Tag: downsizing government

Wasteful Spending for Trump to Cut

Presidential candidate Donald Trump says that he will balance the federal budget while also cutting taxes. Given that the gap between federal spending and revenues is more than $500 billion and rising, he is going to need lots of spending cuts to make that happen.

In his big speech last night Trump said:

We are going to ask every department head in government to provide a list of wasteful spending projects that we can eliminate in my first 100 days. The politicians have talked about this for years, but I’m going to do it.

That’s great. Here are 10 “wasteful spending projects” (with annual costs) that Trump should put in his 100-day elimination plan:

  • Farm subsidies, which enrich wealthy landowners and harm the environment, $29 billion.
  • Energy subsidies, which have been one boondoggle after another for decades, $5 billion.
  • The war on drugs, which wastes police resources and generates violence, $15 billion.
  • Federal aid for K-12 schools, which generates huge bureaucracy and stifles innovation, $25 billion.
  • Excess pay for federal workers, especially gold-plated retirement benefits, which should be cut 10 percent to save $33 billion.
  • Housing subsidies, which distort markets and damage cities, $37 billion.
  • Community development and rural subsidies, which is corporate welfare used for buying votes, $18 billion.
  • Urban transit and passenger rail funding, which is properly a local and private responsibility, $15 billion.
  • Obamacare exchange subsidies and Medicaid expansion, which should be repealed along with the overall law, $200 billion a year by 2023.
  • TSA airport screening, which Trump said last night is “a total disaster,” and which should be devolved to local and private control, $5 billion.

Self-Serving Federal Bureaucrats

In the federal government, employees are paid to faithfully execute the laws, but they often pursue self-serving goals counter to those of the general public. Unionized federal workers actively oppose legislators who support reforms. Agency leaders try to maximize their budgets by exaggerating problems in society. They leak biased information to the media to ward off budget cuts. They put forward the most sensitive spending cuts in response to proposed reductions, which is the “Washington Monument” strategy.

Federal officials signal to the public that they are solving problems without actually solving them. Security agencies, for example, use “security theater” techniques that are visible to the public but do not make us safer.

Officials often trumpet the supposedly great jobs they are doing, but hide agency failures from the public. And officials stonewall congressional requests for information that may shed a bad light on them.

I describe these and other bureaucratic failures in this new essay at Downsizing Government.

The Washington Post reports on other ways that bureaucrats serve themselves and not the public. In one story the other day, the paper reported:

An assistant director of the Secret Service urged that unflattering information the agency had in its files about a congressman critical of the service should be made public, according to a government watchdog report released Wednesday.

That effort to smear Rep. Jason Chaffetz is disgraceful, but it is topped by another one in the Post the same day:

Senior executives at the Department of Veterans Affairs manipulated the hiring system to coerce two managers to accept job transfers against their will — then stepped into the vacant positions themselves, keeping their pay while reducing their responsibilities.

The executives also gamed VA’s moving-expense system for a total of $400,000 in what a new report by the agency’s watchdog described as questionable reimbursements, with taxpayers paying $300,000 for one of them to relocate 140 miles, from Washington to Philadelphia, Pa.

Rubens and Graves kept their salaries of $181,497 and $173,949, respectively, even though the new positions they took as directors of the Philadelphia and St. Paul, Minn. regional offices had way less responsibility, overseeing a fraction of the employees at lower pay levels. Rubens had been deputy undersecretary for field operations.

By and large, the federal government is not full of people that help us. They tax us, regulate us, defend their bureaucracies, and some of them try to actively fleece us. So in structuring the government, a basic assumption should be that it will not be populated by “public servants,” but by people who are in it for themselves. That is one reason why all of us should want to keep the government’s power strictly limited.

For more of the workings of the bureaucracy, see “Bureaucratic Failure in the Federal Government.”

Heritage Immigration Study and Government Spending

Conservative and libertarian scholars are clashing over the findings and political implications of the new Heritage Foundation immigration study. The study spans 92 pages and is jam-packed full of statistics and detailed calculations.

