Rand Paul proposes Pentagon spending boost

In a marked reversal of previous positions, Senator Rand Paul is proposing a Defense spending hike of around 16%.

Via Time:

the libertarian Senator introduced a budget amendment late Wednesday calling for a nearly $190 billion infusion to the defense budget over the next two years . . .

Paul’s amendment brings him in line with his likely presidential primary rivals, including Florida Sen. Marco Rubio, who introduced a measure calling for nearly the same level of increases just days ago. The amendment was first noticed by TIME and later confirmed by Paul’s office.

The move completes a stunning reversal for Paul, who in May 2011, after just five months in office, released his own budget that would have eliminated four agencies—Commerce, Housing and Urban Development, Energy and Education—while slashing the Pentagon, a sacred cow for many Republicans. Under Paul’s original proposal, defense spending would have dropped from $553 billion in the 2011 fiscal year to $542 billion in 2016. War funding would have plummeted from $159 billion to zero. He called it the “draw-down and restructuring of the Department of Defense.”

But under Paul’s new plan, the Pentagon will see its budget authority swell by $76.5 billion to $696,776,000,000 in fiscal year 2016.

It’s worth noting that Senator Paul proposes offsetting cuts to make up for the increased Pentagon spending, but those cuts are likely all but impossible in the current political climate.

Unpaid-for Pentagon spending hikes, on the other hand, are all too probable.




House faces off over Pentagon spending

In a rarely-used procedure, members of the House GOP are preparing to face off directly over funding for the nation’s largest chunk of discretionary spending.

The move is called called “Queen of the Hill,” and it’s hardly ever used on Capitol Hill. Speaker John Boehner (R-Ohio), House Majority Leader Kevin McCarthy (R-Calif.) and Majority Whip Steve Scalise (R-La.) will allow one vote on Rep. Tom Price’s (R-Ga.) Budget Committee’s spending plan, which infuriated defense-minded lawmakers who thought it underfunded the Pentagon.

They’ll also allow a vote on a nearly identical budget, which includes language to increase defense spending. Whichever plan gets the most votes will become the House GOP’s budget.

Recall that the original budget hardly “cut” Pentagon spending meaningfully — instead, it relied upon a nearly $95 billion slush fund to keep the budget caps, technically. The fact that a large contingency of the House (in both parties) want to hike spending even more is disappointing to say the least.

CRS signs letter urging waste reduction in timber Program

We were proud to sign onto a letter today urging Chairman Calvert to include language in the FY16 Interior Appropriations Bill to reduce waste in the Tongass Timber Program.

Read the final text here.

First Take on the House Budget

In case you missed it, this morning, the House Budget Committee released its FY2016 Budget Resolution, A Balanced Budget for a Stronger America.

We’re still preparing a more in-depth analysis for you, but in the meantime, here are some key points to take away.

1. It’s better than the President’s budget… by a lot
This point should be obvious. We know that Obama’s budget plan is terrible: it spends $50 trillion over ten years and never balances, relying on questionable economic assumptions to assume economic growth and avoid a fiscal crisis.

Somewhat similar to Obama’s budget, the House plan would bring spending down relative to GDP; in this case, to 18.2 percent of GDP in 2024 and 18.3 percent in 2025. But in a marked difference, this budget aims to balance within ten years, making $5.5 trillion in spending reductions. Debt held by the public will decline from more than 74 percent of GDP today to 55 percent of GDP in 2025 to just 18 percent of GDP by 2040, under the plan.

2. Cuts aren’t drastic, but they’re meaningful
These cuts are not the slash-and-burn many fiscal conservatives rightfully want. Instead, they’re gradual and take the form of reductions in increases. To quote the plan itself [emphasis added]:

Under current policy, the Federal Government will spend $48.6 trillion over the next 10 years. Under this proposal, it will spend roughly $43.2 trillion. This budget does not make sudden cuts. Instead, it increases spending at a more manageable rate. On the current path, spending will rise by an annual average of 5.1 percent. Under this budget, it will rise by only 3.3 percent.

