WASHINGTON. Speak loudly, and carry a big bag. That, to rephrase an old political homily, is what makes federal spending run so fast, so tirelessly. I learned this from Paul Hewitt. Until recently, Mr. Hewitt was Executive Director of the National Taxpayers Union Foundation, a Washington group that studies federal spending and taxing.
If his name sounds familiar, it should. Mr. Hewitt has been one of the prime movers behind two widely cited projects that have actually changed Congressional behavior in recent years. In Bill Tally, Foundation staffers built a database to connect and total the costs of all bills sponsored by members of Congress. In Vote Tally, Foundation staffers built a database to connect and total the costs of all votes by members of Congress. Both projects showed that the vast majority of representatives and senators, regardless of party, consistently voted for more spending increases than spending cuts.
Public exposure brought change.
Hewitt says that many members of Congress now try to score well, and pay much closer attention to their actions. As recently as the 102 Congress in 1991-92, for instance, only 24 Congressmen supported more spending reductions than increases. By the 104th Congress, their numbers had risen to 224. In the same period, the number of spending cut Senators rose from 12 to 63.
"But", Hewitt shrugged, "that still doesnt get to the heart of the problem."
Then what is it?
At the deepest levels, the taxpayer and advocates of lower spending are hopelessly outnumbered by those who speak for more spending.
So the Foundation began Witness Tally, a project to see who gave testimony to the multitudes of Congressional committees and subcommittees, and whether they spoke for spending increases or spending cuts.
"We know this is a major leverage point.", Mr. Hewitt said. "The special interest groups love these sub-committees and hearings about their special needs. The subcommittees are dedicated sympathetic groups. There is a lot of neutral testimony but if you opposed spending or supported budget cuts, you found that higher spending was being advocated.
"What struck us was the extent to which this undercut GOP plans to reduce spending. While party leadership said one thing, they were opposed in committees day after day." Often by fellow Republicans.
If this seems a bit abstract, consider these findings from their study:
- Witnesses in favor of spending outnumbered those in favor of cuts by about 6 to one;
- 64 percent of all House hearings failed to have a single witness who favored spending reduction;
- 57 percent of all Senate hearings failed to have a single witness who favored spending reduction;
- special interest groups accounted for 21 percent of the witnesses and were 7.7 times as likely to advocate more spending as less;
- federal employees from federal agencies accounted for 31 percent of witnesses and advocated more spending 6.4 times more than they advocated spending restraint;
- members of Congress accounted for 11 percent of the witnesses and advocated more spending 9.1 times more often than they advocated less spending.
A summary of witness advocacy in 1996, a tally of more than 3,101 testimonies, is shown in the table below:
|Group||Neutral Testimony||Favored Spending||Opposed Spending||Ratio Pro/Anti|
|Federal Agency Witnesses||318||560||89||6.36:1|
|Interest Group Representatives||195||399||52||7.67:1|
|Members of Congress||91||237||26||9.12:1|
|Non-Federal Govt. Reps.||90||207||21||9.86:1|
Source: Witness Tally, National Taxpayers Union Foundation
In a list of the 50 organizations that testified most often, the National Taxpayers Union Foundation found that twenty— including The FBI, the National Research Council, the Department of Education, the Congressional Budget Office, and the Congressional Research Service— had only advocated higher spending. Even Testimony from the Department of the Treasury advocated higher spending over lower spending by a ratio of 17 to 1.
Mr. Hewitt believes that three steps would work to reduce the problem:
- first, put all witnesses on what he calls a pay-go basis. Have them identify cuts to offset their increases.
- second, ensure that there is a taxpayer advocate at every meeting;
- third, rotate all committee members after two years so they dont become closet advocates for their area of knowledge.
What does all this have to do with personal finance and investments? Everything. Todays spending and government obligations are so great that our government pays a premium to borrow, at least 200 basis points over the historical average. That means we do, too, directly and indirectly.
(Readers with computers can learn more by going to the National Taxpayers Union website at www.ntu.org.)
Questions about personal finance and investments may be sent to: Scott Burns, The Dallas Morning News, P.O. Box 655237, Dallas 75265; or faxed to (214)-977-8776; e-mail to email@example.com Check the website: "www.scottburns.com." Questions of general interest will be answered in future columns.