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The Government Should Be More Like Families

The American family typically deals with unexpected crises in ways dramatically different than how they are handled by politicians.

Political scientist James Payne explained in his book, “The Culture of Spending,” that in Washington, D.C., a politician’s commitment to problem-solving is measured by the amount of money he or she is willing to throw at a problem. In the American family, of course, things are altogether different.

And whereas in government, a crisis is met with calls for new spending, families see a crisis as a reason not to spend money. For those raised on the idea of saving for a rainy day, the urge to splurge goes out the window in the face of an unexpected illness, a lost job or some type of disaster such as a fire or flood.

A family has limited resources because it is, after all, constrained by the income of the wage earners. Government, because of its ability to tax and borrow, seems constrained by nothing at all. And while America is an enormously compassionate country, our resources are not infinite; the post-Hurricane Katrina spending, on top of all the other new obligations the government has incurred in the past decade, threatens to upset the apple cart of economic growth.

But, in a perfect example of business as usual, Senate Minority Leader Harry Reid (D-Nev.) said he will “not consider offsets in the federal budget to pay for damage” caused by the hurricane until the president “agrees to roll back tax cuts.” The problem is not just on one side of the aisle. Fiscal conservatives were surprised to hear last week from House Majority Leader Tom DeLay (R-Texas) that all of the waste has been eliminated from the federal budget. They were surprised and incredulous because the federal budget is as wasteful as ever.

Emboldened by a president unfamiliar with the veto pen, Congress has taken reckless spending to new heights in recent years. Real non-defense discretionary spending already is up more than 35 percent over President Bush’s first five budget years — more than triple its total increase during all eight years of former President Bill Clinton.

Members of the Republican Study Committee have risen to the occasion with a detailed list of program cuts and terminations that will cover the costs of hurricane relief and reconstruction. The RSC members call their plan, released this week, Operation Offset.

The plan is based on the simple fact that there’s no such thing as a free lunch. There are only three options to pay for reconstruction. The first, raising taxes, has been ruled out by Bush, who correctly observed that raising taxes would derail our national prosperity and make it much harder to rebuild the hurricane zone. Rolling back the Bush tax cuts, which have proved themselves as job creators and sparked the economy to life, would have the same effect.

The second option, borrowing, is just a disguised form of tax increase — a tax on our children and grandchildren, since the money borrowed must eventually be repaid.

The third possibility is the most difficult politically, but also the soundest in the context of public policy: spending cuts equal to or greater than the cost of reconstruction.

One of the most sensible provisions in the RSC’s proposal is to repeal the record 6,000-plus pork-barrel projects in the recent transportation bill, freeing up $25 billion for hurricane relief. This idea, which has now been endorsed by The Wall Street Journal, The New York Times and advocacy groups across the political spectrum, simply is common sense. It is indefensible to spend billions of dollars on unneeded projects elsewhere in the country when the most basic infrastructure of the hurricane zone needs to be rebuilt.

Another major source of offsets is a proposal to delay implementation of the Medicare prescription drug benefit for one year, saving $30.8 billion. This program creates an unfunded obligation for the federal government larger than the entire Social Security financing problem. Delaying this program would not only save us money needed for Katrina relief this year, it also would buy us time to revisit and reform the structure of the program.

The president and Congress must recognize that we live in a world of limited resources. The crisis is a reason for the government to tighten its belt and conserve resources, so that we can spend what must be spent on reconstruction without imperiling our economic future.

Mallory Factor is chairman of the Free Enterprise Fund, which promotes economic growth, lower taxes and limited government through television and radio issue advertising campaigns and policy guidance to Members of Congress.

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