JONATHAN CHAIT NOVEMBER 12, 2010
Stan Collender identifies the biggest hole in the center of the debt commission's plan -- it wrenches billions of dollars out of the domestic discretionary budget without saying what functions will be sacrificed:
The plan calls for a substantial reduction in federal employees. A reduction in employees generally results in the government relying on more outside consultants to get the work done but, in addition to the recommended reductions-in-force, Bowles-Simpson also calls for a significant cuts in the use of contractors.
The combination of those two seems to indicate that the now smaller number of federal employees will have to do everything that was done before, that is, that they will have to be much more productive. But Bowles-Simpson also calls for a three-year freeze on federal employee salaries and that almost inevitably means an increasing number of federal workers will quit. That will reduce rather than increase productivity as new and less experienced workers replace the more senior folks who will have left for greener pastures.
In other words, Bowles-Simpson projects substantial savings based on the expectation that a less experienced and much smaller federal workforce will be more productive and just as effective than the more experienced and larger workforce it replaces. That makes absolutely no sense.
Bowles-Simpson seems to have been put together backwards. Instead of starting with a plan about what the federal government should no longer do and then determining the savings from the smaller number of employees that would be needed to do what's left to be done, with limited exceptions the plan focuses on the reduced workforce but makes few assumptions, suggestions, or recommendations about what services the government should no longer provide. The assumptions it does make don't appear to justify the cuts in the number of employees and contractors.
The type of proposals that are needed are: Should the government stop prosecuting and jailing as many criminals and should the sentences be shorter for those it convicts? Should it fund less or no research on cancer and similar diseases? Should the FBI no longer investigate white collar crime? Should the military not be prepared to conduct as many operations? Should veterans health care be eliminated?
Here is the deeper problem. Conservatives are convinced the federal budget is filled with waste and useless bureaucrats. Yet they have a very difficult time articulating functions that the government is fulfilling that it shouldn't be. There certainly are some -- farm subsidies is one of the biggest examples. The government should get out of that business altogether.
But for the most part, the domestic discretionary budget has been squeezed for savings for several decades on end. Virtually all of the programs remaining represent important public functions. That's why the commission is reduced to proposing charging visitors to the national zoo and implementing phony schemes to cut government staff and pay without changing any of government's mission. If you want to treat this portion of the budget reasonably, you need to either actually agree on some functions the federal government will stop performing, or else just recognize that you need to start paying for the functions it is performing. Catering to airy conservative prejudices against government without translating that into a specific re-conception of the federal role is useless.
To be clear, I think the revenue increases, defense spending cuts, cuts to assorted programs like farm subsidies, and entitlement cuts are a coherent and useful contribution to the deficit problem. The treatment of the discretionary budget is not.