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Caroline Baum: Pork for me, scraps for you: bad incentives for lawmakers

By Caroline Baum

Bloomberg News

Published: Saturday, Oct. 30 2010 12:00 a.m. MDT

House Minority Leader John Boehner rails against government spending yet votes for a $485 million appropriation for the F-35 Joint Strike Fighter's alternative engine, which the Pentagon wants to kill. Boehner's district is near the General Electric plant that's building the engine.

Congressman Earl Pomeroy, Democrat of North Dakota, is a member of the fiscally conservative Blue Dog Coalition. He got an "F" on his 2009 report card from the National Taxpayers' Union, which ranks members on the restraint they exercise in the areas of taxing and spending.

That lawmakers stand for one thing and vote for another isn't necessarily a reflection of a split personality or a duplicitous nature. They're just doing what the budget process incentivizes them to do.

Let me explain.

The framers of the U.S. Constitution devised a system of government known as representative democracy. We elect individuals to represent our interests in Congress.

The House of Representatives is known as the "People's House" for two reasons. First, it was the only arm of government to be elected directly by the people until the 17th Amendment, ratified in 1913, made the Senate a directly elected body. Second, members represent small districts and must face voters every other year to "renew" their membership. All spending bills must originate in the House, according to the Constitution.

Newly elected representatives may come to Washington with high ideals and lofty principles. Then they're confronted with a big pool of money that's there for the taking. If they don't claim it, someone else will. In this world, thrift isn't a virtue. The meek don't inherit anything. The only question is which districts will win the jackpot.

Economist John Cogan, a senior fellow at the Hoover Institution and professor of public policy at Stanford University, sees the budget process as an illustration of the "Tragedy of the Commons," a concept first enunciated by biologist Garrett Hardin in a 1968 essay published in Science magazine.

Hardin showed how individuals, acting in their own self- interest, will deplete a commonly owned resource — a forest or grazing land, for example — even if it's in everyone's long- term self-interest to preserve it. "Freedom in a commons brings ruin to all," Hardin wrote.

Two decades ago, Cogan looked at the history of government spending and the budget process and found "the powerful role the commons problem played in producing deficits."

A centralized process, with spending authority concentrated in a single committee in each House, produced balanced budgets during the first 90 years of U.S. history except during periods of war and recession. Decentralized budgeting by numerous authorizing committees proved to be a ticket for deficit spending, on average, from 1886-1921 and 1932 until now.

Various measures have been introduced over the years to impose some accountability on the budget process. "Unfortunately, the committee itself was the accountant," Cogan said in a telephone interview last week.

The Congressional Budget Act of 1974 required the House and Senate Budget Committees to draft a budget resolution to serve as a spending blueprint. The resolution is non-binding.

Paygo, requiring offsetting cuts for any new entitlement spending, was introduced in the 1990s and allowed to lapse.

The current Democratic Congress passed Paygo, proceeded to ignore it and never got around to passing a budget resolution. So much for attempts at accountability.

The only solution, according to Cogan, is to centralize the budget process. (Yes, this is a conservative talking.) The way things now stand, no one decides the total amount of money the government will spend. Under the current system, lawmakers aren't doing their job — they aren't "representing" their constituents — if they don't make a claim on the community till.

Tea Party candidates who ride into Washington on a wave of anti-incumbent fervor will face the same skewed spending incentives as their predecessors. In their zeal to represent the common man, they may just compound the common tragedy.

Caroline Baum, author of "Just What I Said," is a Bloomberg News columnist. E-mail: cabaum@bloomberg.net

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