Editore"s Note
Tilting at Windmills

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March 16, 2011

WHEN CUTTING MORE ENDS UP COSTING MORE.... We talked a couple of weeks ago about how misguided it is for congressional Republicans to cut funding for the Internal Revenue Service. The goals are fundamentally backwards -- the GOP intends to "save" money and lower the deficit by slashing the IRS budget, which would in turn end up costing more money and raising the deficit.

Why? Because for every dollar the IRS spends on audits, liens, and property seizures, the government brings in more than $10. If the goal is reducing the deficit, undermining the agency that collects revenue is counter-productive. Indeed, the Obama administration -- which may be more interested in fiscal responsibility than it should be -- wants to increase the IRS's budget precisely because it will reduce the budget shortfall Republicans pretend to care about.

In other words, in this case, the GOP plan to reduce the deficit is almost certain to increase the deficit.

Ezra Klein uses this as a launching pad to highlight the fact that cutting spending not only fails in some occasions to reduce the deficit, it even fails to actually reduce spending.

There are three categories of spending in which cuts lead to more, rather than less, spending down the line, says Alice Rivlin, former director of both the Congressional Budget Office and the Office of Management and Budget. Inspection, enforcement and maintenance. The GOP is trying to cut all three.

I can appreciate why some of this seems counter-intuitive. I can even imagine some Fox News personality telling viewers, "Those wacky liberals think it costs money to cut spending! What fools!"

But it just requires a little bit of thought. If we cut spending on volcano monitoring and tsunami warnings, we save a little money on maintenance, but pay a lot of money on damage repairs after disaster strikes. If we cut spending on food safety, we save a little money on inspection, but pay a lot of money on health care costs when consumers get sick. If we cut spending for the Securities and Exchange Commission, as Republicans are desperate to do, we save a little money on enforcement, but pay a lot of money to clean up financial catastrophes.

This comes up all the time. A couple of years ago, Sen. John McCain (R-Ariz.) thought it was outrageous to spend $650,000 on "beaver management" in North Carolina and Mississippi, blissfully unaware of the fact that this funding ended up saving nearly $5 million in potential flood damage to farms, timber lands, and roadways. Spending a little money saved a lot of money.

Ezra summarized all of this nicely:

There are all sorts of reasons Republicans are being penny-wise and pound-foolish. Cutting $100 billion in spending in one year sounded good on the campaign trail but turned out to be tough in practice. Curtailing the IRS and cutting the Department of Health and Human Services -- and, particularly, its ability to implement health-care reform -- is a long-term ideological objective for Republicans.

Whatever the reason, the effect will be the same: a higher likelihood of pricey disasters, an easier time for fraudsters, and bigger price tags when we have to rebuild what we could've just repaired.

Just don't try to explain any of this to congressional Republicans. It seems to make their heads hurt.

Steve Benen 1:25 PM Permalink | Trackbacks | Comments (22)

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Comments

Breaking News! Robbers say 'cut police force'!

Posted by: DAY on March 16, 2011 at 1:30 PM | PERMALINK

My personal favorite was when, during the Bush mis-Adminsrtation, they re-focused the IRS away from rich tax cheats to poor and middle class ones.

I guess there were too many Swiss Bank accounts opened up by teachers, machinists, and cops; too many poor and middle-class people bought luxury cars, and too many yachts, and cigarette boats; and too many steaks and lobsters were purchased by young bucks.

I don't suppose anyone wants to try to explain how 'a stitch in time will save nine' works, do they?

To call them idiots is an insult to all real idiots out there.

Posted by: c u n d gulag on March 16, 2011 at 1:33 PM | PERMALINK

This isn't about the deficit! Republicans don't care about the deficit.

The old school republicans just want a merit badge for 'cutting spending', while the Tea Party nihilists want to destroy the government.

Posted by: Holmes on March 16, 2011 at 1:34 PM | PERMALINK

All sort of reasons Republicans are being penny-wise and pound foolish?

Let me name the top three.

They are stupid, venal and ignorant.

Posted by: fourlegsgood on March 16, 2011 at 1:48 PM | PERMALINK

This is a very old battle.

My mother worked for the IRS in the 60's and 70's and even then the conservatives did not want the IRS to be funded adequately. The numbers then were about the same - for every dollar spent on enforcement revenue increased by at least $10.

Conservatives hate to pay taxes and God forbid that the IRS actually gets more efficient at collecting them. They really fear the IRS and will do whatever is possible to hamstring the agency using any excuse.

