June 20, 2006 | By Nathaniel Ward

How to control spending

Brian Riedl, Heritage's Hermann Fellow,has been a strong advocate of sane spending policies in the nation's capital.

For months now, Congressional leaders have been talking about their commitment to fiscal restraint. They’ve now scheduled time to debate real measures to get federal spending under control. Just in time for the debate, Heritage’s Grover Hermann Fellow, Brian Riedl, has outlined several realistic proposals, including these three important reforms:

• “Enact government-wide statutory spending caps that force lawmakers to set priorities and make trade-offs. These caps should apply to both entitlement and discretionary spending.”
• “Begin measuring the federal government’s long-term unfunded obligations, particularly in Social Security and Medicare,” thereby applying to government the same accounting rules businesses have to follow. And Congress should be blocked from adding to these unfunded obligations.
• Close the “plethora of loopholes” in the budget rules that allow Congress to bypass nearly all restraints now on the books.

There’s already been some progress on real spending reform in the Senate. As Riedl explains in a separate paper, “The Stop Over-Spending (S.O.S.) Act, authored by Senate Budget Committee Chairman Judd Gregg (R-NH) and cosponsored by over a dozen senators, provides a strong blueprint for building a budget process that reflects America’s budget priorities.” This bill includes a number of important measures, which Riedl says provide “a strong blueprint for lawmakers ready to confront the greatest economic challenge of our era”:

• Restoration of caps on discretionary spending like those that governed Congressional spending from 1990 to 2002. Riedl recently told National Review’s Rich Lowry that if spending under President Bush increased at the rate it did under President Clinton, we’d have a surplus today.
• Automatic reconciliation for all spending, including entitlements, if deficit reduction targets are not met. This way, Congress would be compelled to address runaway entitlement spending when considering cuts.
• Establishment of commissions to review and propose elimination of wasteful, duplicative and outdated programs and to review the solvency of entitlements.
• Creation of a legislative line-item veto to allow the President to force Congress to vote on rescission requests. The President would be allowed to use this veto four times in a year.
• Implementation of several other important reforms, including biennial budgeting, when budgets are prepared for two years instead of one, and caps on entitlement expansion.

With federal spending at record levels, it’s high time Congress did something about it. Heritage will be working closely with both Congress and the White House during this important debate to help ensure they do the right thing.

• Tell five of your friends about the important debate in Congress
• Get involved in the fight for spending control

North Korea gets feisty

North Korea has recently begun preparations to launch a new missile, one possibly capable of reaching the United States. While there have been conflicting reports about whether a launch is imminent—some reports say the missile is not yet fueled, while bad weather may postpone things in any case—these aggressive moves have drawn a rebuke from several countries.

“This action is in violation of North Korea’s international agreements and appears designed to goad the United States into direct bilateral talks,” Heritage’s Balbina Hwang writes. “The U.S. must not take the bait. No good will come from rewarding North Korea for its belligerent behavior.”

“It would be a very serious matter and, indeed, a provocative act should North Korea decide to launch that missile,” Secretary of State Condoleezza Rice said yesterday. French Prime Minister Dominique de Villepin agreed that a North Korean launch should prompt a “firm and just” response. Even the United Nations Secretary-General, Kofi Annan, advised North Korea to “listen to and hear what the world is saying.”

But North Korea has a nasty habit of ignoring the rest of the world on these matters, and it wouldn’t be too much of a shock if they went ahead with their missile launch. In this scenario, Hwang writes, “a military option – such as shooting down the North Korean missile with responding interceptors – should be kept on the table.”

It’s a good thing the United States has a missile defense system in place for exactly this sort of contingency. Heritage pushed for just such an interceptor system for more than two decades, and our efforts have borne fruit in the last five years. And none too soon, it seems: the military just activated the system in response to the Korean threat.

In other news

• The bodies of two American soldiers who were captured and “killed in a barbaric way” by terrorists have been recovered, Iraqi and American officials confirmed.
• The space shuttle Discovery is set to launch on July 1 in what would be the shuttle program's second flight since the Columbia disaster in 2003. In a quarter-century of operation, the shuttle has failed to live up to prior billing as a cheap and reliable launch vehicle, and it has a less-than-perfect safety record, with two crashes in 120 voyages. Shuttle backers defend the program’s gargantuan annual price tag by noting that the shuttle services the as-yet-incomplete International Space Station, which may cost upwards of $100 billion to finish. But even NASA officials now admit that the shuttle and station programs were mistakes.
• If Britain’s left-wing Chancellor of the Exchequer, Gordon Brown, is to be believed, Adam Smith was not an early devotee of free enterprise but was really a believer in the modern European-style welfare state. This is, of course, nonsense, and Eamonn Butler of Britain's Adam Smith Institute sets the record straight.
• The AFL-CIO labor union, apparently trying to stir up “class warfare,” is running a competition where workers can submit horror stories about “oppressive” managers.
• Katharine Jefferts Schori was elected over the weekend to lead the Episcopal Church. AFP describes the first woman to serve in the position as “a member of the US Episcopal Church’s liberal majority,” and notes that her radical views could lead to potential conflicts with other branches of the Anglican Church.

Coming up at Heritage

To attend these or any other Heritage Foundation events, RSVP at Heritage’s events website. Or you can watch these events live online at Heritage.org. All times are Eastern.

• On Thursday, June 22 at noon, author and psychologist Carrie A. Miles joins Charmaine Yoest of the Family Research Council to lay out a case for marriage and family that transcends shifting economic patterns and social trends.
• On Friday, June 23 at 10:00am, Secretary of Homeland Security Michael Chertoff and the producers and cast of Fox’s 24 discuss the public perception of counter-terrorism during a panel moderated by radio host Rush Limbaugh. Watch this event live on MyHeritage.org on Friday at 10:00am.
• On Tuesday, June 27 at noon, Rep. Tom Feeney (R-FL) and AEI’s Alex Pollock join Heritage’s David John to discuss America’s reduced role in financial leadership and how the onerous restrictions of the Sarbanes-Oxley Act contributed to this change.

Nathaniel Ward is the Editor of MyHeritage.org—a website for members and supporters of The Heritage Foundation.

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