The sixteen-Trillion-Dollar Mistake This page intentionally left blank The sixteen-TrillionDollar Mistake How the U.S Bungled Its National Priorities from the New Deal to the Present Bruce S Jansson columbia university press new york Columbia University Press Publishers Since New York Chichester, West Sussex Copyright © Columbia University Press All rights reserved Library of Congress Cataloging-in-Publication Data Jansson, Bruce S The sixteen-trillion-dollar mistake : how the U.S bungled its national priorities from the New Deal to the present / Bruce S Jansson p cm Includes bibliographical references and index ISBN –––X (cloth) Human services—United States—Finance Government spending policy—United States United States—Appropriations and expenditures United States—Politics and government—th century I Title HV J .—dc – Casebound editions of Columbia University Press books are printed on permanent and durable acid-free paper Printed in the United States of America c To the staff and director of the Center on Budget and Policy Priorities, who courageously reform national priorities on a day-to-day basis This page intentionally left blank contents Preface ix Failed National Priorities from FDR to Clinton Roosevelt as Magician Roosevelt’s Dilemma The Conservatives’ Revenge Truman’s Nightmare Truman’s Bombshells Eisenhower’s Ambivalence and Kennedy’s Obsession Johnson’s Policy Gluttony viii Contents Nixon’s Megalomania Reagan’s Fantasies Reagan’s Gordian Knot Bush’s Myopia Clinton as Backpedaler and Counterpuncher Clinton Boxes with Reagan’s Shadow On the Magnitude of Failed National Priorities (Bruce S Jansson and Sarah-Jane Dodd) Notes Collections, Oral Histories, Interviews Bibliography Index Preface I first became interested in national priorities in the wake of Desert Storm when the press was filled with stories about a potential peace dividend My initial research on the politics of peace dividends soon expanded into a critical analysis of federal spending priorities from the presidency of Franklin Delano Roosevelt (when the United States first institutionalized a large federal budget) through the presidency of Bill Clinton I soon encountered major challenges To analyze federal spending priorities, I had to engage in multidisciplinary research that spanned military and foreign policy, social policy, tax policy, and budget policy—topics usually examined separately from one another I had to analyze the politics of spending from the perspectives of both the White House and Congress, because presidents propose budgets while Congress actually crafts budget and tax legislation I had to analyze historical budget data maintained by the Office of Management and Budget and the Congressional Budget Office to estimate the magnitude of spending and tax mistakes And I had to cover the budget politics of eleven presidencies Index Loopholes See Corporate subsidies/welfare; Tax expenditures/loopholes Lovett, Robert, MacArthur, Douglas, –, , McCain, John, , , , , , McCarthy, Eugene, McCarthy, Joseph, , McGovern, George, , , – McIntyre, Clifford, McNamara, Robert: acknowledging error of Vietnam, ; budget and management skills keeping costs lower, ; embracing game theory of cold war, ; falsely claiming cost reductions, ; “flexible response” tactic, ; hiding true costs of increasing U.S troop levels, ; lying to Congress over Maddox incident, ; overpurchase of Minutemen, ; Pentagon furious with central planning required by, ; predicting many casualties in Desert Storm, ; “proving” statistically U.S would win in Vietnam, ; tilting at military windmills, –; urging Johnson to negotiate with Soviets on missiles, Magaziner, Ira, Mahon, George, Manasco, Carter, Mann, Thomas, Mansfield, Mike, , , , , Margolis, Marjorie, Marlowe, John, Marriage penalty, Marshall, George: admired by Truman, –; advocating economic assistance to Europe to check com- munism, ; Army deputy chief of staff, –; Chief of Staff, ; cooperation with Truman Committee attempts to track military spending, ; as critic of wasteful military spending, ; insisting on money for army buildup, ; military procurement decisions under military people, ; perceived importance of logistics in WWII, ; replaced as secretary of state by Dean Acheson, –; supervising CCC camps, ; suspicion of Stalin, Marshall Plan, , – Martin, Joseph, Martin, William McChesney, Medicare/Medicaid: actual and projected expenditures for, t; appreciable increases since late s, ; to be off-budget item, –; bipartisan support in s, ; Clinton