Sacrificing Your Isaacs

Sorry for the long silence. Busy couple of weeks and a stretch where I just felt impossibly fatigued.
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I’ve been thinking a lot about the politics of budgets, a Gordian knot if there ever was one. Whether we’re talking something as huge in scale and significance as the federal government’s budget or something as local as your own university’s budget (or maybe your family budget, in fact), there are some common obstacles to making any progress when adjustments are necessary.

The first problem is simple literacy. There’s a budget committee at Swarthmore which includes faculty. Faculty on the committee commonly point out that there isn’t really anything to be decided by the committee, that the meaningful decisions are made elsewhere. That’s true, but I’ve always seen the committee as having a primarily educative purpose anyway, to show faculty how the budgetary sausage gets made. (Not all of it: we don’t tend to see the really fine-grained budgetary information that governs daily operation of various departments and units within the college.) The basic thing you learn is that most of the budget is set by fixed costs, and making significant savings takes cutting into fixed costs somewhere.

I suspect most institutional and governmental budgets present in this fashion. Moving a program or project into long-term fixed costs is the best way to safeguard that commitment if you believe in it or you are a beneficiary of it.

On the flip side of this insight, if you’re listening to someone present as a budget hawk or an advocate of a leaner, smaller operation and they don’t talk about giving up on some significant current commitments, with a full sympathetic accounting of the consequences of that decision, ignore them. Someone who talks about making up big savings from efficiency or cutting waste is usually full of it. Yes, in the good times, institutions and governments can get careless with their budgetary commitments, and in the lean times, that generosity of spirit fades fast and reaps a certain amount of the excess that resulted. (Too bad, sometimes, because that’s often how interesting blue-sky projects get a chance to come to life when they might not otherwise.) “Waste”, however you understand it, is just never going to get a budget that has major deficits back into line.

Let’s suppose you’re a federal bureaucrat or U.S. politician genuinely concerned with fiscal responsibility. It’s hard to pursue that concern if you’re surrounded by folks whose use of budgetary rhetoric is at best illiterate about the realities of revenue and expenditure and is (more likely) thoroughly insincere, a phony justification for squashing other people’s projects and ideals. Nobody wants to go to the effort to run a tight ship in their own area of responsibility while watching other managers get a blank check, especially if profligate department heads and their political allies are just going to snatch still further from the tight-ship operator.

I suppose there’s no point in suggesting to your average Tea-Partying devotee of “small government” that they’re either playing a con on other people or having one played on them. But on the off chance that some of the people who talk about budgetary rectitude are remotely serious about it, here’s what I think the basic litmus tests for the fiscally responsible ought to be.

1. Know the consequences of the cuts you recommend, take them seriously, and plan for them. I don’t care how trivial or excessive a budget item might sound like: someone out there has planned their future around that allocation. If you subsidize the shearing of merino sheep, there are shearers and sellers and sheep-owners who inhabit the new economic niche you’ve created. That doesn’t mean that’s an obligation in perpetuity, but someone who just ridicules budgets is someone who isn’t serious about cutting them. This is one reason at the governmental level why serious budget-cutting in a recession is a very dumb thing to do.

2. Everything is notionally on the table. This does not mean that when a budget has to contract, it should contract evenly. Advocating an across-the-board freeze (effectively an even contraction) was one of John McCain’s sillier moments in the 2008 campaign. Just as some commitments warrant more money than others, and each new budget commitment has to make an independent case for its merits, you have to do the same discretionary judgment when you cut a budget. However, a budget-cutter who doesn’t put their own favorite projects and commitments on the table and rethink them backwards and forwards isn’t a serious budget-cutter. That’s where a serious budget-cutter should start: with a tough, skeptical look at the commitments they’re inclined to believe are the most important. If you’re a typical U.S. conservative looking at the federal budget, start with the military, with crime enforcement, and so on. Anyone who ever advocated military action in Iraq or Afghanistan who took little to no interest in the benefit-to-cost assessment of that action is someone who should shut the hell up about small government or fiscal responsibility now.

2a. Don’t lie to yourself or others about your own interests. Some of the most conservative Congressional districts in this country are big net recipients of governmental money. Some of the most ardent Tea Party devotees I’ve talked to are the beneficiaries of a whole range of government expenditures. (And yes, this happens on the other ideological side just as much.) This kind of disassociation gets even worse in smaller institutional settings. It’s impossible to make progress in a budgetary negotiation when one constituency’s interests are accounted in entirely selfless, idealistic terms while another constituency is painted as just protecting their own interests.

3. Don’t be stupid about revenue. Especially don’t ever make a budget where expected future revenues based on a highly theoretical projection will make or break current budgetary obligations. Especially don’t cut into current revenues before you envision budget cuts to match–and justify doing both things simultaneously.

4. The underlying logic of cost-to-benefit arguments should be made as philosophically clear and coherent as possible. It doesn’t have to be consistent across an entire institutional or governmental budget: you can have heterogenous ideas about cost-to-benefit supporting different kinds of commitments. But no player should ever get a free pass to Go to collect $200 if they aren’t able to transparently and clearly account for how they convert all resources given to them into value or benefit for the institution they’re a part of, and how that conversion takes place at the most favorable ratio possible.