WASHINGTON — The question of how to curb long-term federal spending continues to loom over Congress.
While a congressional committee tasked with outlining at least $1.2 trillion in savings couldn’t get the job done, U.S. Senate candidates from Hawaii have some ideas about what would work.
Former Congressman Ed Case, a Democrat who will face Hirono in an Aug. 11 primary, was the most direct in his criticism of the congresswoman’s approach. (Read a related article about Hirono’s strategy.)
“Rep. Hirono’s plan demonstrates at best ignorance of the extent and complexity of our budget crisis and at worst the same political dishonesty that got us into this puka,” Case told Civil Beat. “Rep. Hirono’s (10-year) plan rests almost exclusively on winding down Iraq and Afghanistan, expiring the Bush upper-income tax cuts … and ‘cutting Medicare waste.’ Her Iraq/Afghanistan savings assume a close-to-complete and immediate withdrawal, which is neither realistic nor our current national policy.”
The Hirono campaign characterized Case’s remarks as part of a “long history of attacking other Democrats,” then criticized Case for “the situation he himself helped to create.”
“It’s difficult for the people of Hawaii to accept lectures about the budget deficit from the same Ed Case who offered George W. Bush his full support for going to war in Iraq, and voted with Republicans to enact tax cuts for the wealthiest,” said Jadine Nielsen, Hirono’s campaign finance chair.
Case argues that Hirono overstates actual savings by “at least $500 billion.” The former congressman also criticized Hirono for “playing the old D.C. shifting-baseline game to avoid the tough decisions.”
The baseline Case refers to is the budgetary starting point for crafting a long-term spending plan. The Congressional Budget Office’s baseline, for example, says that the U.S. faces $3.5 trillion in deficits over the next 10 years. The standard CBO baseline is considered somewhat unrealistic because it assumes cutting Medicare payments to doctors by 30 percent and eliminating the Bush era tax cuts — and neither are expected to happen.
“Rep. Hirono is on record as supporting the continuation of the Bush tax cuts for all other income levels and the (alternative minimum tax) fix and other tax provisions, and opposing the physician Medicare payment reductions,” Case said. “CBO estimates the cost of those items to be at least $5 trillion over its baseline over 10 years. So her overall plan does not result in net savings and in fact worsens the budget deficit by trillions.”
But Case and Hirono appear to agree on a general strategy of cutting spending, raising revenues and encouraging economic growth.
“The way out must be both robust economic growth and far more extensive and tough budget decisions,” Case said. “I generally support both the goals and approach followed by both Simpson-Bowles and the Gang of Six. Like them (and President Obama), I believe we must be far more aggressive and ambitious in solving our longterm fiscal crisis than just ‘finding’ $1.2 trillion in savings now and calling it a day.”
Simpson-Bowles is the common reference to the National Commission on Fiscal Responsibility and Reform, created by President Obama in 2010 and chaired by former GOP Sen. Alan Simpson and Erskine Bowles, a prominent Democrat. The Gang of Six is a bipartisan group of six Senators, three Republicans and three Democrats, who have been influential in public policy debates.
Some of the steps Case said he would support to curb federal spending and long-term debt:
• Letting the upper-income Bush-era tax cuts expire
• Comprehensive tax reform
• Cutting discretionary defense spending on projects like “unproven new weapons systems”
• Cutting non-defense discretionary spending (that typically means cuts to areas like like education, social services and transportation)
Former Hawaii Gov. Linda Lingle, a Republican, also said she agreed with “many of the proposals” drafted by Simpson-Bowles and other bipartisan groups like the Bipartisan Policy Center’s Debt Reduction Task Force and the President’s Council on Jobs and Competitiveness.
Lingle said that the so-called super committee’s failure wasn’t due to a lack of “ideas and solutions,” but due to a “lack of leadership and willingness to work on a bipartisan basis.” The former governor slammed Congress for turning to the super committee in the first place.
“Given the importance of reducing what is now a $15 trillion cumulative debt, all of our elected representatives needed to directly address and tackle the solutions,” Lingle told Civil Beat. “The failure of what was a subcommittee should be no cover or excuse for the failure of our elected leaders to act prudently in the best interest of the people they serve.”
Without naming Hirono, Lingle — like Case — chided those who have pointed to a possible $1.4 trillion in savings from ending the wars in Iraq and Afghanistan.
“That sounds good, but the reality is the expected savings from troop withdrawals from Afghanistan and Iraq — $1.09 trillion by the White House’s own estimate — was already taken out of the President’s budget that was submitted to Congress,” Lingle said. “You cannot cut something that is not in the budget to begin with and then claim a savings.”
While Lingle emphasized that the “devil is in the details,” she offered only general guiding principles on how she would approach reducing the federal deficit:
• Making spending cuts, increasing revenue and focusing on the factors that grow the economy
• Eliminate as much waste, fraud and abuse as possible, while also realizing that such efforts will not “significantly reduce the debt”
• Preserve and make good on promises made to retirees and senior citizens who have worked their entire lives with the expectation that these benefits, including Medicare, Medicaid and Social Security, will be there for them.
• Raise revenues for government through tax reform that yields “lower rates for all” and creates a broader and more efficient system. “We cannot solve the deficit and debt problem simply by raising taxes on wealthy Americans,” Lingle said.
John Carroll, another Republican in the Senate race, also rebuked the idea of “raising taxes on the rich.”
“With waste, fraud and mismanagement rampant, it is absurd to suggest that we raise taxes to solve the budget deficit,” Carroll told Civil Beat. “That’s not fixing the problem.”
Carroll said that the bottom line is that Congress must spend “a lot less.”
“I would aggressively seek out real savings by drying up boondoggle projects and other blatant mismanagement,” Carroll said. “I would suggest a simplification of the tax code, disbanding the IRS and institution of a flat tax. I would stop the massive pay-outs to ‘allies’ that never deliver, and international police actions that sap our military and financial resources.”
Some of the areas where Carroll sees the opportunity to cut the “low-hanging billions:”
• Immigration reform to cut the government cost of keeping illegal immigrants in the United States1
• Ending the war in Afghanistan
• Eliminating farm subsidies like the federal Conservation Reserve program
• Getting rid of unused or vacant federal properties
• Stopping hundreds of billions of dollars in Pentagon weapons systems cost overruns
• Fighting health care fraud, which costs taxpayers as much as $60 billion annually, according to a 2008 Washington Post article
Carroll provided additional examples outlining billions of dollars in fraud and improper payments from 2008 and 2006 news clippings.