aiming surpluses at, ; as entitlement relatively immune to annual budget battles, , –; expected to rise to two thirds of federal budget, –; expenditures, per capita (–), f; filled with loopholes and exemptions, ; Johnson signing legislation for (), ; lack of health care coverage, ; as percentage of GDP, f; substantial cuts by , ; see also Health issues Meese, Edwin, , , , Michel, Robert, Military-industrial complex: Eisenhower’s warnings against, ; rooted in frantic spending for WWII, ; tentacles in every congressional district, Military spending: overview: annual Index cost of selected force options, t; and cold war “base” (–), , , , , , , f, , ; defined, ; excess, with interest on national debt (–), t; for personnel, operations, procurement, and research (–), f; recommended reforms for procurement process, ; serving some constructive non-military purposes, ; three types as percentages of total spending (–), f; three types of (–), f; see also Charts: five types of expenditures; Charts: five types of expenditures as percentages of total federal outlays; Charts: military versus domestic spending as percentages of total outlays; Nuclear weaponry/capability; Veterans’ benefits Military spending: overview of mistakes: areas of savings, ; failure to curtail pervasive culture of waste, ; failure to downsize for regional conflict response, –, –; failure to establish truly coordinated military services, ; failure to reform procurement, operations, and personnel systems, , –, –; magnitude of fiscal and tax mistakes, –, t; not cutting peaks above cold war “base,” f, , ; overinvestment in nuclear weaponry/capability, ; overinvestment in tactical nuclear forces, –; overspending on general purpose forces, –; overspending on strategic forces, –; politicians and militaryindustrial complex stumping for new threats, ; Reagan buildup as unnecessary, –; relative silence of politicians and presidents on, –; Truman’s extension of Korean War, –; versus two alternatives, f; Vietnam War, , ; wastage in supplies, services, repairs, food, fuel, travel, and maintenance, – Military spending for WWII: on airpower, –; coexisting with New Deal, –; double-digit inflation of , ; in economy of scarcity, –; expending untold treasure, –; explosive growth in –, –; FDR claiming for self-defense, –, ; funding decision faced by Congress, ; funds for naval construction from New Deal, ; “go-it-alone” mentality, overordering and hoarding, ; inadequate preparation in s, –; inefficiencies, subfiefdoms, and inter-service rivalries, –; lack of logistical and tactical foresight, ; lateness of, in U.S., –; low-cost substitute of arms sales to France and Britain, ; military-industrial complex rooted in, ; “national security state/damn the cost” mindset, ; poor weapons planning and design, ; rubber-stamped with minimal oversight, –, ; secret early planning for, –; social programs within, ; spending increases with no tax increases, –; as stimulant to economy during late s, ; Truman Committee’s attempts to track, ; warnings but few dollars for, – Index Military spending on cold war during Bush Administration, , –, –, ; “Battle of the Budget,” –; Bush’s move to increase at end of cold war, –, ; congressional resistance to base closures, , ; Desert Storm preserves budget, –; increasing after end of cold war, ; merely capped for , , and , ; peace dividend hoped for, from end of cold war, , –, –, – Military spending on cold war during Eisenhower Administration: belief that extravagant duplication yields superior technology, ; cold war “base” institutionalized at levels exceeding actual threat (–), , ; Eisenhower’s crusade against overspending, –; Eisenhower’s fear of inflation, ; Eisenhower’s warnings against military-industrial complex, ; excessive nuclear weaponry, overcharges, and chronic inefficiencies (–), , –; extravagant missile development, –; fueled by contractor’s technological innovations, –, –; overkill targeting of nuclear weapons, , , ; popular ignorance contributing to opportunities for, ; strategic nuclear forces’ five-fold increase, –; U.S in arms race against itself, Military spending on cold war during Johnson Administration: each service wanting nuclear weaponry, ; excessive funding for noncombat appropriations, ; extravagant missile development, –; extravagant overspending on nuclear weaponry, –, ; keeping waste intact, –; see also Vietnam War under Johnson Military spending on cold war during Kennedy Administration: excessive nuclear weaponry, overcharges, and chronic inefficiencies (–), , –; for game theory’s “flexible response” capability, –; Kennedy’s /-war capability, ; Kennedy’s obsession with military readiness, – Military spending on cold war during Nixon Administration: extravagant missile development, , –; McGovern offering first rethinking since beginning of cold war, , ; Nixon’s avoidance of deep cuts, protection of cold war “base,” , –, –, , ; Nixon’s disinformation, –; Nixon’s protection of cold war “base,” ; Proxmire’s “Golden Fleece Award,” ; see also Vietnam War under Nixon Military spending on cold war during Reagan Administration: congressional reluctance to staunch dollar flow to home districts, ; far surpassing Soviet spending, ; for game theory’s lethal chess, ; naval procurement’s costly procedures, corporate largesse, –; Reagan counterrevolution’s cost, –; Reagan military buildup and cold war base (–), f; Reagan oblivious to waste, ; Reagan’s staggering increases and waste in, , , , –, Index –; for six- hundred-ship navy, –, –; Star Wars, , Military spending on cold war during Truman Administration: advantages of consolidated services, –; contracts awarded noncompetitively, ; institutionalizing duplication of weapons and missions, –; interservice rivalry, –; massive mobilization for global anti-communist struggle, ; military-industrial complex and corporate largesse, ; Pentagon as giant procurement machine, ; reluctant, partial demobilization from WWII, –; retention of WWII capacity, –; vast increases recommended by NSC and military brass, – Military spending during Clinton Administration; base closings, , ; continuing need for “sufficient” force, ; failure to cut or ask basic questions, , ; feasible post—-cold war cuts, –; Pentagon claiming need for more money, ; Pentagon’s failure to provide rapid deployment capability, –; questioning need for huge forces for regional conflicts, –; threat from Russia continuing to recede, ; troops’ high quality, morale, education level, retention rate, ; U.S as global sheriff, – Mills, Wilbur, , , , Milosevic, Slobodan, , , –, Minimum wage legislation, , Missiles, missile production, and “missile gap,” , , –, Mistakes and fiscal errors: $ trillion, derivation of figure, , , , ; adverse consequences and missed opportunities overview, –; contemporary critics of, –; corporate subsidies/welfare, , –; examples overview, –, –; excessive interest payments on national debt, –; excessive pork barrel spending, –; excessive tax concessions to affluent individuals, –; magnitude of, –, t; marked increase in economic inequality from s, , ; politicians’ failure to debate or discuss, ; proposed solutions, –; undertaxation of private wealth, –; s: military inadequacy, –; s: New Deal funding inadequacy, , –, , –, ; s: WWII indifference to costs of war, –; –: failed priorities, military waste, and revenue insufficiency, –, –, , –; s-s: agriculture budget waste, ; –: military overspending, missed tradeoffs, and failed priorities, , –; s: obliviousness to social turmoil, urban growth, great migration, , , ; s: failure to fundamentally reform military procurement, ; s-s: under-requesting for escalating involvement in Vietnam, –; s: expansion of entitlements, military overspending, and failure to address jobs loss, , –; s: huge deficits placing domestic agenda on defensive, , , –; –: Index Mistakes and fiscal error (continued) failure to revise national priorities at end of cold war, –, –; –: megadeficits and unnecessarily high military spending, –; s: failure to change national priorities, , –; see also Military spending: overview of mistakes Mitchell, George, , , –, , Mitterand, Franỗois, Moldova, Mondale, Walter, Moral Majority, Morgenthau, Henry, , , , Morris, Dick, Moynihan, Daniel Patrick: calling Great Society programs ineffective, ; declaring peace dividend as DOA, –; disbelieving health care crisis, ; leaves Nixon Administration, ; as neo- conservative Democrat, ; opposing military action against Saddam Hussein, ; predicting Soviet Union would succumb to ethnic conflict, –; saying U.S should have seen Soviets were beaten by , ; as Senator, objecting to Reagan’s “New Federalism,” ; suggesting formal declaration of end to cold war, ; urging Nixon to “benign neglect” of race relations, Murray, Charles, Murray, James, – Murray, Philip, Murtha, John, Muskie, Edmund, , , Nader, Ralph, Nathan, Robert, – Nation, National priorities: aggressive internationalism, intervention in foreign countries (s), –, –; Americans finally debating guns and butter (), –; campaign finance reform