October 18, 2005,
Feds spend your cash freely and inefficiently.
According to U.S. Comptroller General David Walker, our nation is on an unsustainable financial path. To drive home his point, he recently said: “A Category 6 hurricane is threatening our shores it’s the federal budget deficit.” Solutions, he warned, will require more than cutting pork-barrel-spending projects. He urged a new debate about how we want to spend and raise money.
A huge flaw in government is that its spending tends to enrich special interests while heaping debt on taxpayers. Hundreds of billions of dollars are being committed to fund new federal programs hurricane relief and medical benefits get the most headlines and to prop up congressional pet projects.
This year, Wall Street Journal columnist George Melloan wrote: “Congress knows it has a spending problem, just as alcoholics are aware that they have a drinking problem. The late Democratic Senator Pat Moynihan once said to Journal editors, ‘It doesn’t do any good for you to yell at us we just can’t help it.’”
Washington is deaf to more than yelling. It also ignores logical arguments against financing boondoggles. Let’s examine just one program, Amtrak. Evidence that Amtrak is utterly dysfunctional can be found in 30 reports issued since 1997 by the Government Accountability Office, the Amtrak Reform Council, and others.
The railroad has already hemorrhaged $29 billion in federal funds and loses more money per customer than any other form of transportation. Nonetheless, senators Trent Lott (R., Miss.) and Frank Lautenberg (D., N.J.) gloss over Amtrak’s failures and want to double subsidies to nearly $11.4 billion over the next six years.
Such generosity is absurd.
Consider: In the 1990s, Congress ordered the Internal Revenue Service to give Amtrak a $2.2 billion income-tax “refund” even though Amtrak never paid a penny in income taxes. Supporting the deceitful congressional action, Amtrak promised the bailout would improve its bottom line. But the reverse happened, leading critics to equate the business practices of the nearly bankrupt Amtrak with those of Enron and WorldCom.
Legislators handed liabilities to future taxpayers when in the 1980s they failed to demand reforms after Amtrak defaulted on government-backed loans. Taxpayers will be paying off a billion dollars in Amtrak-related notes until they mature on Nov. 1, 2082. This century’s children will be paying most of their lives for money Amtrak burned through in the last century.
And these horror stories apply to just one program. It’s time to create a new tool to make Congress accountable at tax time for their votes. Let’s start linking the cost of congressional votes to the taxes constituents pay. The IRS can tally spending votes and prorate the amounts by congressional districts and states.
Assume you are a taxpayer who owes $10,000 to the IRS. However, because you are represented by two big-spending Senators and a Representative who tends to cut budgets, the IRS will increase your bill by, say, $3,000 for Big Spending Senator #1 and by another $2,000 for Big Spending Senator #2. Your budget-cutting representative would earn you a $1,000 credit bless him! bringing your payment to $14,000.
Accountability will be a natural byproduct when that constituent sees taxes jump by $4,000 because of those votes. Then we will see some restraint on compulsive spenders who fight to preserve each and every government program.
Instead of serving taxpayers by killing programs, Congress is afraid of disappointing even one constituent or dissuading even one campaign contribution. That’s why this proposal makes sense. How else are we to finally stop members of both parties from perpetuating their self-serving gravy trains?
The nonpartisan National Taxpayers Union Foundation found that in the 108th Congress (2003-2004), the typical representative proposed record-high spending. The average Democrat sought $521 billion in new spending, while the average Republican called for $35 billion in annual budget increases. Similar absurdities were found in the Senate.
We’ve become a people who want what we want as long as others pay for our indulgences. French historian Alexis de Tocqueville warned that American democracy would succeed only until the people realize they can vote themselves money from the public treasury, and then it would fail. We haven’t failed yet, but we still might if the damage caused by special interests doesn’t end.
Psychologists say that to change behavior we must change consequences and make people accountable for their actions. Ballot-box repercussions are easy to foresee as constituents connect voting records and the taxes they owe, and when they see taxpayers in other parts of the country who are more prudently represented forking over fewer dollars.
Political accountability could be boosted even more by Maryland Republican congressman Roscoe Bartlett’s proposal to move the tax-filing deadline from April 15 to the day before Election Day. “I think that Americans might make different choices if they have the price of government on their minds when they cast their ballots,” Bartlett said.
Linking taxes to votes can dissipate Comptroller General Walker’s figurative fiscal hurricane. How refreshing it would be if the Advisory Panel on Federal Tax Reform recommended such a plan in its upcoming report. The panel knows that our tax code contains provisions that distribute tax benefits to specific groups of taxpayers. It's only fair to distribute tax penalties to those constituents who elect wild spenders to Congress.
Joseph Vranich is the author of End of the Line: The Failure of Amtrak Reform and the Future of America’s Passenger Trains (AEI Press).