3. The resolution includes key entitlement reforms
In parts, the document reads like a Christmas list for entitlement reform advocates. It tackles everything from “ending Obamacare’s raid on the Medicare trust fund” to seeking a “premium support model” which would “enable beneficiaries to choose from a range of coverage options, including traditional fee-for- service Medicare,” beginning in 2024. It also seeks means testing, in which Medicare payments are adjusted based on income and illness, and wealthier seniors pay more out of pocket.

It combines Medicare A and B and establishes a single deductible along with ending the can-kicking and expensiveDoc Fix,” instead “responsibly [accounting] for a repeal of the sustainable growth rate (SGR) formula so that we ensure physician access and improve the quality of care for patients.”

It also combines CHIP and Medicaid and seeks to devolve power to the states. It seeks to prohibit the Social Security trust fund from being “raided” for other programs and creates a bipartisan commission to find and recommend Social Security savings.

4. The resolution tackles government gone wild
Entitlement reform portions will probably take up most attention, but we shouldn’t forget other measures in the budget. For one, it takes on Dodd-Frank and its bailout provisions, and seeks to privatize Fannie Mae and Freddie Mac. It also attacks “corporate welfare” such as the Hollings Manufacturing Extension Program, which subsidizes a network of nonprofit extension centers, and it entirely eliminates “Trade Promotion Activities” at the International Trade Administration.

It calls for reforming duplication in job training and assistance programs, among others, such as the 92 separate anti-poverty programs or 17 different food aid programs. It also rescinds the administration’s ability to waive work requirements for Temporary Assistance for Needy Families (TANF).

Finally, it calls for reforming the budget process itself, along with seeking greater transparency. It supports a Department of Defense audit by 2017.

5. There are some areas of disappointment and skepticism
While the budget is overall very promising, there are some areas of concern. For one, it’s worth noting that a major aspect is assuming a full repeal of Obamacare, which is a crucial but ultimately very difficult goal, even with a Republican Congress. Full savings from some entitlement reforms occur over a long time, although as others have noted, a longer time horizon makes sense for these types of reforms.

But mostly, fiscal conservatives should be concerned with Pentagon spending. Facing an incredibly tough climate in which many Republicans demanded blowing past Pentagon spending caps altogether, Rep. Price and others should be applauded for holding the line and keeping spending under the Budget Control Act limits… technically.

See, the budget hikes Pentagon spending using the Overseas Contingency Operations (OCO) budget as a slush fund, pushing the total up to almost $95 billion, albeit with some offsets. While the political climate, perhaps, could not have produced anything better, it’s hard to applaud a nearly $100 billion slush fund.

Overall, it’s perhaps fair to say this resolution is very good, could have been better, but probably not in any real-world scenario. We continue to push for much-needed oversight and reform of the OCO budget and remind conservatives that keeping America safe requires controlling spending, especially in a dangerous world.

No one seems to know how many contractors work for the government

Taking on bloated government requires, well, knowing just how bloated it is. And as it turns out, that answer might be more elusive that you’d think.

How large is the U.S. government’s contract workforce? The answer could help gauge how much federal agencies are outsourcing work to the private sector.

But no one has managed to nail down a definitive number to date. That includes the nonpartisan Congressional Budget Office, which took a crack at it after the top Democrat on the House Budget Committee requested an analysis.

“Regrettably, CBO is unaware of any comprehensive information about the size of the federal government’s contracted workforce,” the CBO said in a letter to Rep. Chris Van Hollen (D-Md.) on Wednesday.

While we might not know how many workers there are, we know how much they’re costing us. Washington Post‘s Josh Hicks points out [emphasis added]:

The CBO said government agencies spent more than $500 billion on outside products and services in 2012, based on the federal contracting database. The number represents a rapid increase over the past dozen years, with the costs growing more rapidly than inflation.

Federal spending on contracts grew by 87 percent between 2000 to 2012, an average of about 5 percent per year. By comparison, inflation averaged less than 3 percent each year during that span.

Contracting also grew as a percentage of total federal spending during that time. It accounted for 11 percent in 2000 and 15 percent in 2012, the CBO said.

This is unacceptable. No company or organization would accept such shady accounting practices. And the need for transparency is perhaps even clearer here since, after all, it’s our money to begin with.

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