Here’s a question for House Appropriations Chairman Hal Rogers (R-KY) and his Republican colleagues: Whose side are you on? Rep. Rogers yesterday announced a laundry list of spending cuts over the next seven months that detailed $20 billion in proposed “savings” but promised an eventual $74 billion in cuts relative to the budget President Barack Obama proposed last year. In Rep. Roger’s words, the cuts are intended to “go deep.” Like slashing-the-wrists-of-our-economy deep.
That’s because many of his proposed cuts would target key investments in public infrastructure, funds for research, innovation incentives, and programs to develop and bolster the competitiveness of American businesses. With 15 million unemployed Americans, investment in the U.S. economy at its lowest level in four decades, and productivity growth lagging far behind previous recoveries from economic recession, this plan isn’t fiscal prudence. It’s economic suicide.
If there is one point on which all economists can agree, it is that investment—in infrastructure, in research and innovation, and worker productivity—is the foundation for economic growth. Rep. Rogers’ plan robs the U.S. economy of all three.
Up on the chopping block are efforts to promote job creation today and expand opportunities and productivity for private business now and in the future. Among the cuts are job training programs that help unemployed workers retool their skills and become more productive in new careers. Rep. Rogers has slated job training programs for a 51 percent cut.
Similarly on the block are investments in public infrastructure called for by President Obama. Infrastructure is a critical component of a productive, efficient economy because this is the means by which the people and goods and information that make up our economy get to move around. Quality infrastructure lowers the cost of doing business and helps fertilize the ideas and innovation that drive the economy forward. These investments will not only put people back to work building infrastructure but also create demand for manufacturing and other goods and services throughout the economy.
Alas, Rep. Rogers wants to cut investments in water infrastructure by 29 percent. And he wants to zero out completely spending on high-speed rail, which will get you from A to B without a drop of gas or a security pat-down, all while stimulating high-technology manufacturing. I suppose Rep. Rogers thinks its okay to let China lead that innovation.
Rogers also plans to cut the National Institute of Standards and Technology by 20 percent, the International Trade Administration by 17 percent, Economic Development Assistance by 7 percent, and Rural Development Programs by 8 percent. What do these do? Help American manufacturers and small businesses grow, innovate, and expand into new export markets.
And I’m only scratching the surface of investments in jobs and economic growth that Rep. Rogers doesn’t want to make. He also targets NASA, the National Science Foundation, the National Institute of Health, Center for Disease Control, and the Food and Drug Administration. Without investments in these agencies, the United States would hardly have an aerospace industry, a life sciences industry, or leading health care technologies (not to mention our beloved Tang).
The glaring economic short-sightedness of the most specific House Republican deficit reduction plan yet can be seen in the case of the energy economy. As you read this column, the world stands on the precipice of an energy technology revolution that promises to revolutionize the world in the 21st Century. Will the United States lead the way toward this greener, more efficient future? Not if Rep. Rogers and his Republican colleagues have anything to say about it.
Their plan will cut the Department of Energy’s Office of Energy and Efficiency and Renewable Energy by 38 percent, the Office of Science by 21 percent, and the Office of Electricity Delivery and Energy Reliability by 26 percent. Their plans also ends $1.4 billion in DOE loan guarantees. These programs provide for basic and applied research in and incentivize commercialization of core technologies for energy systems, electric vehicles, wind and solar farms, and industrial energy efficiency.
Oh, and Rep. Rogers and his allies also want to cut the government’s Federal Buildings Fund—an attempt to put the federal government on the cutting edge of energy efficient architecture to reduce the energy costs paid by tax payers and spur commercial demand for revolutionary energy technologies. That’s bad economics in three ways because it:
- Eliminates an opportunity for the United States to become a leader in important technologies
- Means higher and less stable energy costs for U.S. businesses
- Actually costs taxpayers more in the long-run
Not making these investments today makes it all the more likely that other countries will be the ones to develop the green technologies that revolutionize the world’s energy economy in this century—not to mention to capture the jobs and business opportunities that go along with it.
The House Republican budget cuts will also make the United States subject to rising energy prices, much of it dictated by foreign markets. Maybe Rep. Rogers thinks Americans are happy paying the 15 percent increase in gasoline and oil prices in the past year? Already, 40 percent of our trade deficit is due to imported oil. Just wait until we start importing not only oil but also new energy technologies—solar panels, wind turbines, and the like—in an attempt to catch up with the rest of the world.
Supporters of Rep. Rogers’s “go deep” cuts will argue that government has no business investing in America’s economy and that we can’t afford it anyway. But business leaders strongly disagree. Andrew Liveris, CEO of Dow Chemicals, writes in his new book, Make it in America, that “the countries that are succeeding economically are…taking their future into their own hands….[their] governments are boosting business, creating a climate that attracts and rewards investment, spurs innovation and job creation.”
But for some reason the United States can’t afford to do this? The $74 billion in investments and other valuable programs Rep. Rogers and his Republican colleagues would forgo could be paid for in a snap had Congress not spent $69 billion this year giving tax cuts to the richest 2 percent of income earners, those making over $200,000. Oh, I guess that answers my question.
Adam S. Hersh is an economist at the Center for American Progress.