Posted by: Rick B on March 16, 2011 at 1:50 PM | PERMALINK

It actually works to cut spending on inspection, maintenance and enforcement if there is no intention to mitigate the problems that come up. For instance, if there is no tsunami monitoring, and the west coast experiences damage and loss of life from an unexpected tsunami, it actually doesn't cost the government anything extra if the affected areas are not able to access emergency services or funds. The people there simply suffer and die, but the government doesn't have to pay for it. Similarly, if there is a nationwide release of Salmonella-tainted food, people simply get sick and die, or pay their doctors to treat them. Those without access to private health care don't appear in the budget at all. They just die. It's really a money-saver!

Posted by: Daniel Kim on March 16, 2011 at 1:53 PM | PERMALINK

Unless you can prove to them, without a doubt, that prevention now will stop something bad from happening later, they never, ever think that it will actually happen. You literally would need to get a time machine and take them forward in time to show them the consequences, and most of them would still insist it would never happen.

I don't know if it's a lack of imagination, a lack of empathy, or what, but they genuinely seem surprised each and every time a completely predictable outcome that they were warned about comes to pass. And yet they still don't learn from being wrong. Over and over again.

And, yes, it's more about depriving "unworthy" people of things than cutting costs. Here in California, Schwarzenegger wanted to cut home care for disabled people out of the budget. Of course, it turned out that it would cost the state millions of dollars more to get rid of the home care workers, because many of those disabled people would would be unable to live on their own without home care and have to go to a state-funded nursing home, which costs a lot more than a home care worker's measly $10 an hour.

Arnie was just un-ideological enough to realize that spending more to "save" money was dumb, but I don't expect Congressional Republicans to be able to see the facts in front of their face.

Posted by: Mnemosyne on March 16, 2011 at 1:56 PM | PERMALINK

The GOP are just following their corporate masters and the ubber-rich. Cut the IRS budget, and the IRS will not have enough agents to conduct audits on tax cheaters or other shenanigans that could be taking place, allowing even more money to flow upwards. Why should corporations and the ubber-rich have to pay for government social services--only poor people are cheaters, taking their hard-earned money away!

Posted by: eahopp on March 16, 2011 at 1:56 PM | PERMALINK

These gentle people are largely the same easily amazed folks who when apprised of Governor Bush's less than spot on replies to a Boston journalist , returned to the shiny spot of the unprepared , what a gotcha ambush .
Well doesn't it just look like the campaign apparatus of the right wing in motion . Research an individual and take what appears to be an out of the water remark and present it as the heart and soul of the opponent .
So , Saint John of McCain , first of Arizonian , makes a typical smart response in the character of the simple idea of a prudent (zillionaire) shopper , maybe even a little snarky (acceptable in his stagy high dudgeon) .
The first reflex of the lip slinger is speak first , attack first , sneer first . Governor Christie has demonstrated an admirable dexterity within the reflexive natural feel for presenting the world according to the angry citizen .
It seems the time has come when the weary heads that make ends meet tire of the Eddie Haskell eternal dodge .
This might have something to do with the Bill Kristol purity , which although Kristol's is untouchable as any non steroidal record , it is striven for by every right wing "leader" . Winning smile or not when you are known as
bloody Bill , with as pure an unblemished with thought record of his , the morning after may include a heartfelt urge to rid oneself of the answer that strips one of every value .

Posted by: FRP on March 16, 2011 at 1:59 PM | PERMALINK

"the GOP plan to reduce the deficit is almost certain to increase the deficit."

It's no different than their plan to reduce joblessness by laying off a bunch of government workers.

And nearly half of Americans buy it.

God our country is stupid.

Posted by: jharp on March 16, 2011 at 2:00 PM | PERMALINK

But it just requires a little bit of thought.

Yep. That would be the problem.

Posted by: Sarcastro on March 16, 2011 at 2:20 PM | PERMALINK

The Repubs never could figure out the old saying "A stitch in time saves nine."

Posted by: martin on March 16, 2011 at 2:24 PM | PERMALINK

"Because for every dollar the IRS spends on audits, liens, and property seizures, the government brings in more than $10."

In the goofy world of Republican policy math this is a net loss. When I started working for the IRS in the mid-80s there was a report showing we could recoup a lot more money by using the resources we had to do more corporate audits instead of auditing individual returns. Ray-gun immediately ordered more individual returns audited and less corporate audits.