linked to battle for, ; Clinton’s failure to articulate, discuss tradeoffs, ; debate impeded by political pandering and misperceptions, –; domestic agenda’s lost opportunities, ; examples of failures of, , ; extravagantly influenced by monied interests, ; failures in WWII, –; failure to revise at end of cold war, –, –, ; lack of comment by historians, ; McGovern offering first rethinking since beginning of cold war, , ; need to attack waste of national resources, –; profoundly shaped by budgets, ; relative silence of politicians and presidents on, ; see also Government spending National Security Resources Board, NATO (North Atlantic Treaty Organization), , , , , , , Neutrality Act, New Deal (entries in chronological order): domestic agenda’s unnecessary diminishment during Depression, ; funds for naval construction from NRA, ; as spending revolution, ; conservative/GOP opposition (–), –; FDR Index seeking resources (), –; keeping conservatives at bay (), –; lost opportunity of FDR’s funding strategy, –; lump-sum financing (), ; perception of, as temporary, ; political sleight-of-hand “offbudget” funding, , ; populism over revenues (), –; work relief programs, –, ; military/strategic usefulness of some projects, –, ; social programs missing from, ; rearmament plus more spending, –; insufficient taxation, ; attacks from conservatives (), ; noose tightens (), –; on budgetary back burner (), –; work relief/welfare, ; decline in unemployment (), ; domestic spending as “nonessential” to conservatives (s), –, –; demolished by conservatives by , –, –; missed opportunities, “New Democrats,” – “New Economists,” , , “New Federalism,” , – Newhouse, John, New Republic, Nimitz, Chester, , , Nitze, Paul, , , , –, –, Nixon Doctrine, Nixon, Richard M.: as ambitious, insecure, paranoid, megalomaniacal, , ; appeal to white voters’ fears and resentments, ; aspiring to lead hawks and opponents of Great Society (), ; belief in mandate for conservatism, ; as complex, enigmatic, and widely distrusted, –, ; as congressman, insisting on cuts in domestic spending (), ; cynical baiting of war opponents, ; demonizing McGovern, –; determined on activism, to leave stamp on nation’s priorities, , ; dirty campaign against Muskie, ; favoring bold domestic measures, willingness to rethink cold war maxims, , ; hawkish anticommunism, , , –; hawk posing as dove, –; initiatives to China, , , , ; mistakes in expansion of entitlements, military overspending, and failure to address jobs loss, , –; as quintessential cold warrior, ; reliance on, and fear of, Kissinger, –; revolutionized domestic spending as entitlements, , –; seeing domestic policy as integral to foreign policy, ; skill at negative tactics, putting Democrats on defensive, –, ; tactical complexity, mix of liberal and conservative, –, , ; Vietnam never acknowledged as error, ; in Vietnam, resorting to “madman tactics,” –; Watergate and resignation (), Noonan, Peggy, Norris, George, NRPR (New Religious Political Right), NSC-, as stronger restatement of Truman Doctrine, NSC (National Security Council), , Index Nuclear weaponry/capability: American, , ; American triad, ; antimissile technology, ; arms race spiraling, , ; arms talks sabotaged by Vietnam War, , –; awareness of vulnerability to distant foes, , , ; “bomber gap,” , –; Chinese, , , ; Clinton’s failure to lead in reducing, ; conventional forces equipped with, ; deterrent value, , ; Eisenhower’s preference for vast U.S superiority, , ; hydrogen bomb, ; massive retaliation versus game theory, –, ; missiles, missile production, and “missile gap,” , , –, ; overinvestment in, ; overkill capacity of U.S., , , , ; overkill capacity on both sides, ; pollution at Hanford, California, , ; reductions by Bush, –; reduction treaties signed, stockpiles reduced to levels (–), ; SAC (Strategic Air Command), –; SALT talks, , , , , , , , ; Soviet, , –, –, ; Soviet atomic bomb, , ; START talks, , , , –; U.S in arms race against itself, Nunn, Sam, , , “Off-budget” funding: of Highway Trust Fund, ; for New Deal, , –, , ; Social Security as example, Oil, , , O’Neill, Tip, , , Oppenheimer, Robert, , The Other America (Michael Harrington), Paisley, Melvin, – Panetta, Leon, , , , Patman, Wright, Patriot missiles, Patterson, Robert, Payroll taxes as funding for Social Security, , “Peace dividend”: elusive at end of Vietnam War, , , , , , –, , , –; elusive at end of WWII, –, –; hoped for, from end of cold war, , –, –, – Pepper, Claude, , Percy, Charles, Perkins, Frances, – Perle, Richard, , Perot, Ross, , , Persian