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Distorted Budget Brings Lard Home, Sends Pittance Abroad

Colin Gordon

Des Moines Register

October 19, 2005

[Note: This material is copyright by the Des Moines Register, and is reproduced here as a matter of "fair use" for non-commercial, educational purposes only. Any other use may require the prior approval of the Des Moines Register.]

The kind of numbers thrown around in the federal budget $50 million here, $20 billion there can be a little surreal for those of us who are not economists or members of the House Committee on Transportation and Infrastructure.

But occasionally the numbers, and the priorities behind them come into sharp focus. One such moment came last week, when the Bush administration pledged $50 million in aid to earthquake-stricken Pakistan. This is exactly the same amount of money earmarked in 2004 for construction of an indoor rain forest in Coralville, Iowa.

Now, by any measure, $50 million is a drop in the federal budget (about .002 percent of 2005 spending). But I think most would agree that it is a lot to spend on bringing tree frogs to Iowa and not a lot to spend on a natural disaster whose death toll has topped 50,000. That compares with a hurricane Katrina death toll to date of 1,300.

Unfortunately, this is typical of our budgetary priorities. In 2004, the United States spent only 0.16 percent of gross national income on foreign aid, an index of charity that placed us 21st on a list of 22 "rich" nations marginally ahead of Italy and well behind countries such as Norway, Luxembourg, and Portugal.

Our dismal record on foreign aid is well documented but not widely appreciated. In a 2001 poll, respondents pegged foreign-aid spending at 24 percent of the federal budget or about 24 times its actual level (about 1 percent). Just as troubling is the fact that boondoggles like the Iowa rain forest find it so much easier to jump the queue.

Proponents of the Iowa rain forest have floated a range of educational, environmental and economic benefits. But clearly the project's greatest virtue is its location in a state represented by a member of Congress willing and able to lard general spending bills with local pork. In this case, that's Charles Grassley, chair of the Senate Finance Committee.

The same budget round, after all, lavished $150 million on a riverfront development in Shreveport centered on a Hooters restaurant, $2 million on a golf-awareness program in St. Augustine, Fla., and without a hint of irony $500,000 on a University of Akron project ("Exercises in Hard Choices") that examines congressional budget decisions.

Such spending attracted renewed scrutiny in recent weeks, thanks to the juxtaposition of Katrina relief and a transportation bill towing a load of 6,373 local earmarks, worth almost $25 billion. A few bold members of Congress volunteered to redirect local pork to the Gulf Coast. But most, including Grassley and the rest of the Iowa delegation, fiercely defended local projects even as the Gulf Coast, Pakistan and the federal budget lay in ruins.

So it's once again a pittance for aid abroad and a carnival of waste at home. What makes that all the more troubling is the devastation on the revenue side of the ledger. As President Bush's tax cuts make landfall in the treasury, federal tax receipts as a share of the economy have fallen to their lowest level in 50 years.

The deficit for 2005 is projected at $331 billion, pre-Katrina. Most of this damage has been done by the tax cuts, a fiscal disaster in the making now costing us about $250 billion a year. But some of it has been done by local trifles like the rain forest.

With $50 million here and $50 million there, to paraphrase the late Sen. Everett Dirksen, pretty soon you're talking serious money.
COLIN GORDON is a professor of history at the University of Iowa.