The DA John McCain Economic Doozy of the Day Posted by Michael Cohen

I had a chance to read over John McCain's speech today on the economy and this one line really jumped out at me:

As president, I will also order a prompt and thorough review of the budgets of every federal program, department, and agency. While that top to bottom review is underway, we will institute a one-year pause in discretionary spending increases with the necessary exemption of military spending and veterans benefits.

If there was an award for meaningless policy initiatives - this one would certainly receive the gold medal. As the Center for Budget and Policy Priorities helpfully reminds us in the chart below the fold discretionary spending is a tiny part of the federal budget - approximately 18% and that includes the veterans benefits that McCain declared exempt from his one-year pause. Indeed the biggest "discretionary" chunk of the federal budget is the rising defense budget, which is now approaching levels not seen since World War II. If John McCain is really serious about instituting fiscal sanity in Washington getting defense spending under control would be a pretty good place to start, which makes the next line of his speech that much more astounding:

"Discretionary spending" is a term people throw around a lot in Washington, while actual discretion is seldom exercised. Instead, every program comes with a built-in assumption that it should go on forever, and its budget increase forever. My administration will change that way of thinking.

Well actually no they won't.

Now some of you may be wondering about Social Security and Medicare, which make up nearly half the budget - does John McCain have a plan for dealing with them? Well yes he does, sort of:

For years, Congress has been buying time, and leaving the great challenge of entitlement reform for others to deal with. And now the two contenders in the other party have even proposed enormous new federal commitments before the old commitments have been kept -- trusting that others, somewhere down the road, will handle the financing and make all the numbers come out right.

But there will come a day when the road dead-ends, and the old excuses seem even more hollow. And it won't be the politicians who bear the consequences. It will be American workers and their children who are left with worthless promises and trillion-dollar debts. We cannot let that happen. And you have my pledge: as president I will work with every member of Congress -- Republican, Democrat, and Independent -- who shares my commitment to reforming and protecting Medicare and Social Security

And . . . if you're waiting for more here, sorry that's it. And if you go to the issues section of McCain's website to find out what his position is on reforming and protecting Medicare and Social Security there is nothing. Indeed, McCain has an entire section on the "Second Amendment" and the "Space program" but nothing on his plan for dealing with entitlement programs that make up 42% of the federal budget.

A couple of months ago, McCain had the temerity to call Barack Obama's campaign "platitudinous." Mr. McCain . . . meet the kettle.

Comments

[smaug]

You lost me. If defense makes up 22% v. 18% for domestic discretionary, why would capping defense be anything but slightly more significant that the "meaningless" non-defense cap.

Defense discretionary spending is still below its percentage levels of total outlays from FY1993 on back to FY1962 at least. By FY2002 domestic discretionary was at its highest percentage since FY1982. So if you're looking to cut, it is a fair target. Not that it should be given the infrastructural and other domestic needs the US has. Indeed, I'll wager that many people will be angered by McCain's cap; it's hardly meaningless as a policy initiative.

Sure defense is at its highest since WWII. But the FY2003 budget broke that mark, supplanting the FY1985 budget (in terms of FY2009 dollars). And here we are talking budget authority, not outlays. In outlays, the post-WWII high was FY1989 until FY2004 onward. As a percentage of GDP and federal spending (as mentioned above) the US is still below Cold War levels.

[Michael Cohen]

Its meaningless if McCain is really serious about curbing government spending. He's focusing on the smallest part of the budget while ignoring the parts that are growing the fastest, defense and entitlements.

There is plenty of waste in the defense budget and if McCain was serious about attacking government spending he would be looking for savings there as well. But by only focusing on 18% of the budget, where the opportunity for cost savings are so limited, he is narrowing his scope and to my mind offering a proposal that has little chance of putting any serious dent in the deficit - not to mention the fact that he continues to support extending the Bush tax cuts.

[Michael Cohen]

Its meaningless if McCain is really serious about curbing government spending. He's focusing on the smallest part of the budget while ignoring the parts that are growing the fastest, defense and entitlements.

There is plenty of waste in the defense budget and if McCain was serious about attacking government spending he would be looking for savings there as well. But by only focusing on 18% of the budget, where the opportunity for cost savings are so limited, he is narrowing his scope and to my mind offering a proposal that has little chance of putting any serious dent in the deficit - not to mention the fact that he continues to support extending the Bush tax cuts.

[smaug]

"Waste" is politico-speak for "programs I don't like." Entitlement spending cannot be changed without significant legislative overhaul, and cutting social, health, and retirement programs is hardly popular.