2011 - %3, July

This Week in National Insecurity: July 4th Edition

| Fri Jul. 1, 2011 5:00 AM EDT

Happy (almost) birthday, America! Nothing says red, white, and blue firecrackin' love of country like a roundup of defense dementedness. Each Friday, we grab our lensatic compass, rucksack, and canteen, then mount out across the global media landscape for a quick national security recon. Whether you think our military is too damned busy—or not busy enough—here's all the ammunition you'll need, in a handy debrief.

In this installment: No to "toe shoes"! And no to tech support! But yes to ugly cars, loads of marijuana, $5 trillion wars, and coating your colleagues in "foreign substances."

The sitrep:

The government's national threat level is Elevated, or Yellow "at a heightened level of vigilance."

  • Bye bye, Bob Gates. Care for a Presidential Medal of Freedom on your way out? All outgoing defense secretaries get a medal now. (Stars & Stripes)
  • And what does the new secdef, Leon Panetta, get? A $5 trillion war on terror. A new study says that's the actual cost of the Iraq and Afghanistan wars (not the $1 trillion the Pentagon estimated last week). The report also gives an "extremely conservative" estimate of 225,000 deaths and 365,000 injuries in the wars. (Time)
  • So what are we spending all that money on? Computer systems that don't work, apparently. The Army's $2.7 billion DCGS-A network is supposed to give commanders real-time battlefield data, but "was unable to perform simple analytical tasks" and has actually helped insurgents in Iraq and Afghanistan. "There's a lot of bugs in the workflow," says one officer. Lesson learned: Computers can make chocolate rain, but they can't rebuild failed nations. (Politico)
  • But here's something the Army's unwilling to spend money on: "toe shoes" for exercising soldiers. According to a new directive from the brass: "...only those shoes that accommodate all five toes in one compartment are authorized for wear. Those shoes that feature five separate, individual compartments for the toes, detract from a professional military image and are prohibited" during workouts. (Washington Post)

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We're Still at War: Photo of the Day for July 1, 2011

Fri Jul. 1, 2011 5:00 AM EDT

Soldiers from Company C, 1st Battalion, 506th Infantry Regiment, 4th Brigade Combat Team, 101st Airborne Division, Task Force Currahee, pull security from the top of a mountain in Paktika province during Operation Surak Basta III on June 23. Photo via US Army.

To Frack or Not to Frack?

| Fri Jul. 1, 2011 5:00 AM EDT

It's been a busy week for anyone following the national debates over hydraulic fracturing, or "fracking," the controversial method used to cut into shale rock to extract natural gas. In New Jersey, a strong bipartisan majority in both chambers of the legislature approved a bill banning fracking in the state as its neighbor to the north, New York, appeared ready to end its moratorium on the practice.

The New York Times reported Thursday that on July 1, New York Gov. Andrew Cuomo is expected to lift a fracking moratorium, which former Gov. David Patterson issued in an executive order last December amid concerns that the use of a high-pressure mixture of chemicals and water used to tap the rock could lead to groundwater contamination. While it was described in press accounts as Cuomo "lifting" the ban, he's actually just letting the ban expire; it was temporary anyway, and was put in place while the state awaited the results of an environmental review, as ProPublica explains.

The state's Department of Environmental Conservation intends to issue a draft environmental review with recommendations on how to proceed to the governor on Friday. In its press release, the DEC indicated that it will recommend that high-volume fracking be banned in the New York City and Syracuse watersheds, within primary aquifers and 500 feet of their boundaries, and on state-owned land—which still leaves about 85 percent of the state's land open to fracking. There will be a 60-day public comment period beginning in August, so it will be months before fracking could actually proceed in the state.

Environmental groups aren't likely to take kindly to the proposed rules, as it still leaves much of the Marcellus Shale open for fracking. "It seems like there's an attempt to carve up the state, sparing certain places while turning others into sacrifice zone," said Claire Sandberg, executive director of Frack Action in New Paltz, NY. "We want to see a full and permanent state-wide ban."

New York, which sits on a significant portion of the Marcellus Shale, has been ground zero for debates over fracking. New Jersey, though, hasn't seen the rush to development. A portion of the northwestern part of the state lies on the Utica Shale, which is deeper than the Marcellus and not a target for natural gas developers at this point (though it could possibly be of interest in the future). This makes Wednesday's vote in New Jersey largely a symbolic move, but its sponsors hope it resonates in neighboring states. "We want to send a strong message that we don't want to poison our drinking water," said Assemblywoman Connie Wagner (D), who sponsored the bill in the Assembly.

The bill passed by large margins in both chambers: 32-1 in the Senate and 56-11 in the Assembly. It also had pretty strong support accross party lines. "It's a terrible practice, which has great potential to do irreparable harm to the water supply system," said State Sen. Christopher "Kip" Bateman, a Republican who cosponsored the measure. "It's a practice that should be outright banned nationwide."

Bateman couldn't say whether Gov. Christie is going to sign the bill into law. If he does, New Jersey would become the first state in the country to formally ban the practice. "If he's smart he'll sign it," said Bateman.

Getting a Handle on Tax Expenditures

| Fri Jul. 1, 2011 12:53 AM EDT

"Tax expenditures" are special deductions, exclusions, exemptions, and credits in the tax code — basically ways of spending money by reducing taxes instead of directly funding a federal program. In the current issue of the Washington Monthly, Suzanne Mettler says we should cut them way back:

The broader goals of progressive politics are undermined by tax expenditures. Reducing them is a goal we should embrace. The problems start with their redistributive impact.

Most Americans assume that U.S. government social programs aid primarily the poor and the middle class, but tax expenditures generally shower their most generous benefits on those in the upper reaches of the income spectrum. To be sure, there are exceptions—most notably the EITC, which genuinely aids the working poor, and Clinton’s HOPE credit, which targeted the middle class. But in the main, such policies are upwardly redistributive, despite rhetoric to the contrary....In 2004, 69 percent of the benefits of America’s home mortgage interest deduction were claimed by households with incomes of $100,000 or above—the top 15 percent of the income distribution. That same group also reaped 55 percent of the benefits emanating from the tax-free status of retirement benefits and 30 percent of those from employer-provided health benefits.

OK, I'm sold. For the most part, tax expenditures are lousy policy, they hide the actual size of government programs, they're poorly targeted, and they create intractable political problems. Still, you know what I'd like to understand first? Just how big a problem are they? Here are three different estimates:

  • Based on figures from the Center for American Progress, I estimated a few weeks ago that tax expenditures had decreased from 8.1% of GDP to 7.0% of GDP between 1982 and 2010.
  • Mettler says tax expenditures have grown from 4.2% of GDP to 7.4% of GDP between 1976 and 2008.
  • The Congressional Research Service says tax expenditures have grown from about 5.8% of GDP to 7.2% of GDP between 1974 and 2011.

I'm guessing that the CRS numbers are pretty reliable, and their recent report includes a chart that shows the entire tax expenditure picture instead of cherry picking just a couple of years. Here it is:

Like I said, I think there are lots of good reasons to reduce tax expenditures. At the same time, this chart doesn't really suggest that they're some kind of skyrocketing, out-of-control problem. There was a big rise in tax expenditures in the early 80s that was reined in by the 1986 Tax Reform Act, and aside from that temporary bump they've held pretty steady for the past four decades aside from a modest increase as a result of the two Bush tax cuts. If we just let the Bush tax cuts expire, we'd be back to 1974 levels.

So go ahead and whack 'em. But take with a grain of salt any suggestion that tax expenditures have been soaring in recent decades. Most of the big ones have been around since World War II or longer and they've been hanging around ever since.