Gulf War See Desert Storm Phillips, Kevin, Pinkerton, James, Pipes, Richard, Plymale, Benjamin, – Poland, , , Pork barrel spending: cuts in military budget opposed (), ; during Reagan Counterrevolution, ; examples of, ; as excessive, –; FDR veto of highway construction, ; inability of Congress to restrain, ; magnitude of fiscal and tax mistakes, –, t; naval contracts and facilities in legislators’ districts, ; public works, ; to Southern and California Democ- Index rats in s, ; Transportation Equity Act, –; as waste of resources, Porter, Roger, Post–cold war period (–): Bush taking no action in BosniaHerzegovina, ; citizen “empowerment,” –, ; civil rights legislation for disabled, ; deficits balloon again, –; Desert Storm as show-biz war, –; Desert Storm preserves military budget (), –; domestic spending capped for , , and , ; lacking empathy, vision, not really “kinder and gentler,” –; as “new world order,” –; nuclear stockpiles reduced to levels (–), ; quest for peace dividend, –, –, –; reactive decision to take no domestic initiatives, ; recession ( and ), , , ; status quo budget deal (), –; volunteerism (“thousand points of light”), Post–cold war period (–): backpedaling and counterpunching as explicit strategy (), –; backpedaling, dropping social investments (), –; blinking on military spending, –, ; budget scarcity in era of surplus (), –; demonization of China (late s), –, ; domestic program for –, ; failure to articulate, discuss tradeoffs in national priorities, ; Gingrich’s conquest (), –; politicians and military-industrial complex stumping for new threats, ; question of regional conflicts (s), –, –; reinvigoration of foreign policy team, –; runaway pork barrel spending, –; savaging of domestic spending, , ; targeting seniors in use of surplus, ; threat from Russia continuing to recede, ; U.S intervention in foreign countries as ethically questionable, ; universal health insurance coverage as “inexpensive” Rube Goldberg machine (), –; welfare reform on the cheap (), – Post–World War II period (–): attempts at full-employment bill, –; budget quandary, –, ; conservative assault on domestic spending, –, ; domestic agenda impoverished by tax cuts and Marshall Plan (–), –; domestic retrenchment by Congress, –; Fair Deal as empty era of reform, ; inadequacy of domestic agenda despite GI Bill, , ; insufficient taxation, ; phantom military, retention of capacity, –; reluctant, partial demobilization, –; social problems and domestic squalor, –; social program as symbolic only, –, –; technological innovations, , ; Truman’s -point domestic manifesto, ; veterans’ benefits, –; see also Cold war Post office, Powell, Colin, , , , , , , Index Property taxes: California’s revolt against (Prop of ), ; grassroots revolt against, in wake of depression, Proxmire, William, , n Public Citizen, Public transportation: actual and projected expenditures for, t; missed opportunities to fund, , ; see also Transportation Public works: cuts by Johnson, ; funding ignored in War on Poverty, ; Hitler’s use of, ; pork barrel spending, Racism and segregation, ; see also Civil rights Radford, Arthur, Rankin, John, Rayburn, Sam, , , , Reagan Counterrevolution: binding domestic agenda, –; deep recession (early s), , ; deficits as Gordian Knot, congressional impotence, –; disguising intentions during election campaign (), –; divide-andconquer strategy, –; freezing social investments (), –; huge cuts in corporate income taxes, ; insistence on, despite deficits, –; manipulating budget process while disguising deficits, –; naval juggernaut and six-hundred-ship navy, –, –; plan to bankrupt Soviet Union through military outspending, –; Reagan’s extraordinary deficits creating Gordion Knot for future, –, , , , ; Reagan’s hostility to poor, –; Stockman and massive cuts in social programs, – Reagan military buildup: military spending and cold war “base” (–), f Reagan, Nancy, Reagan, Ronald: anti-welfare, antiworking poor, anti-social programs, , , –, , ; assassination attempt and surge in popularity, , ; campaign deliberately kept vague and upbeat, ; campaign support from corporations and millionaires, ; as child of alcoholic, resorting to fantasy world, ; country club governorship of California, ; deficits as willfully ignorant and grotesquely irresponsible, ; demagogic, awesome communication skills, ; disinterest in boring budget details, attraction to simplicity, ; extreme conservatism, disdain for government programs, and hawkishness, –, , –; fondness