Talking Points on the Economy: Government Spending #8

(A publication of The National Center for Public Policy Research, 300 Eye St. NE Washington, D.C. 20002 (202) 543-4110; Fax (202) 543-5975.)

The Crime Bill: Taking A Bite Out of Your Wallet, Not Out of Crime

On September 13, 1994, President Clinton signed what he labeled the nation's "smartest, toughest" crime bill. But the bill he signed will likely take a bigger bite out of the public's wallet in the form of expensive pork-barrel programs, than out of crime. Among the pork programs approved by Congress and signed into law by the President:

$5 million for the "Prevention, Diagnosis, and Treatment of Tuberculosis in Correctional Instititutions." It's not known how much of a problem tuberculosis is in prisons nor, for that matter, how this program could have any impact whatsoever on crime rates outside these facilities.

$2.7 million for "Missing Alzheimer's Disease Patient Alert Program." It's not clear how Alzheimer's Disease is connected to the nation's spiraling crime rate, but why risk it?

$90 million for the "Ounce of Prevention" program, which provides grants for a variety of purposes including job placement services, recreational programs and so-called "outreach programs for at-risk families." The program has no specific requirements or guidelines for grantees - but then, guidelines would only make it more effective.

$243 million for "Family and Community Endeavor Schools (FACES)," a program which seeks, among other things, to give grants to community-based organizations to supervise activities such as sports, arts and crafts, social activities and dance programs. And you thought this wasn't a tough anti-crime bill.

The crime bill also establishes a new definition of "livestock" as "any domestic animals raised for home use, consumption, or profit, such as horses, pigs, llamas, goats, fowl, sheep, buffalo, and cattle, or the carcasses thereof"; requires that products sold with the "Made in the USA" label have a certain minimum domestic content; and increases penalties for selling a Congressional Medal of Honor. The streets seem safer already.

Information from Heritage Foundation Policy Analyst Scott Hodge and CATO Institute Director of Fiscal Studies Stephen Moore
Issue Date: September 27, 1994

The National Center for Public Policy Research, 501 Capitol Ct NE * Washington, D.C. 20002 Tel. (202) 543-4110 * Fax (202)543-5975
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Talking Points on the Economy: Government Spending #7

(A publication of The National Center for Public Policy Research, 300 Eye St. NE Washington, D.C. 20002 (202) 543-4110; Fax (202) 543-5975.)

Don't Be Played a Fool: Welfare Programs Have Been Increased, Not Cut

Politicians have attempted to blame this year's riot in Los Angeles on more than 20 years of neglect by the federal government. Their harshest criticism has been reserved for former President Ronald Reagan, who they claim slashed social welfare spending to the bone. But every President serving since 1970, both Democrat and Republican, presided over budgets increasing federal spending on social welfare programs. The American people should not allow themselves to be played for fools:

* From 1970 through 1989, some $3.68 trillion (in 1991 dollars) was spent at all levels of government for housing assistance, direct public aid, health and medical care programs, child and nutritional welfare assistance and other programs for low-income Americans.

* Social welfare spending (excluding social security, education and veteran's programs) rose under the Nixon/Ford Administration from $88.17 billion in 1973 to $115.82 billion in 1977 (1991 dollars), a 31% rise.

* Social spending hit $127.27 billion (1991 dollars under President Jimmy Carter's last budget, a rise of almost ten percent in four years.

* Despite the fact that there were 1.7 million fewer people unemployed in 1989 (President Reagan's last budget year) than there were at the end of 1981, federal welfare spending was nine percent higher under the 1989 budget than the 1981 one. Federal welfare expenditures during Reagan's eight budget years totaled 41.0054 trillion (1991 dollars).

* Total municipal spending rose in real terms 26.3% between 1980 and 1989. The federal contribution to such expenditures has risen by 12.7 percent over the past three years.

Information from The National Center for Public Policy Research's National Policy Analysis No. 84, July 1992; Human Events, May 30, 1992; and National Review, June 8, 1992.
Issue Date: July 13, 1992

The National Center for Public Policy Research, 501 Capitol Court, N.E. * Washington, D.C. 20002 Tel. (202) 5430-1286 * Fax (202) 543-5975
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Talking Points on the Economy: Government Spending #6

(A publication of The National Center for Public Policy Research, 300 Eye St. NE Washington, D.C. 20002 (202) 543-4110; Fax (202) 543-5975.)

