Living From Hand To Mouth

A/P Photo

February 8, 2010:  It's not surprising that Alaska's former governor was caught using hand notes during her presentation to the Tea Party Convention in Nashville, after all this is the same person who once demanded that all debate participants remained seated when answering questions because it was the only way for her to hide her cue cards.

But what Palin's palm notes do offer is insight into the current debate that Palin, the Tea Party Movement and others are engaging in disingenuously. It's written right there in black ink on white skin.

Notice how according to the A/P photo, the word "Budget" is crossed out and replaced with "Tax?" I'll take a swing at how the palm correction happened.

A political advisor backstage probably saw her hand crib notes and said "wait, don't talk about budget cuts because then people are going to ask you where to cut the budget. Some in the crowd are already freaked out about possible Medicare cuts so talk about tax cuts."

But this is the dirty little secret that nobody wants to talk about; with the nation's tremendous growing national debt, tax cuts will never stimulate our current economy enough to pay for government without significant entitlement reforms.

Already tax rates are at all time lows and capitol gains taxes are below Reagan era levels. When President George W. Bush was elected in 2000 he successfully proposed tax cuts because the federal government enjoyed a huge cash surplus and Bush correctly argued to the public, "it's your money."

However over the next eight years, while taxes were being cut to stimulate the economy, government spending went through the roof. Not only did the country entered into two wars but the bailouts along with the growing cost of entitlement programs coupled with more and more people depending on those programs has caused a doubling of the national debt.

And while the blame goes to both parties, over 80% of the nation's debt has been accumulated under Republican presidents. 

Meanwhile with a new Democratic controlled Congress and White House, they've simply changed the existing Republican tune from borrow and spend to tax and spend.   

With baby boomers scheduled to retire in force beginning this year driving up the number of participants in both social security and Medicare at a time there are fewer employment opportunities that pay for both programs through payroll taxes, the math doesn't work.

But here is why few, including those who preach about smaller government, ever have any specifics about budget cuts; no politician is getting elected or re-elected by telling voters they'll have to pay more and get less.

Over .40 cents out of every dollar the federal government spends is for two entitlement programs; Social Security and Medicare. A quick glance around the meeting hall at the Tea Party Convention showed a significant amount of sixty plus Americans who are either on Social Security and Medicare or are pretty close to joining the clubs.

In fact it seems the protests that have emerged from the Tea Party events has been from two views; those who are genuinely worried about massive government growth and those who are worried about health care over haul because it will entail cuts to the government run health care programs they're on now. 

So what else can be cut from the federal budget?

With over 40% of the federal budget going towards Social Security and Medicare, the next biggest chunk of the federal budget is the 23% we spend on national defense.

Cutting military spending at the same time we are committing more resources in Afghanistan? It has proven to be a significant political risk for politicians to endorse any cuts in defense funding at a time when the nation's sons and daughters are on the front lines.

The remaining money spent by the Feds is a mix between mandatory costs of operating government (17%), discretionary funding (12%) and interest on the national debt (5%). The challenge with reducing two of these areas is that it's difficult to do without passing on significant cost to states and local communities.

From federal grants that fund local public safety improvements and education programs to annual contributions to state capital budgets, every dollar cut in federal aide would be accompanied by a corresponding responsibility to state and local taxpayers.

It took the Republican lawmakers across the country just a few days to jointly protest the expansion of Medicare due to the tremendous costs shifts to state budgets.   

The problem for D.C. politicians is the only fear worse than going home without a few slices of bacon in your pockets is going home to accusations they're your actions caused local programs to be cut or taxes to go up.

At the end of the day, the battle in Congress between fiscal responsibility and satisfying their constituents, isn't really a battle at all. That's why spending continues to grow, despite a steady drum beat of mixed messages.

When you're in the majority, it's leadership to be able to stuff a transportation bill like a turkey or get a special waiver so your home state saves billions on future Medicaid payments even though you promised voters a break fom business as usual. It's always a responsible budget when talking about your budget and the bacon you've brought home is re-election gold.

When you're in the minority, it's leadership to be able to vote against reckless spending, even though your side never turns down a budget appropriation. It's always an irresponsible budget when talking about their budget and the bacon you've brought home is still re-election gold.

But perhaps nothing quite exemplifies the difficulty to reduce government spending than a current proposal to slash $3.5 billion from NASA in President Barrack Obama's recently proposed budget.

As a leading Republican in the U.S. Senate, John Cornyn (R-Texas), had been a loud critic of spending programs under the Obama administration. But when Obama's budget knife proposed to slice the budget at Houston's mission control, Cornyn took a different tone. 

Asked about the discrepancy by Politico's Manu Raju, Cornyn said Congress should establish a sunset commission to eliminate wasteful spending.

Cornyn was appointed to the Senate in 2002 at a time the national debt was $6.1 trillion. Today the nation's debt stands at over $12 trillion. By 2020, the cost of interest on the national debt will be one of the largest expenditures in the federal budget.

So after eight years of helping add an additional $6 trillion in debt to the nation's credit card, Cornyn suggests the solution to financial mess is passing the buck to a group of citizens.  

Apparently, political leadership in America today is forged on the premise that living hand to mouth is all America deserves.