Cuts to Nowhere

The plan out of the House GOP to cut around $40 billion from domestic agencies in the next few months ($32 billion net, but an $8 billion addition for the Pentagon and Veterans Affairs) would be laughable, except cuts like this are no laughing matter. There's a simple reality at foot here: these cuts have nothing to do with putting America on sound fiscal footing, nothing at all. Furthermore, they have nothing to do with job creation.

The nation's fiscal picture is clear - growing Medicare costs are the largest contributor to our long-term fiscal problems. Yet the plan out of the House does not address these costs. (The House did that the other day, by attempting to exacerbate healthcare costs by repealing the Affordable Care Act.)

Additionally, the economic problems facing the country mainly stem from a shortage of demand in the economy. Pulling roughly $40 billion out of the domestic economy removes demand from the economy. It's not yet clear where exactly the $40 billion would come from, but it is likely that some of it comes from programs that either have strong multiplier effects on the overall economy or are the engines of future economic growth. These cuts, especially, must be fought.

By commonly held metrics, these cuts do not contribute to growth or put the nation on a meaningfully better fiscal path. Because of these two facts, it is incumbent on their proponents to explain why they matter. Changing a "culture of spending," as Rep. Paul Ryan purports to do, is not real economic policy. Conservatives clearly hold a faith that less government is better. They should be asked to make that case when they propose such cuts, instead of getting to hide behind a vale of fiscal responsibility or economic literacy.