Last week, Ben Armbruster noted that a slew of Republicans say that they want to cut federal spending, but when pressed for specifics, can’t come up with anything tangible to cut. One of these is Carly Fiorina, the Republican senate nominee in California, who was asked on CNBC last week to identify a specific spending cut that she would like to see, and only called for a spending freeze at 2008 levels.
Fiorina recently sat down for a nearly hour-long interview with the San Fransisco Chronicle editorial board, where she was asked the same question and at first provided the same answer. However, unlike CNBC’s Larry Kudlow, the Chronicle’s board pushed Fiorina further, asking for a tangible, specific cut that she would make. All that Fiorina could come up with, after a lengthy silence, is the newly created Consumer Financial Protection Bureau:
Q: Can’t you name some areas that you’d like to cut, some programs?
FIORINA: Sure. [pause] When you have, let’s just look at this financial regulatory reform bill as an example of an opportunity missed. What happened? We had 20 plus agencies who were responsible in some way for overseeing Wall Street and preventing Bernie Madoff. They all failed. They all failed. There is overlap, there is redundancy, there are gaps in their portfolios, and by the way, they cost a lot of money. And instead of dealing with that, instead of saying we need to have a more rigorous, accountable, and streamlined regulatory scheme, what did we do?…We’re going to create another one, called the Consumer Protection Agency, and we now have literally hundreds of regulations that are going to have to be written by thousands of bureaucrats. Wrong approach.
There are a couple of problems here. First, Fiorina is incorrect that no agencies were dissolved as a result of the Dodd-Frank financial regulatory reform bill. In fact, the Office of Thrift Supervision, which everyone agreed was an abysmal failure, will be absorbed into the Office of the Comptroller of the Currency. Second, Fiorina implies that she would defund the Consumer Financial Protection Bureau, but the CFPB is funded out of the Federal Reserve budget and is not subject to Congressional appropriations.
Even if the CFPB’s budget were overseen by Congress, it hasn’t been set up yet, so it isn’t having a budgetary impact at the moment. Fiorina didn’t name any current spending that she would cut, but future spending from a source over which the Senate has no jurisdiction.
But this is emblematic of the conservative approach to budgeting. The one specific thing that Fiorina can identify to cut, in a $3 trillion federal budget, is $500 million for the only regulatory agency whose sole purpose is to protect consumers from the excesses of the financial services industry. Besides that, all she can do is resort to the tired promise of rooting out “waste, fraud, and abuse” and budget gimmicks. (For a partial list of responsible spending cuts and revenue increases that we’d suggest, see here.)