Posted by: max on March 16, 2011 at 2:26 PM | PERMALINK

The conservatives do this to other federal agencies too. One gets grossly rich far less quickly if one's company is forced to abide by regulations that cut into the profit margin. Any agency with oversight or regulatory capabilities, such as the EPA, Corps of Engineers, and others, have had their budgets flat-lined, freezes placed on hiring, and watch in frustration as their weakened struggles to keep criminal activities in check get overwhelmed.

Corporations have bought politicians and judges alike, and now have more than enough of those in pocket to begin dismantling those inconvenient laws and regulations, which means clean air, clean water, pollution controls, financial controls, wages and earnings, little things like justice and equality, and other little perks of this once great nation are being shit canned. We saw the effects of it during the Bush reign, but as the Obama administration has countered few of the former administration's damages, the degradation is being compounded by the next layer of corruption.

These agencies are the internal battle lines of our nation where corruption meets justice, where corporations are supposed to be kept in line by strong regulatory oversight. The corporations have always known this, and now they've worked to dismantle the public trust of that line, worked to dismantle the agencies of their regulatory oversight, and are working to leave only the illusion of regulation in its place. Who will be strong enough to reestablish that line inspite of the fact that our planet is at critical junctures already, that so many elected officials are bought, when the public has been swallowing the Bad Government meme for this many years?

Poor IRS, sure. But they are one agency. The fish being fried here is much much larger. Its the worst aspect of free market, corporations free of oversight. No impediment to profit, to include lands, people, or law.

Posted by: Skip on March 16, 2011 at 2:40 PM | PERMALINK

I think it's worth noting that the Washington Monthly has a great piece on this very topic:

http://www.washingtonmonthly.com/features/2011/1103.gravois.html

Posted by: Chris on March 16, 2011 at 2:42 PM | PERMALINK

yes, isn't it cute and funny how those wacky Republicans think? Meanwhile, they've successfully cut $10 billion, at an annual rate of $100 billion, while managing to make that seem the MODERATE position. When the other side caves as Obama and the Dems are continually doing in this "fight", that doesn't mean the war stops, it just moves closer to the final destination.

Posted by: bruce k on March 16, 2011 at 2:44 PM | PERMALINK

The GOP is using the budget to settle old scores and to further their own political advantages. There is literally no logic, coherence or public welfare iincluded in their plans. To assume they have any interest in helping the nation or actually tackling deficit issues is wrong on its face. Their budget cuts will make the deficit far worse. Every actual economist knows this. And here we are. They aree enemies of prosperity.

Posted by: Sparko on March 16, 2011 at 2:48 PM | PERMALINK

I guess these folks never heard the wise saying "A stitch in time saves nine".

Posted by: Hmmmmm on March 16, 2011 at 3:00 PM | PERMALINK

Whatever the reason, the effect will be the same: a higher likelihood of pricey disasters, an easier time for fraudsters, and bigger price tags when we have to rebuild what we could've just repaired.

No shit, Ezra! Does it not occur to you (and Steve) that it's by design?

There are two kinds of politicians--the idealists who think (for a few seconds, anyway) that they are doing the public good and the pragmatists who are out for their own interest and to protecting them from the encroachment of the do-gooders. The latter includes a large number of crooks. (See Scott, Governor.)

They want pricey disasters because they can then plunder the public treasury, lest the "less fortunate" get it--those who get involved are industrious and those who don't are lazy, or so they believe. They want rebuilding so that they and their friends can get contracts and they want the cycle to repeat because at every turn of the cycle they make a profit. There is no "as if" here--it's all by design. Just remember that patriotism is the last refuge of the scoundrel and apply liberally.

Posted by: buck on March 16, 2011 at 3:13 PM | PERMALINK

Why put money into the I.R.S. when it's going to be replaced by a flat tax?

Posted by: ComradeAnon on March 16, 2011 at 3:18 PM | PERMALINK

monther jones had a good piece on all the money the gop house wants to cut from food safety programs....and all the hell that would cause to us mere citizens in the party's endless support of e-coli conservatism

http://motherjones.com/politics/2011/03/gop-budget-cuts-food-safety

Posted by: dj spellchecka on March 16, 2011 at 3:51 PM | PERMALINK

"If we cut spending on volcano monitoring and tsunami warnings, we save a little money on maintenance, but pay a lot of money on damage repairs after disaster strikes."

Not much you can do to stop property damage.

Saving lives is the only upside to this Democrat boondoggle.

Posted by: toowearyforoutrage on March 16, 2011 at 3:58 PM | PERMALINK




 

 

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