Wednesday, December 17, 2014 Kislev 25, 5775

Government 'Gifts' Are Not Free

October 8, 2008 By:
Jonathan S. Tobin
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Americans have reacted to the collapse of Wall Street and the subsequent massive federal bailout with a mixture of numb incomprehension and resentment.

Wall Street is rightly excoriated for its failures and misdeeds. So, too, is the Bush administration which, as with everything else that was amiss in the last eight years, was unprepared to deal with the crisis. And, just as culpable, is the Congress that failed in its oversight capacity to avert the mortgage crisis, and then dithered as panic spread.

But before the show-trial hearings start -- which will allow grandstanding members of Congress to throw stones at every wrongdoer but themselves -- it might be a good idea for the entire country to do a little accounting of its own.

Though predatory lenders, Wall Street CEOs and members of Congress

who fiddled and took campaign contributions while the economy burned are certainly worthy of our scorn, the broader problem goes beyond the collapse of Fannie and Freddie and the Lehman Brothers. Our enormous deficits, foreign trade imbalances and dependence on investments from unsavory customers, such as China, have put us on thin ice.

More Than Greed
The lack of savings and an unwillingness to curb spending have made America a country living on margin. The belief that anyone, including those not able to pay, should be given mortgages may have been exploited by the unscrupulous. But its root cause was not so much the "greed" about which both national tickets have been yelling as much as it was a national spending spree in which accountability was forgotten by everyone. Until we learn to live within our means, our troubles won't disappear. The era of government-subsidized free lunches is over.

But are they? If the only real result of these disasters is an orgy of finger-pointing at Wall Street and a resurgence of redistributionist tax policy, little will change. What is needed is reform that will restrain a national legislature that not only failed to exercise its responsibility to regulate the system, but also added to the problem with its own out-of-control spending.

One of the recurring themes of recent scandals has been the use of Congressional earmarks to loot the Treasury. These goodies doled out by members of Congress have played a significant role in creating our deficit society. Though a fraction of the federal budget, they are important symbols of the way the system has been crafted to shift power away from the taxpayers into the hands of the political class.

Earmarks are spending amendments attached to legislation through which lawmakers are able to funnel millions from the federal coffers, often without putting their names to the bill. While the crimes of convicted lobbyist Jack Abramoff and his Congressional Republican errand boys were the most-egregious examples of this scam, it was the system they gamed, rather than the few instances for which he was prosecuted, that is the country's real problem. The real scandal is a system that siphons enormous funds into Washington and then allows Congress to give back a tiny percentage of that money to us in the form of earmarks. For these services, they reap campaign contributions and applause.

It is true that not every earmark is the equivalent of Alaska's "Bridge to Nowhere" and other boondoggles. Many bring help to their constituents. But make no mistake. Even in the cases of those senators and representatives who excel at bringing the "pork" to their states and districts, these presents from Capitol Hill are doled out with an eyedropper. They are not free; they are paid for out of our tax dollars, and are not a gift from a Heavenly treasury. Even more to the point, they serve the senders more than the recipients. Earmarks may be sold as constituent service, but they are the instruments of raw political power that make every incumbent a formidable patronage and campaign fundraising machine.

The politician most willing to talk about stopping earmarks right now is Republican presidential candidate John McCain. His Democratic opponent Barrack Obama isn't too comfortable with them, either. But unlike McCain, Obama won't vow to veto any bill with earmarks.

This difference has led some Jewish Democrats to weigh in on the matter and to claim that McCain's absolutism on earmarks would be fatal to Israel and a body blow to Jewish social service agencies. They believe earmarks should be defended to the last ditch, because they have been used to good effect by Jewish philanthropies and the pro-Israel community.

That is certainly true, though it must be pointed out that even the vaunted "Israel lobby" is a sideshow in a system in which giants like the agriculture, oil and pharmaceutical industries are the big players. And compared to the billions thrown away on ethanol and other farm subsidies, the crumbs tossed onto the pavement for faith-based charities to gobble up are peanuts.

Yet, faced with the possibility that the tradition of decorating spending bills with earmarks like Christmas trees might be terminated, the lobbyists and their congressional business partners are screaming bloody murder.

Dangerous Leverage
The fact that some of the congressional spoils are given to good causes is no reason to keep in place a system that is inherently rotten. It also does Israel, a nation that can count on the affection of the overwhelming majority of Americans, no favor to identify it with a system that honest citizens despise.

In addition, Israelis know that sooner or later the Jewish State must wean itself from dependence on American aid. Such support has had a demoralizing effect on Israel's own political culture, as it is used to subsidize an unaccountable system living on free money. Even worse, it gives Washington leverage over Jerusalem on issues of national survival that might be exploited one day by a less-friendly administration than the present one.

As for the fate of Jewish social welfare organizations, there is no denying that, like those operated by other faiths, they have become utterly dependent on the government. But the idea that they will be destroyed by reform is unfounded. Worthy causes can still thrive in an environment that prizes transparency. They need not always be the playthings of congressional power brokers.

If the Wall Street meltdown can help give the next president an opening to curb the legalized theft and patronage that is aided by earmarks, then at least some good will come from this misery.

But, if they continue in place and, as is now possible, we return to a situation where one party controls both ends of Pennsylvania Avenue, the looting will return with a vengeance. Either way, now is not the time for Jews or any other group to leap to the defense of an indefensible system.

Contact Jonathan S. Tobin via e-mail at: jtobin@jewishexponent .com.


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