Free Markets, Free People
Question: is anyone – and I mean anyone – somehow surprised that the Supercommittee failed?
Seriously? Is there anyone who actually thought that this collection of ideologically loyal representatives handpicked by leaders on each side was ever going to compromise and try to work something out?
I’m not suggesting that compromise was the right or best thing to do – I’m simply asking a question about the make up of the committee and how anyone who knows anything about how Washington DC works could have or would have expected success.
And, as Michael said in the podcast, there was no incentive for them to succeed. There was every incentive to do exactly what happened, fail to reach any sort of consensus.
So, as Jim Geraghty quips in today’s Morning Jolt, they now get back to what they do best:
After the Supercommittee, Congress returns to its core competency: finger-pointing
And we will certainly see much of that in the next few weeks. Already some in the media are trying to spin it a certain way.
The imminent failure of the congressional deficit “supercommittee,” which had a chance to settle the nation’s tax policy for the next decade, would thrust the much-contested Bush tax cuts into the forefront of next year’s presidential campaign.
Why do I consider that “spin”? Because the “much-contested Bush tax cuts” are simply the current tax rate, nothing more. Tax rates have changed over the many years of income taxation and never has one rate, which has been in effect for years, been referred too as a “tax cut”. They certainly didn’t refer to tax increases under Bill Clinton as the “much-contested Clinton tax increases” did they?
No, they were simply the new tax rates.
So as with many things, the media has bought into the description that one side has put out there to keep attention focused in a negative way on the so-called “rich”. Rarely do they point out the amount of the total taxes these “rich” pay when they parrot the politicians call for the rich to pay their “fair share”. Nor do they bother to point out that even if the “rich” pay 100% of their earnings in taxes it won’t solve the deficit problem.
Presented as the unchallenged panacea to all that is wrong is this tax increase.
Note what isn’t mentioned. Spending. In fact, we’ve quietly slipped past $15 trillion cumulative national debt in the last week. That means that in less than a year, another trillion in spending borrowed money has occurred. We’ve now managed to run up a debt equal to 100% of our nation’s GDP.
That should be what we’re talking about in the 2012 presidential campaign. How we managed in 3 short years to push the debt from $9 trillion to $15 trillion. It certainly wasn’t the “rich” who did that, nor would increasing taxes on them have stopped it.
While at some point revenue increases may end up being something the Congress will discuss, the problem to this point remains the fact that Congress has done absolutely nothing to stem the red ink that keeps running our national debt through the roof.
And the sequestration cuts supposedly triggered by the failure of the Supercommittee take place when? 2013 of course. After the election and when a new Congress, which can’t be held to the cuts made by a former Congress, comes into existence.
In reality, this is nothing more than a new fangled way for our politicians to kick the can down the road while they squabble about something which really has no bearing and would have little effect on the primary problem: out-of-control spending.
As the Supercommittee’s deadline quickly approaches and their ability to reach an agreement diminishes, a new Battleground poll reveals the public’s strong opposition to more defense cuts. Already under the gun to make $450 billion in cuts, the failure of the Supercommittee to reach agreement would mean additional across the board cuts in all areas of the Department of Defense.
When asked for their opinion about further cuts, 82% were strongly or somewhat opposed to those cuts (59% strongly opposed).
There is, it appears, a dawning realization that we as a country are again about to put ourselves in serious trouble if we don’t maintain our military edge that has served us so well since WWII.
Recently, in a reply to an inquiry into the effects of the across the board cuts that will be mandated by a Supercommittee failure, Senators McCain and Graham asked Secretary of Defense Leon Panetta to detail them. In his reply he noted some very disturbing results of further cuts. The mandated cuts would amount to about an additional 20%. According to Secretary Panetta, that sort of reduction would mean major weapons systems, designed to ensure our national security for decades to come, would have to be cut:
• Reductions at this level would lead to:
o The smallest ground force since 1940.
o A fleet of fewer than 230 ships, the smallest level since 1915.
o The smallest tactical fighter force in the history of the Air Force.
All exceedingly dangerous developments. All developments which would limit our ability to respond to a national security crisis and certainly effect our ability to deal with more than one. Reducing our levels to those cited by Panetta would be extraordinarily short-sighted.
For instance, reducing our tactical Air Force to record levels puts one of our major force projection (along with the Navy) means in a position of not being able to fulfill that role. Today the tactical airframes our pilots fly are decades old and worn out. They’ve reached the end of their service life. It is critical that the next generation of fighters continue to be developed and fielded. In a letter to Rep. Randy Forbes, 7 retired Air Force generals of the Air Force Association outline the risk:
The Air Force now finds itself in a situation where another acquisition deferment will lead to the eventual cessation of key missions. Accordingly, while the recapitalization list is generally considered in terms of systems, it really comes down to a question of what capabilities the nation wants to preserve. Does the United States want to retain the capacity to engage in missions like stemming nuclear proliferation, managing the rise of near-peer competitors, and defending the homeland?
Leaders need to fully consider the ramifications of the decisions they make today as they seek to guide our nation through this difficult period. Just as our legacy fleet has enabled national policy objectives over the past several decades, our future investments will govern the options available to leaders into the 2030s and 2040s. Investing in capable systems will make the difference between success and failure in future wars and between life and death for those who answer the call to serve our nation. When viewed in those terms, failing to adequately invest in the Air Force would be the decision that proves "too expensive" for our nation.
Those two paragraphs outline the criticality of the need for continuing to fund the weapons systems of the future. We may be able to get away with not doing so right now, but we guarantee that our options will be severely limited and our national security capabilities degraded significantly 20 to 30 years down the road if we do so today.
And there’s another reason to resist the temptation to make further cuts at DoD that is particularly significant at this time. Professor Stephan Fuller of George Mason University testified before the House Armed Services Committee that the cancellation of weapons systems would have a profound negative effect on both the economy and unemployment such as:
– A loss of 1,006,315 jobs (124,428 direct, 881,887 indirect)
– Raise the unemployment rate by .6% (9% to 9.6%)
– Drop GDP growth by $86.46 billion (25% of the projected growth in 2013)
No one is arguing that DoD is or should be a jobs program. But it is obvious the impact would be severe not only among DoD prime contractors but even more so downstream. Ironically, one of the reasons our politicians justified their bailout of the auto industry was downstream job losses in a time of economic turmoil. That turmoil still exists today.
If the cited poll is any indicator, the public has come to realize the dangerous waters we’re navigating with these possible cuts. They’re realizing that what guarantees our peace is our strength and our strength is maintained by keeping the technological edge over potential enemies and developing weapons systems to deploy that technology. Without that ability to guarantee our national security, all the other things we treasure are jeopardized. Additionally, our military demise will only encourage the bad actors in the world to increase activities which are detrimental to both peace and our national security.
While it is certainly a time to look for all legitimate means and methods to cut government spending, sequestration as demanded by the Supercommittee’s failure to reach agreement isn’t one of them. Mindless cuts into that which guarantees our safety today and in the future will come back to haunt us if we allow them.