This column was written by Joseph Vranich.
According to U.S. Comptroller General David Walker, our nation is on an unsustainable financial path. To drive home his point, he recently said: "A Category 6 hurricane is threatening our shores — it's the federal budget deficit." Solutions, he warned, will require more than cutting pork-barrel-spending projects. He urged a new debate about how we want to spend and raise money.
A huge flaw in government is that its spending tends to enrich special interests while heaping debt on taxpayers. Hundreds of billions of dollars are being committed to fund new federal programs — hurricane relief and medical benefits get the most headlines — and to prop up congressional pet projects.
This year, Wall Street Journal columnist George Melloan wrote: "Congress knows it has a spending problem, just as alcoholics are aware that they have a drinking problem. The late Democratic Senator Pat Moynihan once said to Journal editors, 'It doesn't do any good for you to yell at us — we just can't help it.'"
Washington is deaf to more than yelling. It also ignores logical arguments against financing boondoggles. Let's examine just one program, Amtrak. Evidence that Amtrak is utterly dysfunctional can be found in 30 reports issued since 1997 by the Government Accountability Office, the Amtrak Reform Council, and others.
The railroad has already hemorrhaged $29 billion in federal funds and loses more money per customer than any other form of transportation. Nonetheless, senators Trent Lott (R., Miss.) and Frank Lautenberg (D., N.J.) gloss over Amtrak's failures and want to double subsidies to nearly $11.4 billion over the next six years.
Such generosity is absurd.
Consider: In the 1990s, Congress ordered the Internal Revenue Service to give Amtrak a $2.2 billion income-tax "refund" even though Amtrak never paid a penny in income taxes. Supporting the deceitful congressional action, Amtrak promised the bailout would improve its bottom line. But the reverse happened, leading critics to equate the business practices of the nearly bankrupt Amtrak with those of Enron and WorldCom.
Legislators handed liabilities to future taxpayers when in the 1980s they failed to demand reforms after Amtrak defaulted on government-backed loans. Taxpayers will be paying off a billion dollars in Amtrak-related notes until they mature on Nov. 1, 2082. This century's children will be paying most of their lives for money Amtrak burned through in the last century.
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