acknowledges the trillion dollar cost of the wars in Afghanistan and Iraq. This inclusion perhaps signals that Kingston is prepared to get serious about reining in defense spending, unlike many Republicans.

• Kingston proposes new spending caps that would work to eventually reduce total federal spending to 18 percent of GDP. He notes that “This approach would require Congress to focus on the actual problem of spending, as opposed to deficits, which are a symptom.” Only interest on the debt would be off limits from sequestration should Congress fail to adhere to the spending caps.

• Kingston calls federal grants “the new earmarks” and singles out the $7.2 billion broadband grant program for criticism, noting that it “pay[s] companies to do what they would do on their own.” As I recently explained, eliminating earmarks but keeping the federal grant programs that fund the same activities would amount to a Pyrrhic victory.

• Kingston calls for more “budget hawks” on the appropriations committee, and singles out spending reformer Rep. Jeff Flake (R‑Ariz.) for inclusion on the committee. He also calls for getting “members off subcommittees in which they are unable to take hard votes.” Amen. If Republicans want to cut spending, then they need to put members on the committees who will actually vote to do it.

The Journal explains that the GOP leadership, in particular incoming House Speaker John Boehner, had better take Kingston’s candidacy seriously:

Officially, committee chairs are selected by the 26 or so person GOP Steering Committee, but Mr. Boehner has five votes on the panel and he can block anyone from getting the nod. A Steering Committee decision can be overturned by a vote of the full GOP House conference, and the leadership should worry that selecting someone like Mr. Rogers could lead to a rank-and-file revolt.

Republicans claim to be the party of fiscal probity and that they’ve learned from their demise in 2006. Mr. Kingston’s proposals are the kind of creative thinking that Republicans are going to need to carry out the principles and agenda they say they believe in.

When tea party voters helped give the Republicans a second chance at reining in government spending, they didn’t have in mind re-heated meatloaf – they want steak. Boehner and the House GOP leadership would be wise to oblige, or else these voters might dine elsewhere in 2012.