Number 553 May 7, 2014

This Week: The Disappearing Budget

"Quote" of the Week: "Ordinary citizens have virtually no influence."
A Tale of Three Budgets
There IS an Alternative: The Better Off Budget
A Couple of Helpful Hints on the Budget


A major study that just came out last month looked at the vitality of democracy in the United States, and concluded that "The preferences of the average American appear to have only a minuscule, near-zero, statistically non-significant impact upon public policy." The study was ignored by the daily press—with the exception of a dozen-or-so college newspapers—with the result that very few people have heard of it.

The idea that there is a bit of a gap, or perhaps a yawning chasm, between the wishes of the general public and the actions of their government may seem rather obvious to many. But it's good to have some academics do a rigorous study on the subject, don't you think? And this week's Nygaard Notes features a feet-on-the-ground look at the role the media plays in this anti-democratic dynamic. Three budget proposals, and the mass media ignores the one that most closely reflects the majority's desires. Don't believe it? Then this issue of Nygaard Notes is for you.



"Quote" of the Week: "Ordinary citizens have virtually no influence."

Here's Princeton University professor of politics Martin Gilens, responding to a question about his just-released study on democracy in the United States. The study, called "Testing Theories of American Politics: Elites, Interest Groups, and Average Citizens," used enormous amounts of data to try to assess the relationship between what average people want their government to do and what their government actually does. He was asked to give a 30-second summary of the main conclusions of the study, and here's what he said:

"[O]rdinary citizens have virtually no influence over what their government does in the United States. And economic elites and interest groups, especially those representing business, have a substantial degree of influence. Government policy-making over the last few decades reflects the preferences of those groups—of economic elites and of organized interests."


A Tale of Three Budgets

An important study came out on April 9th that, so far, has escaped notice in all but a few campus newsletters and political blogs. The study will actually be published this fall in a political science journal, but an advance copy was released on April 9th. The study looks at the political system in the United States and attempts to answer—in a rigorous, academic way—the question "Who governs? Who really rules? To what extent is the broad body of U.S. citizens sovereign, semi-sovereign, or largely powerless?" The authors conclude that "ordinary citizens have virtually no influence over what their government does in the United States."

I'll no doubt be saying more about this study in a future Nygaard Notes, but this week I want to talk about the federal budget and how its treatment in the media illustrates the gap between what we want and what we get, when "we" means the 99%.

Spring is the time when the federal government begins the budgeting process. The President usually proposes a budget to Congress in February, for the next fiscal year that starts in October. Typically the President goes first, then others propose their own budgets. This year we have three major proposals, although one could be forgiven for thinking that there are only two, since the media hasn't mentioned the third one.

The President's ideas always get covered, and when the Obama budget came out on March 4th this year, it was characterized by the media as a liberal "wish list" that had no chance of passing. The Washington Post said that the point of it was not to pass it in the Congress, but simply to "lay out" for purely political reasons "a familiar wish list of significant domestic initiatives that have been ignored." USA Today's headline was "Obama Unveils Wish List," and the article called his budget proposal "an aspirational document" which "includes a wish list for new manufacturing hubs, job training, early childhood and other domestic programs." A McClatchy-Tribune story called it "a wish list of programs," which was simply "a campaign-ready agenda for Democrats."

And the headline in the New York Times neatly summed up the media consensus: "Obama's Budget Is Populist Wish List and an Election Blueprint." The Times went on to quote the Republican point man on budget matters, Republican Rep. Paul Ryan of Wisconsin, saying that "This budget isn't a serious document, it's a campaign brochure." It must be a real time-saver for the nation's leading newspaper to take a Republican talking point as their headline.

The very same Paul Ryan proposed a Republican version of the 2015 federal budget on April 1st, which was also widely covered in the media. (The name they assigned to their proposal—The Path to Prosperity—would be funny if it weren't so important.) Like the Obama budget, it has no chance of actually becoming law, which didn't stop it from passing on party lines in the Republican-controlled House of Representatives on April 10th. As with the Obama budget, it was seen by the media as a campaign document rather than as a serious proposal. USA Today reported, echoing its coverage of the Obama budget, that the "The [Ryan] budget plan is not expected or really even intended to become law; it is designed to outline Republican priorities and goals."

Now we come to the third major budget proposal before the Congress. On March 12th the Congressional Progressive Caucus (CPC) submitted its 2015 budget Proposal, which they call The Better Off Budget. This third proposed budget, unlike the first two, was not covered by the media at all. In fact, no daily newspaper mentioned it, other than a single sentence in an April 15th Washington Post article on the campaign of a Virginia candidate for Congress.

What do we see here? What we see is that the President proposes a budget that has no chance of passing, and it's widely reported and discussed. Then we see the Republicans propose a budget that has no chance of passing, and it's widely reported and discussed. Then a third budget is proposed that has no chance of passing, and it's ignored and remains unknown to all but the budget geeks among us.

One might imagine that the reason for the virtual blackout is because the CPC budget is so far out of touch with the wishes of the electorate—so radical that it's beyond even the President's hopelessly-liberal "wish list"—that it doesn't deserve to be discussed with the other proposals. And, if that makes sense, then it must be true that the other proposals must better reflect the wishes of the public. Right? No, that's not at all the case at all, as the next article will show.


There IS an Alternative: The Better Off Budget

On April 2nd the National Priorities Project (NPP) released their fourth annual "Competing Visions" analysis, comparing three different proposals for the next federal budget. One proposal comes from the Obama administration. One comes from House Republicans, led by Wisconsin Rep. Paul Ryan. The third is a proposal from the House Congressional Progressive Caucus (CPC), which no one has ever heard of. So the NPP analysis is worthwhile simply for noticing the CPC budget and attempting to analyze it. But the NPP analysis goes one better. They not only highlight what each budget would do in key areas, but they also note what the public wants the budget to do in each area.

