Budgets Are Not Moral Documents

 

Today is a sort of holiday among many Congressional, White House, and Agency staffers. Today is budget day — the day the Presidents sends his version of budget to Congress. Presidential Budgets can have no meaning depending on who controls Congress. Presidents do not sign the Budget, assuming Congress actually passes one. The Senate hasn’t really passed a budget since I started working there, over 1,000 days ago. (The Budget Control Act doesn’t count.)

Last week, my State Delegate, David Englin who is a really responsive and thoughtful elected official, sent out his periodic campaign e-newsletter. While I cannot say that he and I agree on the majority of issues, his office is really well run.

Delegate Englin is a smart guy, having attended the Air Force Academy and Harvard.  However, I must take issue with one of his recent Richmond Reports that was titled: “Budgets are moral documents, so let’s put pragmatism over ideology.”

First off, I profoundly disagree with his contention that budget are moral documents. This phrase is an often repeated mantra by Democrats, the recent frequency of its use is based on a Paul Begala quote from the Washington Post.  In short, it is a rhetorical debate trick used to paint those who don’t agree with those that use it as “immoral.” It usually is used as cheap political trickery. It is something they teach at Progressive seminars.  This is a tactic, not a principle. It is “Holier Than Thou” at its worst.

The key to this phrase, and the reason why Democrats love to use it (and variants of it) is because it compels you to accept its premise. Once you have done that, it is hard to escape what proponents call solutions without violating what they believe are morals. So, it’s best to be up front when people use it. No, budgets are not moral documents.

Delegate Englin has it backwards: People who view budgets as moral documents put ideology over pragmatism.

To test this theory, let’s apply it to other things.

First, a family:

“Daddy, I want to play on the Lacrosse team.” “Daddy, I want to take piano lessons.” “Daddy, I want a new car.” “Daddy, I want to go to George Washington University.” “Honey, the mortgage is due.” “Honey, the car payment is due.” “Our property taxes went up, how will we account for those?”

You cannot please everyone all of the time. In families, like governments, there are more wants than there are means to fund them. Sometimes kids want non-essential things, like lacrosse equipment or new cars, and they get them. Other times, they don’t. Sometimes kids want things they think are essential, but are not. They think it’s unfair, sometimes immoral if they don’t get them.  And regrettably, sometimes families cannot cover the essentials.  Bills and taxes, food, and shelter, these things take priority in varying order. Other than that, the budget is pretty much discretionary.  Family budgets are not moral documents.

Second, a small business:

“I’d like a raise.” “I’d like my wages to be indexed for inflation.” “My union demands that we pay less for health-care.” “I’d like to work fewer hours for the same wage.” “I would like more vacation days.” “I would like the cost of your products to be lower.”

Some of those asks are reasonable. Who doesn’t want to be paid more? Who doesn’t want lower health-care costs? Who doesn’t want to work long hours. Businesses are a more complicated than family budgets, given that there are regulations, unions, and other things that limit the ability of businesses to plan their expenditures in the way they think is  best. But, the same principle applies here: companies do not have the income to meet all of the demands of its workers, clients, and customers. Budgets change much more rapidly in small businesses. Demands are met only after the essentials are covered. Many demands are left unmet.

Governments, however, are the worst culprits when it comes to pragmatic budgeting. Even the States are bad at it, and most of them have balanced budget amendments. But, unlike the Federal government, which has no competitor unless you renounce your citizenship and move elsewhere, states have competitors.

People move all of the time. Especially in areas like Washington, D.C. where you have not one but four choices of places to live. The District of Colombia has horrible schools, Maryland has high taxes (that are going to get even higher), West Virginia is a nightmare of a commute. And then there’s Virginia.

Virginia stands out among the other states. The question I ask is not whether Virginia could spend more money on the priorities Del. Englin believes are important, rather, should it?

Budgets are not moral documents, they are merely a tabulation of how much we spend on various programs. True, budgets “reflect our priorities” but our priorities change all of the time. Does that mean our morals change? Certainly not.

What is more important that how much we spend, is how much we get for what we spend. There is not a definitive 1:1 correlation, positive or negative, with spending and outcomes. Put another way, there is not guarantee that you get 1 unit more of outcome for 1 unit of higher expenditures. Similarly, if you spend 1 unit less, you don’t always get 1 unit less of an outcome. It varies wildly.

This is one of the biggest shams exhibited in the public policy arena: “More money = more outcome.” Sadly, many naive people believe it. Even some smart ones.

For a quick example, just take a look at education spending in our region. DC is #2 in the nation in education spending, spending about $16,000 per pupil. Maryland is second at about $13,000 per pupil. Virginia spends a little under $11,000 and West Virginia is slightly below the national average at about $10,000 and change.

Seems to me that, if $ = outcome, DC should have the highest amount of outcome. Let’s say the highest percentage of its students graduating. Let’s be honest, we all know that D.C. ranks last among those four.

Clearly, if DC just mustered up some more morality (read: money) and pours more money into their education budget, they’ll improve, right? Wrong.

President Bush roughly tripled the amount of money for AIDS prevention (called PEPFAR) in Africa. Did we get 3 times better results? We did not.

That’s the problem. Once you’ve accepted that premise, then you get stuck in their framed debate. Sadly, many policymakers of both parties get fooled into believing that budgets are moral documents. They aren’t. And I don’t blame them for using it, since it is a good debate tactic. However, it is fatally flawed reasoning.

Rather than focusing on line items as tenets of a budgetary moral faith, we should care more about outcomes, not outlays.

 

 

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