for flamboyant and unnecessary naval maneuvers, ; ignoring harsh realities, , –; looking for waste in wrong places, ; lost credibility on budget issues by , ; as man untroubled by complexities, ; mistakes in huge deficits, placing domestic agenda on defensive, , , –; never emphasizing ethics with appointees or staff, ; nostalgia for an earlier, simpler era, ; oblivious to military waste, ; romantic, moral opposition to nuclear arms, Index Regan, Don, , Regional conflict response, –, – Reich, Robert, , , , Religious right, Republicans: assaults on Truman’s social programs, –, –, , –; attacking domestic spending even during Great Depression, –; Boll-Weevils, , –, , , , ; congressional impotence with Reagan’s deficits, –; Contract with America, ; debate on national priorities impeded by political pandering and misperceptions, –; disproportionately favoring affluent, ; failure to scrutinize military budgets, ; generally favoring tax loopholes, excessive military spending, pork, and deregulation, , ; Gingrich’s conquest over Clinton (), –; heartlessness of, –; insurgency controlling Congress after , ; looking for waste in wrong places, ; major setback in elections, –; moderate Democrats joining, after McGovern’s landslide loss, ; Moral Majority, ; NRPR (New Religious Political Right), ; offended by Johnson’s policies, ; opposition to New Deal, –; post-WWII tax-cutting frenzy and triumph, –, –; rarely criticizing corporate subsidies/welfare, ; white backlash against civil rights, –, ; white ethnics and southern white Protestants lured by Nixon, Revenue sharing (Nixon plan for domestic program funding): CETA (Comprehensive Employment and Training Act), ; crunch on domestic spending (), –; evading Democrat’s domestic trap, –; hard right turns ( and ), –, –; hawk posing as dove (), –; loss of manufacturing jobs overseas, , ; and “New Federalism,” , –; shootout in “Battle of the Budget” (), –; soaring unemployment (), Richards, Ann, Richardson, Bill, Ridgeway, Matthew, , Riots, , , , Rivlin, Alice, , , Robinson, C Paul, Rollins, Ed, Roosevelt, Eleanor, , , Roosevelt, Franklin D.: concentrating on war strategy, ignoring corporate profits, –; distrust of Hitler as early as , ; enamored of airpower, ; grim options for election, –; mistakes in indifference to costs of war, –; mistakes in New Deal funding inadequacy, , –, , –, ; as penny pincher during , –; Republicans’ attacks on, –; seduction of corporations for mobilization, ; silence on s social reform, –, ; squandering popularity in , ; as warrior-in-waiting, –; see also New Deal Rostenkowski, Dan, , , , Roth, William, Index Rowan, Carl, Rowe, James, Rubin, Robert, , Rudman, Warren, Rural poverty, ignoring in s, Russell, Richard, Russia, , , , , , , , ; see also Soviet Union SAC (Strategic Air Command), – Sales taxes, proposals in for, – SALT talks, , , , , , , , Samuelson, Paul, Sasser, James, Saudi Arabia, Schultze, Charles, , Scowcroft, Brent, , , , , Scud missiles, Sequestration, , , Serbia, , – Shalala, Donna, Shaposhnikov, Yevgeny, Shelby, Richard, Sherraden, Michael, Shevardnadze, Eduard, Shields, Mark, Shriver, Sargent, , , Shultz, George, Shuster, Bud, – Six-hundred-ship navy, –, – $ trillion, derivation of figure, , , , Smith, Al, Smith, Harold, , , Snyder, John, , – Social investments: actual and projected expenditures for selected, t; defined, ; expenditures, per capita (–), f; Johnson’s claims of increases in, ; neglect during Depression and WWII, –; as percentage of GDP, f; Reagan’s freezes (), –; stagnant in Reagan years, ; stagnant or in decline since late s, ; stagnating in Clinton’s term, ; see also Charts: five types of expenditures; Charts: five types of expenditures as percentages of total federal outlays Social Security: actual and projected expenditures for, t; bipartisan support in s, ; at center of partisan debate over surplus, –; Clinton aiming surpluses at, ; COLA (cost-of-living allowance), , , ; as entitlement relatively immune to annual budget battles, , , , –; expansion in s, –; expected to rise to two thirds of federal budget, –; expenditures, per capita (–), f; FDR defining these as permanent, ; insolvency by without infusion of surplus, ; marked increase since late s, ; payroll tax as funding, ; payroll tax as inequitable for low-income people, ; as percentage of GDP, f; privatization proposal, ; shifts in income and SS tax burden, factoring in inflation (–), t; in trust fund, – Somervell, Brehon, South Vietnam, , Soviet Union: anger at U.S belief of instigation