It's very unusual in mainstream discussions of the federal budget to mention what the public wants the budget to do.

I recommend going and reading the analysis for yourself, as it's only 5 pages long. But in the meantime, here is a very brief summary of some of what you will find there:

Each of the following paragraphs starts with a statement of what public opinion polls tell us about an issue, followed by a highlight or two from each budget: The Obama budget, the Ryan Budget, and the CPC budget. For each issue, I've added a sentence to tell you which budget is most in accord with public opinion. (Unless noted otherwise, all spending numbers are for the next 10 years.)

"74 percent [of U.S. survey respondents] say improving the job situation is a key issue facing the president and Congress this year." The Obama Budget proposes $143 billion in additional spending over 10 years, which equals 0.33 percent of federal spending over the period; the Ryan Budget proposes no new spending, which is obviously zero percent of federal spending over the period; and the CPC Budget would spend $1.3 trillion over 10 years, which would be 3.02
percent of federal spending over the period.* Most congruent with the public's wishes: The CPC Budget.

"74 percent have a favorable view of the expansion of Medicaid under Obamacare." The Obama Budget maintains the Obamacare expansion; the Ryan Budget would cut Medicaid spending deeply and change it from a needs-based program to a block grant; the CPC Budget would increase Medicaid funding.** Most congruent with the public's wishes: The CPC Budget.

"70 percent oppose cuts to SNAP [Food Stamps]." The Obama Budget proposes no change; The Ryan Budget would cut the program deeply and, again, change it from a needs-based program to a block grant; the CPC Budget would increase spending by $15 billion over five years. Most congruent with the public's wishes: The CPC Budget.

"69 percent say improving the education system in the U.S. is a top priority for the president and Congress this year." The Obama Budget proposes spending $66 billion for Preschool for All; the Ryan Budget would freeze Pell Grants and reduce financial aid to families; the CPC Budget adds $47 billion directly; in addition it builds in "substantial" general funding for education. Most congruent with the public's wishes: The CPC Budget.

"66 percent think corporations pay too little in taxes." The Obama Budget would tighten the rules and eliminate oil and gas tax breaks; the Ryan Budget would reduce the top corporate tax rate from 35 to 25% and reduce taxes on overseas profits; the CPC Budget would impose a "transactions tax" on stock market transactions and outlaw overseas tax avoidance. Most congruent with the public's wishes: The CPC Budget.

"58 percent would support substantial reductions in military spending." The Obama Budget would increase the Pentagon budget; The Ryan Budget would maintain the Pentagon budget; the CPC Budget would reduce the Pentagon budget by $255 billion. Most congruent with the public's wishes: The CPC Budget.

"Opinion polls suggest that domestic investment in education, energy and environment, job training, and other areas are top priorities for Americans." The Obama Budget would spend an additional $162 billion above sequester levels over 10 years (0.38 percent of the overall budget); The Ryan Budget would impose $791 billion in cuts (1.8 percent of spending); and the CPC Budget would add $1.56 trillion in new spending (3.6 percent of the budget). Most congruent with the public's wishes: The CPC Budget.

As you can see, in every case the CPC's Better Off Budget is the proposal that most faithfully reflects the priorities of the majority of USAmericans, at least as they express them in public opinion polls. That's quite remarkable for two reasons: First off, for years there's been a lot of propaganda that has been aimed at convincing people that we need "austerity" and budget-cutting more than anything. Yet, good-sized majorities of the public seem to continue to think for themselves and demand the opposite. Secondly, the failure to report on what is arguably the most popular budget proposal on the table raises serious questions about whose interests are being served by the mainstream media. (It not only raises the questions, it pretty much answers them, doesn't it?)

If you're the kind of person who likes to read these things for yourself, a summary of The Better Off Budget is available online at the CPC website.

There's also a 30-page analysis of The Better Off Budget available online from the Economic Policy Institute. Find it HERE.

* See "A Couple of Helpful Hints on the Budget" in this issue of Nygaard Notes to find out how you can make sense of the billions and trillions of dollars in the federal budget.

** See "A Couple of Helpful Hints on the Budget" in this issue of Nygaard Notes for a brief explanation of "block grants."


A Couple of Helpful Hints on the Budget

The Center for Economic and Policy Research has a tiny, but eye-opening, website called "Responsible Budget Reporting." It has a nifty little calculator that is designed to help you make sense of the incomprehensibly large figures in the federal budget. I mean, who really understands what $1 trillion means? Nobody. Find the "Responsible Budget Reporting" website HERE.


I mention "block grants" a couple of times in this issue. What's wrong with block grants? First of all, the phrase "block grants," while always presented as a "reform," is almost invariably just a code-phrase for "cuts." Proponents speak of "innovation" and "freedom and flexibility" for the states, but a block grant is simply another attempt to impose "fiscal discipline" by reducing the amount of health care, or nutrition assistance, available to poor people.

As it stands now, both SNAP and Medicaid are "counter-cyclical" programs. That is, they provide assistance to more low-income households during an economic downturn or recession and to fewer households during an economic expansion. This not only provides more help when more help is needed, it also has a stimulus effect, as it pumps money into the economy at times when people have less money to spend. So counter-cyclical programs help on the micro-economic level by helping individuals get their needs met. And they have macro-economic benefits due to the stimulus effect. It's a win/win.

The point of a block grant is to give states a certain amount of money to spend on food stamps, Medicaid, or whatever. When that money is spent, the states will have to either come up with more money somehow, or else cut the programs. While the federal government can run deficits in times of recession, states have to balance their budgets. Given the power of wealthy interests on the state level—or anywhere—the likely outcome in times of recession will be to cut programs for the poor.