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Wednesday, July 26, 2006

Pulling on Liberal Heartstrings

Here's a new tactic in the quest for privatization of Social Security and reducing government spending generally. If we don't take care of the mounting fiscal problems, we won't be able to effectively wage the war on poverty. This is from Jim Kolbe, "the Republican chairman of the House Appropriations Subcommittee on Foreign Operations, which is responsible for US foreign aid":

Baby-boomers threaten the war on global poverty, by Jim Kolbe, Financial Times: Opponents of global poverty have reason to celebrate. The recent approval by the US Food and Drug Administration of a new, once-a-day pill against Aids could revolutionise health in developing countries. The news follows approval earlier this year of a cervical cancer vaccine, which may save more than 200,000 lives each year in poor nations.

In the US, these breakthroughs have coincided with unprecedented political support for the funding that pays for such medicines. Last year the House of Representatives passed its foreign aid bill with 393 votes, the highest tally in more than two decades. Over the past six years, the US has increased six-fold the money it spends to fight scourges such as Aids and tuberculosis abroad.

But the heights America has reached in such spending may represent the peak of foreign aid, leaving only a hard fall ahead. As the baby-boomer generation ages and begins to draw on Social Security and Medicare, the healthcare system for the over-65s, the funding needs for those programmes will skyrocket. Something else in the budget will have to make way – and America’s foreign aid programme is one of the likeliest candidates for cuts. ...

As entitlements have grown in the past two decades, the share of America’s economy going to foreign aid has been halved. Even the share devoted to national defence has declined by more than 40 per cent. It may seem strange that entitlement programmes should impede the war against global poverty, even the war against terror. But that is exactly what is happening. The un­sustainable promises that successive governments have made, primarily to older Americans, could hobble US foreign policy for decades. ...

When the US spends money to fight ... suffering it boosts its international stature immeasurably. Nothing provides as much tangible evidence of America’s moral leadership as foreign aid. But that leadership may be jeopardised by a budget increasingly on autopilot, devoted to financing the lifestyles of retired Americans. Political support for the fight against global poverty may never be higher, but the best intentions will amount to little as America’s entitlement programmes consume more and more of US resources.

Other domestic programmes, themselves squeezed by entitlement spending, will also be competing with foreign aid for scarce dollars. Those who care about the world’s poor must ask themselves: will future US congresses cut cancer research while spending more to fight malaria in Africa? Will they deny improvements in veterans’ health care to improve literacy rates in the poorest countries? Not likely. ...

To govern, as the saying goes, is to choose. But with entitlement programmes, we do not choose. These programmes do the choosing for us. They are also making the choices in US foreign policy, determining the nation’s future role as a global leader. The US has had the good sense to make foreign assistance a key priority. Now it needs the courage to keep it there.

George W. Bush, US president, has shown crucial leadership on both entitlement reform and foreign aid, but we need to be more explicit about the links between them. Above all, he has to present Americans with the trade-offs that government is making, year for year. Far more people would confront the need to rein in entitlements if they understood how they are putting our foreign aid budget in a straitjacket.

The writer is the Republican chairman of the House Appropriations Subcommittee on Foreign Operations, which is responsible for US foreign aid.

For a party that has complained so much about spending on foreign aid in the past, this new concern for world poverty is encouraging. However, setting world poverty versus "financing the lifestyles of retired Americans" is a false and misleading tradeoff designed to achieve the political goal of reducing the size of government. I don't have time to deal with this properly, so hopefully comments or other bloggers can put this into it's proper place, but the amount of foreign aid we give relative to the size of the budget, spending on the war, and so on, is miniscule, low among developed countries on a per capita basis (this says 27 billion in 2004). We can handle the current 20 -30 billion we spend on foreign aid going forward.

Update: PGL at Angry Bear has more.
Update: William Polley also has a nice follow-up.

    Posted by on Wednesday, July 26, 2006 at 12:57 PM in Budget Deficit, Economics, Politics, Social Security | Permalink  TrackBack (0)  Comments (23)

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