The Deficit Crisis: Finger of Blame Should be Pointed at Congress, Not the Rich

Congress recently attempted to raise the top income tax rate from 31% to 36% and impose a 10% surtax on millionaires. Advocates of the legislation argued that such a tax hike was necessary to help bring down the federal budget deficit and to ensure that the wealthy paid their fair share of the tax burden. Had the tax increase not been scuttled by a presidential veto, it would have been anything but fair - the rich already pay the lion's share of taxes. Indeed, it's not the wealthy that have failed to do their fair share to bring down the deficit, but Congress.

* Congress has consistently failed to bring federal spending under control. It is Congress, not the rich, that has the power to control government spending. But federal expenditures have risen from $808.3 billion in 1983 to an estimated $1.5 trillion in 1993, an 86% rise in just ten years. The budget deficit has risen from $153.4 billion in 1989 to at least $399.4 billion this year, an increase of over 160% in just three years.

* Congress not only gave itself a big raise recently, but a tax cut. While Congress increasingly calls on the rich to make more sacrifices, Members of Congress are clearly making no sacrifices of their own. In 1990, the year after Members of Congress voted themselves a 40% pay raise, they gave themselves a tax cut. Under the 1990 budget agreement, a tax bubble for joint filers earning between $78,400 and $185,000 was eliminated, lowering taxes for this group from 33% to 31%. Members of Congress just happen to be part of this income group.

* Congress continues pork-barrel spending. Despite the rising deficit and an anemic economy, Congress' spending on expensive, unnecessary programs continues. For instance, the city of Kellogg, Idaho was granted $6.4 million last year to purchase "Bavarian-style gondolas" for the Coeur d'Alene National Forest.

* Congress continues to pocket millions in perks. While railing against the opulence and extravagance of the wealthy, Members of Congress greedily take millions of dollars in taxpayer-funded perks. On average, U.S. Senators and Congressmen take $3.5 million and $1 million, respectively, in perks each year. Among these: free medical and dental care; hundreds of thousands in mailing privileges; a $3,000 tax deduction for maintaining a second residence; travel and meal allowances when they travel overseas; subsidized services; and others.

Information from The New York Times, October 28, 1990; New Republic, December 28, 1989; "The Congress that Can't Say No," by James J. Kilpatrick, February 29, 1992; The Washington Times, April 2, 1992; National Center for Public Policy Research National Policy Analysis paper No. 75 by Amy Moritz; National Center Talking Points on the Economy (Boondoggles No. 4) March 3, 1992; and Historical Tables. Issue Date: April 13, 1992.

The National Center for Public Policy Research, 501 Capitol Ct NE * Washington, D.C. 20002 Tel. (202) 543-4110 * Fax (202)543-5975.
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Talking Points on the Economy: Government Spending #5

(A publication of The National Center for Public Policy Research, 300 Eye St. NE Washington, D.C. 20002 (202) 543-4110; Fax (202) 543-5975.)

Census Bureau's Poverty Sob Story is Largely Fiction

The Census Bureau has estimated that there are at least 30 million Americans living in poverty. The image of over 12 percent of the U.S. population living in squalid conditions and suffering from malnutrition has served as a compelling argument for increased government welfare expenditures. But the Census Bureau has ignored crucial data, resulting in greatly exaggerated estimates of U.S. poverty.
Consider:

* In 1989, low-income households spent $1.94 for every dollar of "income" reported by the Census Bureau. One reason for this discrepancy is that the Bureau ignores most welfare benefits to these households. In 1990, $158 billion in welfare benefits, equal to $11,120 for every poor household in America, was not counted in the Bureau's statistics.

* Almost 40% of all "poor households" own their own homes. Over one million of these homes are worth more than $80,000 and over 215,000 are worth over $200,000.

* There is virtually no poverty-induced malnutrition in the United States. The average low-income American (from the bottom 20% of wage-earners) eats 95% as much meat and 92% as much fresh vegetables as the average American from the upper middle class (top 50% of wage-earners). The average West German consumes only about 75% as much meat as a low-income American.

* "Poor" Americans have twice the living space in their homes as the average citizen of Japan and an average of four times the space of an individual living in the former Soviet Union.