of Vietnam War, ; Index Bush’s refusal of economic assistance to, –; decision not to participate in development of Marshall Plan, ; demonization of, –, ; disintegration of (), ; fear of U.S first strike from Reagan, ; Gorbachev racing against time (), –; invasion of Czechoslovakia (), ; involvement in Afghanistan, , , , ; launch of Sputnik (), ; Nixon’s detente with, ; no evidence on increased spending in response to Reagan buildup, ; as paper tiger (Part I), –; as paper tiger (Part II), –; politicians’ continual magnification of threat to U.S interests, ; powerlessness over Ho Chi Minh, ; primitive economy, ; questionable naval force, ; ripe for upheaval and dissolution in s, –; seeing themselves as nuclear underdog, ; suffering successive invasions from Europe, ; throwing in the towel., –; unlikelihood of first strike against U.S., ; unlikelihood of invasion of Europe, –, , , –; Warsaw Pact, , , ; see also Cold war Space program, Sperling, Gene, Spinney, Frank, Stagflation, Stalin, Josef: hope for rise of communism in Europe, ; legitimate interests and grievances, ; need for European buffer against invasion, –; as pragmatist, ; view of, as reincarnation of Hitler, –, ; willingness to test waters over Berlin, Starobin, Paul, START talks, , , , – Star Wars, , Stennis, John, Stephanopoulos, George, , Steuerle, Eugene, Stevenson, Adlai, , , Stimson, Henry, Stockman, David: astonishment at cumulative derivation of military budgets, ; astonishment at Democrats’ lack of opposition to domestic cuts, ; complete discussion of pork barrel spending, ; maneuvering for House vote on budget, ; as powerless quarterback for massive cuts in social programs, –; proposing large cuts in domestic budget, ; on Reagan’s deficit as “willful act of ignorance and grotesque irresponsibility,” ; as Reagan’s director of OMB, ; warning of deficits, Strauss, Lewis, Stubbing, Richard, , Supplementary Security Income, actual and projected expenditures for, t Supply-side theory, , , Symington, Stuart, , , Taber, John “Meataxe,” , Tables See Charts Taft, Robert A.: demanding cuts in Truman’s military budget, ; as Eisenhower’s hope to mollify Old Guard Republicans, ; fear of institutionalized national security state, ; his initiatives on educa Index Taft, Robert A (continued) tion and housing abandoned by fellow Republicans, –; isolated for criticizing military spending, ; likening full employment policies to “totalitarianism,” ; as quasi-isolationist, ; questioning need for large land army in Europe, ; reservations on Marshall Plan, ; spearheading tax and spending cuts, Tax cuts: achieved by Democratic strategy (), , ; Clinton’s proposals and withdrawal from, , ; by conservative House (), –; despite Truman Doctrine’s open-ended commitments, ; failure to enact, despite marked increase in economic inequality from s, , ; by Governor Reagan to corporations and affluent, ; hope for elimination of marriage penalty, ; illadvised, yet enacted to please voters, ; Johnson regretting by , , ; Johnson’s in election year (), –; Kemp-Roth legislation, ; “New Economists,” , , ; promised in Contract with America, ; promises of, and opposition to (late s), , , ; Reagan exacerbating economic inequality, ; Reagan’s belief cuts would stimulate spending cuts, ; Reagan’s insistence on, despite resulting deficits, , , , ; Republicans insisting surplus be used for, ; supply-side theory, , , Taxes as percent of GDP: at % in late s, ; –, f; –, ; s, , –; comparison of to , ; corporate, – Taxes on income: antitax tradition in America, –; capital gains tax, ; comparative percentages of GDP, ; comparison with major European countries’ rates, ; estate and gift taxes, ; excessive concessions to affluent individuals, –; limited applicability in , ; magnitude of fiscal and tax mistakes, –, t; majority exempted from (), ; majority subject to (), ; as percentages of GDP for –, f; as percentages of GDP for –, f; as percentages of GDP for s and s, ; total receipts as percentage of GDP (–), f; undertaxation of private wealth, –; withholding enacted (), ; see also Corporate income taxes Tax expenditures/loopholes: defined, ; depletion allowances, –; depreciation allowances, ; excessive concessions to affluent individuals, –; excess-profits tax, ; identified by citizens’ watchdog groups, ; as waste of resources, ; see also Corporate subsidies/welfare Tax increases: on cigarettes, ; Clinton’s on affluent, ; on energy (BTU tax), ; Gordion Knot becomes hangman’s noose for Bush, –; by Hoover, significant, , ; ignored