LAST WEEK, on the terrace of the Cannon House Office Building on Capitol Hill, a crowd of demonstrators from around the country held aloft catchy signs saying things like "Rescue Taxpayers from Floods of Red Ink" and "Deficit Spending is Disaster Pending." Members of the conservative Republican Study Committee, meanwhile, unveiled their assault on the spend-what-you-will attitude plaguing Congress.
The effort, titled "Operation Offset," was initiated by Indiana Republican Mike Pence, chairman of the group, with a twofold goal in mind: Find a way to fund Katrina recovery efforts, and find a way to get federal spending under control.
With damages from Hurricane Katrina estimated to exceed $200 billion (who knows what Hurricane Rita will add), and recognizing the pitfalls of raising taxes to cover the federal portion of this tab, members of the RSC have their work cut out for them. Though most conservatives are united in lambasting spending-gone-wild, they still debate what should be cut and for how long.
For example, Rep. Ron Lewis of Kentucky urged a moratorium on all nondefense earmarks for congressional districts--but only for a year. Lewis believes that these are the worst of times, requiring every constituency to sacrifice some cherished Paper Industry Hall of Fame or long-sought curriculum for the study of mariachi music (those are real examples). At the same time, he says, "there are certain projects that absolutely members need to work on behalf of their constituency."
Not Pence. He would be happy if the cuts lasted a little longer--say, forever. "It's almost like when a person is diagnosed with a very serious disease [such as] heart disease," Pence offers. "And the doctor says, 'Well, it would greatly help if you lost weight.' That event, that bad news, becomes the catalyst for the person to make hard choices that they had needed to make for a long time."
The Republican Study Committee's report, "RSC Budget Options 2005," proposes spending reductions under several headings. By far the largest savings to be had come under "Tough Options." Of these, the most controversial would delay for at least one year the Medicare prescription drug program, and repeal the highway earmarks dear to the hearts of legislators. The "Tough Options" could save $70 billion in 2006 alone. In total, the RSC report identifies potential savings of more than $1.2 trillion over 10 years.
Some of the savings would come from a laundry list of line items to be eliminated: subsidized loans to graduate students; the Corporation for Public Broadcasting's public funding, which accounts for 15 percent of its budget; "Parents: the Anti-Drug" ads; Medicare reimbursement for penile implants; and so on.
Other proposals would eliminate duplication. The president's Millennium Challenge Accounts, for example, designed to give foreign-aid recipients incentives to become fiscally responsible, apparently were a supplement to, not a replacement for, USAID programs that poured money into African corruption; the RSC wants the Millennium Challenge Accounts eliminated, to save $24.4 billion over a decade.
And the RSC calls for increased accountability: One member, from Maryland, wants to cut funding to any U.N. member nation that votes against U.S. interests more than 50 percent of the time.
Even if some of these programs are slashed--and Pence notes that not every member of the committee agrees with every proposal--how wisely will the folks who initiated all of this waste in the first place spend the money now being directed to the Gulf coast?
One goal the White House and many Republicans want to incorporate into Katrina relief is encouragement of an "ownership society." To take just one small piece of the proposed Katrina effort, consider job training. The Department of Labor has already issued $12 million in grants for job training to residents of the states hit by Katrina. These take the form of "worker recovery accounts," also called "personal reemployment accounts" or "innovation training accounts," which are part of President Bush's 2003 High Growth Job Training Initiative. In the wake of Katrina, President Bush proposes to raise the amount of each award from $3,000 to $5,000.
How well do federal job training initiatives perform? They've been around for more than half a century, some recent permutations being CETA, JTPA, and WIA. No one knows for sure just what they have accomplished. While the Brookings Institution praises job training as one of "government's 50 greatest endeavors," the Heritage Foundation's David B. Muhlhausen says job training, even in its new, more flexible variants, is not "likely to raise the income of participants."
As currently structured, the program is supposed to work like this: The "dislocated worker" goes to a One-Stop Career Center, where he can take a skills assessment test and consult a job openings database. If this fails to lead him to a job, the seeker enters the "intensive" phase. He is given a more comprehensive skills assessment, in addition to training in interviewing skills and "punctuality." If, after this, he still lacks a job, the dislocated worker is offered his individual account, from which to purchase job training of his choice, child care, transportation, or "other supportive services" during the course of a year.
The Department of Labor is required to evaluate this program. Among other things, it tries to measure employer satisfaction with trainees. According to Muhlhausen, however, the department's studies have no control groups, necessary to shed light on whether trainees would have found jobs anyway. Though the department reports that trainees' earnings increase, Muhlhausen suggests that those who receive no training may also see their incomes rise, as a result of improved efficiency and skills thanks to actual work experience, rather than training in a classroom.
On the upside, job training accounts now come with an incentive to find work and stay off unemployment: Recipients can keep any unused funds in their account if they are hired within 13 weeks of receiving unemployment insurance and retain their job for at least six months.
Members of Congress involved in the effort to reduce spending and to see that the money saved is intelligently spent in the hurricane-affected states don't have the luxury of endless, unhurried study. They have to make decisions now, on the basis of imperfect knowledge. One suggestion, though, seems sure-fire.
Given the difficulty individual members have in restraining their desire for funds to finance projects in their districts, constitutional scholar Matthew Spalding, also at Heritage, urges the creation of an independent entity like the Base Realignment and Closure commission that would select which earmarks to cut, taking the burden off individual members. It could be called the Earmark Reduction to Offset Spending commission, or EROS. Its motto could be "A Passion for Thrift," in deference to those sign-bearers at last week's protest. Time will tell if it's a passion members of Congress share.
Joseph Lindsley is an editorial assistant at THE WEEKLY STANDARD.
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