One of the things I think conservatives have to do to prevent a recurrence of the Trump candidacy is be more honest about the lies Republicans have gotten away with telling for years. One of those lies is that the Defense Department is woefully underfunded and that we can institute massive spending increases to the defense budget just by cutting waste in other parts of the government. Here is Donald Trump parroting this line that was surely written and placed on a teleprompter in front of him by one of the Reagan-era hangers-on that have latched on to his campaign:
Republican presidential candidate Donald Trump on Wednesday called for an end to budget sequestration for military spending, accusing the Obama administration of being weak on defense and calling increased military spending a national security priority.
“As soon as I take office, I will ask Congress to fully eliminate the defense sequester and will submit a new budget to rebuild our military. It is so depleted. We will rebuild our military,” Trump said Wednesday during a speech at the Union League in Philadelphia. “This will increase certainty in the defense community as to funding and will allow military leaders to plan for our future defense needs.”
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The GOP nominee said that he would also ask Congress to fully offset the cost of defense spending increases. He said those offsets would be matched by eliminating government waste — but guaranteed that his administration would protect “hard earned benefits” for Americans. He said that hundreds of billions of dollars can be gained in revenue by finding and stopping incorrect overpayments and recovering unpaid taxes. He also said that energy production and economic gains during his administration would help offset costs.
It isn’t just that Trump is taking aim at the only victory fiscal hawks have extracted from 6 years of House GOP control – although that certainly is objectionable. It’s the absolute magical, everyone-gets-a-unicorn thinking that permeates so much of what passes for policy in Trump’s mind. Let’s start just by describing the absolute lack of understanding of the problem of federal debt on display by Trump here.
Here is a chart of how government spending is currently allocated as between “mandatory,” “discretionary,” and “interest payments.”
The giant green area of this chart consists of the “hard earned benefits” that Trump has declared are off limits. Social security, Medicare, other entitlements. That portion of the pie is large and is growing at an unsustainable rate. When Social Security was created, average American life expectancy was about 55 and retirement age was set at 65. Average American life expectancy today is almost 75 and it gets longer every year. Meanwhile, the retirement age stays at 65.
If this paragraph I’ve just written doesn’t explain to you why any argument over government spending is pointless unless we start by tackling entitlement reforms, then I hope you enjoy the magical unicorn that Donald Trump and Hillary Clinton are promising you. We are heading into a fiscal crisis and Trump has ruled out the one medicine that even has a hope of curing us. But to Trump’s credit, he’s far from the first person to stick his head in the sand like an ostrich and pretend it does not exist; in fact, ignoring the entitlement bomb is a time-honored trick of politicians – even Republicans – because we have tolerated it for entirely too long.
But let’s set that aside for a moment and get to the issue of military spending, because that is what Trump is discussing here. If you look at JUST the yellow portion of the pie above, here is how that breaks down:
As you can see, the military dominates discretionary government spending. Military operations cost more than ten times as much as the next largest line item, which is the actual operation of the Federal government itself. Republicans have long treated this particular piece of the government pie as being exempt from waste, fraud and abuse, as Trump does above. However, the reality is that DoD is one of the most waste-ridden agencies in Government. The DoD is so rife with waste that they cannot even account for where a total of $8.5 Trillion (that’s with a “T”) that has been appropriated to them over the years has gone.
But there’s one thing Trump said in particular that merits special derision, and that is his claim that “He said that hundreds of billions of dollars can be gained in revenue by finding and stopping incorrect overpayments and recovering unpaid taxes.” It turns out that Trump is not the first person to have this idea.
In fact, not only is it an old idea, it’s actually a program that already exists by law. That’s right, back during the George W. Bush administration, Congress created the Recovery Audit Program and commissioned contractors to go through HHS payments (including Medicare, by far the largest portion of the government pie) and find overpayments on behalf of the government. This program was announced with much fanfare at the time of its creation as a program that could potentially save taxpayers billions. The Recovery Audit Contractors (RACs) were permitted to go through three years of government payments and issue “corrections.”
The end result of this program? Contractors identified overpayments that did not amount to even a single billion, much less hundreds of billions. Even worse, hospitals appealed the determinations of the RACs that they had received overpayments, and over 73% of RAC takebacks were overturned on appeal. Thus, not only did taxpayers not get a massive windfall, but hospitals and other healthcare providers were thrown into dire financial straits when the RACs (who were paid on commission) swept through and frivolously declared thousands of old claims to be “overpayments.”
Make no mistake: what Trump is proposing here is a massive increase in deficit spending. Now, Trump might argue that deficit spending is necessary, I suppose, but he should be honest enough to admit up front that the price tag for his massive program of military expansion (as well as the price tag for his massive infrastructure plan) is going to be paid on installment, with interest due. And if he can’t make the case that this spending is worth it anyway, then he shouldn’t be trying to convince people that the unicorn is available for free.