for funding WWII, , , –, –; Johnson’s advisers advocating Index (), ; Johnson’s temporary surcharge (), , , –; Johnson struggling to avoid (), ; needed during –, ; needed for New Deal, but politically impossible, –, –, , ; overwhelming public opposition to (), –; Reagan opposing as an encouragement to government spending, disincentive to private investment, , Taylor, Maxwell, , Technological innovations, military spending fueled by, –, –, Telecommunications Act of , Thatcher, Margaret, Thayer, Paul, Thieu, Diem Bien, , Thomas, Elbert, Thompson, Fred, Tito, Josip Broz, – Tobacco, , , , Tower, John, , , , Trade unions, , , , Transportation: interstate highway system, –; see also Public transportation Transportation Equity Act, – Trickle-down economics, Truman Doctrine (), –, –, Truman, Harry S: as daring in international affairs, , ; deep distrust of Soviet intentions, ; desire for strong oversight of military, ; failure to understand Russian history, ; interest in foreign and military affairs, –; legendary frugality, , , , ; mistakes in failed priorities, military waste, and revenue insufficiency, –, –, , –; as senator, scrutiny of military-industrial complex, ; sensitized to economic desperation, ; as symbolic, frugal reformer, – Turkey, –, Turner, Stansfield, Tyson, Laura, U- spy planes, , Ukraine, , , Unemployment insurance, Unions/labor, , , , United Nations, Uzbekistan, Van Cleave, William, –, – Vandenberg, Arthur, Veterans’ benefits: cuts by FDR, –; funds already preempted for, ; GI Bill extended to Korean War vets, ; hefty increases (), ; as main ingredient of postWWII domestic agenda, –, ; as welfare state within military establishment, –; see also Charts: five types of expenditures; Charts: five types of expenditures as percentages of total federal outlays Vietnam: Ho Chi Minh, , , , ; independence from Chinese or Soviets, ; Kennedy fixating on South Vietnam, , Vietnam War: end of, and no domino effect after all, ; as ill-advised, ; as major mistake, ; military spending and cold war “base” (–), f Index Vietnam War under Johnson: bombing of North Vietnam and introduction of U.S ground forces, ; cost reductions claimed for , , and , ; escalations, –, , , ; Gulf of Tonkin Resolution (), , ; Johnson disguising true cost, –; Johnson’s pattern of no policy reports and no consultation with Congress, –; Operation Rolling Thunder (), ; polarizing Americans, ; provocative tactics with Maddox incident (), –; public outcry, antiwar demonstrations, hawks versus doves, , , , ; sabotaging U.S.-Soviet arms talks, ; Tet Offensive, Vietnam War under Nixon: end of, and hope for peace dividend, , , , , , –, , , –; evading Democrats, –; fall of South Vietnamese regime, ; hard line while secretly negotiating, ; insistence on “peace with honor,” –; “madman tactics,” –; maneuvering for ending, ; phased withdrawals, Vinson, Fred, Volcker, Paul, Von Neumann, John, Voter registration, Walesa, Lech, Wallace, George, , , Wallace, Henry, , War bonds, Warnke, Paul, , War on Poverty (–): begin- ning with cuts in domestic agenda, –; cuts by Johnson, ; disaster in elections of , ; minimal funding, ; public works funding ignored, ; role of CAAs (citizen action agencies), –, –; staff imploring Nixon for funding, ; under constant siege, Warsaw Pact, , , Waste/fraud/corruption, – Wedemeyer, Alfred, Weinberger, Caspar, , , , , , Welfare reform (), – Westmoreland, William, Wickenden, Elizabeth, Wicker, Tom, Wilensky, Gail, Williams, Mennen, Wilson, Arthur, – Wilson, Charles, Wofford, Harrison, Women’s issues, World War II: Allies’ tactical errors at huge cost, –; attack on Pearl Harbor, ; Churchill’s peripheral strategy, , ; as extraordinarily costly, ; funding with debt, –; Pacific strategy, –; postwar costs, ; technological innovations, ; see also Hitler, Adolf; Military spending for WWII; PostWorld War II period Wright, Jim, , Yeltsin, Boris, , , , Yugoslavia, – Zemin, Jiang, Zumwalt, Elmo, , , ... Congress Cataloging-in-Publication Data Jansson, Bruce S The sixteen- trillion- dollar mistake : how the U. S bungled its national priorities from the New Deal to the present / Bruce S Jansson p.. .The sixteen- Trillion- Dollar Mistake This page intentionally left blank The sixteen- TrillionDollar Mistake How the U. S Bungled Its National Priorities from the New Deal to the Present Bruce S. .. Bruce S Jansson columbia university press new york Columbia University Press Publishers Since New York Chichester, West Sussex Copyright © Columbia University Press All rights reserved