Ron Paul Economics: The Devil in His Details

Ron Paul Economics: The Devil in His Details

Ethan Miller/Getty Images

Herman Cain has succeeded in making “9-9-9” into one of this political season’s catchphrases, even as it comes under increasing criticism for its unintended consequences.  Ron Paul hopes to get even more traction through subtraction.  Last week, Paul released his economic proposal, titled, “Plan to Restore America.”
He might just as well have titled it the “Zero-Zip-Naught-Nada-Nothing Plan.”

Billed as the only plan that actually balances the budget, the actual highlight of the plan is what it doesn’t do, or more specifically, what Paul refuses to fund.  Paul’s plan would defund five Cabinet departments and promises to return federal spending to 2006 levels, the last full year in which a Republican Congress fully controlled the budget process. 

He’s not kidding, either. Paul’s budget draws a red line through five departments: Energy, HUD, Commerce, Interior, and Education. According to Paul’s projections, eliminating these five departments will save the U.S. just over $700 billion in the four years of his proposed presidency. Along with other deep cuts in government spending, Paul’s plan would reverse six years of spending growth and would result in a fiscal 2016 budget of just over $3 trillion and a surplus of $19 billion.

All of this sounds good to fiscal and small-government conservatives. Republicans have long discussed eliminating the Department of Education as an expensive flop, which would allow states and local communities to take more control over their schools with the withdrawal of federal mandates. Fulfilling that goal would certainly be a hit on the Right, and Paul must be thinking that eliminating even more Cabinet-level agencies will ratchet up the popularity of his plan.

However, Paul’s plan doesn’t come with any deep explanation of how to accomplish all that he proposes – or how to address the consequences.  No one would really miss the Department of Energy except subsidy-dependent companies like Solyndra or researchers who live off of federal funding to pursue innovation better left to the private sector.

Eliminating the Department of Education would be fairly simple, since state and local structures already exist to take up the slack. That might be true with HUD as well, although perhaps not in every state and county. States could coordinate the handoff with Congress if this plan came to pass.

It gets trickier with the last two agencies, however.  The Department of Interior manages vast amounts of public land, and whether one believes that the federal government should own as much acreage as it does, the need for proper stewardship at least in the short term can’t be ignored.  Even if we put every federal acre up for sale (Paul’s plan includes $40 billion in revenue from land sales over four years), we’d need to fund the management of the land until the sale could be made. Paul’s proposal would leave no funds at all for these tasks, nor does he transfer the responsibility for land management to any other agency.

The promise to eliminate the Department of Commerce is even more mystifying. For one thing, the Constitution explicitly gives the federal government jurisdiction over interstate commerce, as well as requiring a decennial census to reapportion representation in the House – a task assigned to Commerce. The department also produces data from and analysis of the national economy; analyzes weather and potential storm systems; and manages patents and trademarks – another explicit federal function in the Constitution.  Not only does Paul not explain what happens to these subsidiary responsibilities, he doesn’t explain why he thinks the Department of Commerce is illegitimate in the first place.

Nor are these the only curiosities in the Paul plan. In the tables supplied with the plan – covered by only a page of introductory text – Paul redlines all international assistance programs, as he has often promised to do.  He also redlines the Federal Aviation Administration with a note in his budget that says only, “FAA Privatized.”  That would save nearly $10 billion a year but would instantly create massive chaos in air travel. 

How exactly would Paul propose privatizing the air-traffic control system and managing the thousands of commercial flights in the air at any one time? What kind of transition would it take for airlines to create their own systems, and how much would it end up costing travelers as the carriers duplicate efforts and create communication barriers in traffic handling? Paul’s plan not only doesn’t explain that process or his end goals, but the thin amount of explanatory text never addresses the FAA conversion at all, nor does it explain Paul’s plan to defund TSA and require carriers to provide their own security.

The Paul plan has a number of such examples, some petty, some more substantial. He eliminates the supplemental nutrition programs for women and children at the Department of Agriculture, along with “Food for Peace” grants without detailing the savings realized by doing so.  Paul also proposes to reduce spending at the Food and Drug Administration by 40% from fiscal 2006 levels without explaining which functions he plans to cut. Also at HHS, the woeful Indian Health Service gets a 20% cut from fiscal  2006, as does the Centers for Disease Control. LIHEAP, the energy-assistance program for low-income earners, gets tossed out altogether. 

There may be good reasons for these reductions and eliminations, but Paul never bothers to provide any specifics in his plan, and it won’t be too difficult for Democrats to paint this entire budget as an attack on the poor.

Paul’s plan encompasses the general concepts of downsizing government, but the details show it to be short on common sense and political reality – or any kind of reality at all.  Michele Bachmann warned about the “devil in the details” of 9-9-9, but Cain at least provides an argument in his proposal for how his tax reform could work. Paul’s plan looks more like a slapdash effort to claim $1 trillion in savings –credibility be damned.