* 62% of all "poor" households own a car; 49% have air conditioning in their homes; 81.3% have telephones; 99.1% have refrigerators; 30.7% have microwave ovens and over 98% have indoor toilets. In contrast, 94% of all households in Britain, 83% of the households in France and 46% of the homes in Japan have indoor toilets.

Information from Heritage Foundation Backgrounders No. 791 and No. 875 by Robert Rector, Issue Date: February 20, 1992.

The National Center for Public Policy Research, 501 Capitol Ct NE * Washington, D.C. 20002 Tel. (202) 543-4110 * Fax (202)543-5975.
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Talking Points on the Economy: Government Spending #4

(A publication of The National Center for Public Policy Research, 300 Eye St. NE Washington, D.C. 20002 (202) 543-4110; Fax (202) 543-5975.)

Congress Stabs Taxpayers in the Back

In January 1991, just three months after Congress approved a record-setting tax hike, Senate Majority Leader George Mitchell asserted that the American people must learn to "do more with less" and that "governments must do the same... to be more careful with your tax dollars."

But as the American people sacrifice through higher taxes, its business as usual in Congress. Members of Congress stabbed taxpayers in the back by approving higher congressional expenditures.

For the 1991 budget year, the cost of running Congress will be approximately $2,547,961,000. Adjusting for inflation, that is an increase of over $317 million over 1990. Since 1960, the cost of Congress has increased by over 1,944 percent.

In the coming year, expenditures for Senate and House committees will rise $5 million and $5.7 million respectively. That is a jump of 9.4% for Senate committees and over 10% for House committees. Since 1960, committee staffs have grown from 910 people to 2,860 in 1990, a three-fold increase.

On July 18, 1991, U.S. Senators voted to give themselves a $23,200 pay raise, boosting their salaries to $125,000 per year. Since the beginning of 1990, salaries for Members of Congress have jumped 40%.

The higher operating cost Congress approved for itself will result in increased spending across the board. Congressional staff help incumbents acquire benefits for their constituents and key campaign contributors (thereby bolstering their re-election chances) by putting pressure on the federal bureaucracy. They do this by writing or calling executive branch offices or by arranging hearings that require the bureaucracy's attention. For example, the Pentagon receives 2,500 calls five days a week and more than 100,000 letters each year from Capitol Hill. With more staff available for such duties, both the operational costs of the Executive Branch and pork-barrel spending will rise.

Information from Heritage Foundation Backgrounder No. 832 by Luis Saenz; Human Events (11/25/89); and National Center for Public Policy Research National Policy Analysis paper No. 67 by Steve W. Kulm. Issue Date: August 13, 1991.

The National Center for Public Policy Research, 501 Capitol Ct NE * Washington, D.C. 20002 Tel. (202) 543-4110 * Fax (202)543-5975.
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Talking Points on the Economy: Government Spending #3

(A publication of The National Center for Public Policy Research, 300 Eye St. NE Washington, D.C. 20002 (202) 543-4110; Fax (202) 543-5975.)

Checklist for Controlling Spending

To control federal spending and reduce the budget deficit, Members of Congress need to ask themselves a few simple questions about each government program. If they answer "yes" to any of the following questions, then the program does not require federal funds and Congress should take action to reform, restructure, or eliminate the program.

* Does the program serve localized or special interests rather than the nation as a whole?

* Has the program failed or fulfilled its mission, outlived its usefulness or simply become irrelevant?

* Is Congress funding duplicate or contradictory programs?

* Does the program or service have identifiable users that should be charged for the service or good they receive?

* Is Congress engaging in central planning or attempting to set "national priorities" that should be left to communities or individuals?

* Can the program or service be provided by private charities and neighborhood organizations?

* Is the program competing with private commercial enterprises?

* Has Congress prevented people from helping themselves by empowering bureaucrats and experts rather than those individuals that the program was intended to help?

* Is Congress creating a program to compensate for laws or regulations that prevent the private sector from responding to people's needs?

* Can't spending for this project or program be postponed another year until the government is in a better financial position?

Checklist from Heritage Foundation Backgrounder No. 795 by Scott Hodge Issue Date: July 1, 1991.

The National Center for Public Policy Research, 501 Capitol Ct NE * Washington, D.C. 20002 Tel. (202) 543-4110 * Fax (202)543-5975.
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Talking Points on the Economy: Government Spending #2

(A publication of The National Center for Public Policy Research, 300 Eye St. NE Washington, D.C. 20002 (202) 543-4110; Fax (202) 543-4110.)

Are You a "Spendaholic?"

The following survey is designed to help Members of Congress and Bush Administration officials determine if they are "spendaholics" - people with the uncontrollable urge to spend the money of others. The questions are identical to those used by groups such as Alcoholics Anonymous in determining "alcoholism risk," except the words "drink" and "drinking" have been replaced with "spend" and "spending."

Respondents may be a "spendaholic" if they answer "yes" to any one of the following questions; are likely to be a "spendaholic" if they answer "yes" to any two questions; and are definitely a "spendaholic" if they answer "yes" to any three or more.

* Have you gotten into financial difficulties because of your spending?

* Do you associate with disreputable people and turn to an inferior environment when you spend?

* Is spending affecting your reputation?

* Do you spend to build your self-confidence?

* Has your spending caused trouble at home (your district)?

* Do you envy people who can spend without getting into trouble?

* Do you tell yourself you can stop spending any time you want to, even though you spend when you don't mean to?

* Have you ever had a complete loss of memory after spending?

* Do you crave spending at a definite time daily?

Information from "Is AA for You?" (Alcoholics Anonymous, 1973) and Johns Hopkins Hospital alcoholism questionaire. Concept inspired by Heritage Foundation Backgrounder No. 819 by Edward L. Hudgins. Issue Date: June 20, 1991.

The National Center for Public Policy Research, 501 Capitol Ct NE * Washington, D.C. 20002 Tel. (202) 543-4110 * Fax (202)543-5975.
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Talking Points on the Economy: Government Spending #1

(A publication of The National Center for Public Policy Research, 300 Eye St. NE Washington, D.C. 20002 (202) 543-4110; Fax (202) 543-5975.)

Myths About the Budget Crisis

* Myth: The five-year deficit-reduction plan approved by Congress in October 1990 combined spending cuts with new taxes. False. By the end of this fiscal year (October 1991), federal spending will have increased $1.97 for every dollar raised in new taxes.

* Myth: The Reagan-era defense build-up is to blame for the current budget crisis. False. Payments to individuals (consisting mostly of entitlements) increased 2.3 times as much as defense spending from 1981 to 1991. Increases in defense spending accounted for less than 20% of total spending increases during the period.

* Myth: Domestic spending should be increased to compensate for deep cuts in such spending over the past ten years. False. From 1981 to 1991, payments to individuals rose by $325.4 billion, or approximately $131 billion in constant 1982 dollars.

* Myth: Reagan's 1982 tax cut is to blame for the size of the deficit because it reduced government revenues. False. Total revenues have climbed from $599.3 billion in 1981 to an estimated $1.091 trillion in 1991. Adjusted for inflation, federal receipts have grown by $148.7 billion since 1981, or 23.2%.

* Myth: President Bush and Congress have been forced to make tough, sometimes unpopular, budgetary decisions because of the massive deficit left by former President Ronald Reagan. False. First, given that the vast majority of the members of Congress serving today were in Congress during the Reagan years (enjoying a re-election rate exceeding 90%), the premise that President Reagan alone is to blame for the deficit is absurd. Second, President Bush and Congress have not taken steps to resolve the deficit, but exacerbated it. By the end of Bush's first term, domestic spending alone will have risen an average of $29 billion per year (at the present rate). Adjusted for inflation, that increase outpaces the domestic spending growth rate under Reagan five-fold. Furthermore, the 1991 budget deficit ($230.5 billion in constant 1982 dollars) is close to double the 1989 deficit (also in 1982 dollars), the last budget approved under Reagan's watch.

Information from "The 1992 Bush Budget: Highlights and Analysis" (Citizens for a Sound Economy) by J. Marc Wheat; Heritage Foundation Backgrounder No. 795 by Scott Hodge; and Heritage Foundation Backgrounder No. 811 by Scott Hodge. Issue Date: June 19, 1991.

The National Center for Public Policy Research * 501 Capitol Ct NE * Washington, D.C. 20002 Tel. (202) 543-4110 * Fax (202)543-5975.
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