I’ll leave the immigration policy to my colleagues who are experts in that area. To me, the study provides a very useful exploration into how massive the American welfare state has become. Here are some highlights:

  • “There are over 80 of these [means-tested] programs which, at a cost of nearly $900 billion per year, provide cash, food, housing, medical, and other services to roughly 100 million low-income Americans.”
  • “The governmental system is highly redistributive … For example, in 2010, in the whole U.S. population, households with college-educated heads, on average, received $24,839 in government benefits while paying $54,089 in taxes … [and] households headed by persons without a high school degree, on average, received $46,582 in government benefits while paying only $11,469 in taxes.”
  • “Few lawmakers really understand the current size of government and the scope of redistribution. The fact that the average household gets $31,600 in government benefits each year is a shock.”

Total federal, state, and local government spending in 2010 was $5.4 trillion, or $44,932 per U.S. household. The figure of $31,600 in “benefits” is total spending less spending on public goods, interest, and government pensions.

A useful feature of the Heritage study is a breakdown of the $5.4 trillion in spending into six categories constructed by the authors. “Direct benefits” includes mainly Social Security and Medicare. “Pure public goods” includes programs such as defense and scientific research. “Population-based services” includes programs aimed at whole communities, such as police and highways. (Some of these also seem to be public goods). “Means-tested benefits” includes programs such as food stamps. Education includes both K-12 and college subsidies. “Interest and pensions” is the current costs of past spending, which includes servicing the debt and paying for government pensions. The chart shows spending in 2010.  

This spending breakdown is useful for thinking about the proper size of government. From a libertarian standpoint, governments ought to be spending only on public goods and population-based services, as a first cut. That would be $1.94 trillion, or just 36 percent of the current total of $5.4 trillion. As a percent of GDP in 2010, that would be spending of 14 percent, rather than current spending of 38 percent.

But some of the population-based services mentioned by the authors could be privatized, and spending on some of the public goods could be cut. So a good libertarian target might be less than 36 percent of current spending, or less than 14 percent of GDP.

The Heritage study is sparking a debate about what type of immigration reform the nation should have. But hopefully, it will also spur more discussion about the massive size of the American welfare state. Immigration is partly, or mainly, such a contentious issue because we have such a huge welfare state.

The study includes projections about how many trillions of dollars of government benefits will flow to immigrants and their children in the decades ahead. But conservatives and libertarians agree that we ought to cut trillions of dollars in benefits to immigrants and nonimmigrants alike.

So is there some common ground here? Can we work toward an immigration reform that cuts government dependency in general and downsizes the welfare state?

Are Spending Cuts Good Politics?

Grover Cleveland says “yes.”

Calvin Coolidge says “yes.”

Chris Edwards says “yes.” From Downsizing the Federal Government: 

Another myth is that policymakers cannot make budget cuts without a backlash from voters. Yet reform efforts in the 1990s did not lead to a voter rebuke. In 1996, the Republicans were denounced viciously when they were reforming welfare. But they stuck together and succeeded, and today the achievement is widely hailed. Also in the 1990s, the Republicans proposed reductions to many sensitive programs including Medicare, Medicaid, education, housing, and farm subsidies. In their budget plan for 1996, House Republicans voted to abolish more than 200 programs including whole departments and agencies. 

The Republicans who led on these reforms were not thrown out of office, despite many of them being specifically targeted for defeat in 1996. The most hardcore budget cutters in the 104th Congress were freshmen who were reelected with larger vote margins than they had received in 1994. They included John Shadegg and Matt Salmon of Arizona, Joe Scarborough of Florida, David McIntosh and Mark Souder of Indiana, Steve Largent and Tom Coburn of Oklahoma, Mark Sanford of South Carolina, Van Hilleary of Tennessee, and Mark Neumann of Wisconsin. Indeed, many budget-cutting Republican freshman got reelected in districts that went for Bill Clinton on the presidential ticket in 1996. The high-profile leader of the House budget cutters, John Kasich (R-Ohio), consistently won reelection throughout the 1990s with two-to-one margins. In sum, cutting the budget can be good politics when done in a serious and up-front manner. 

‘Unthinkable, Draconian’ Spending Cuts

It’s my job to advocate for spending cuts. It’s a job I’ve been doing in one form or another for over a decade. If I’ve ever experienced a victory, it must have been a pretty small one, because I can’t recall any.

So why do I persist?

For one, I’m a naturally optimistic person. And fueling that optimism is the press. I’m constantly reading about the possibility of spending cuts, and those articles usually say that the cuts would be major … or massive … or severe … or even draconian! The possibility sends a thrill up my leg.

Alas, the “draconian” spending cuts invariably turn out to be not-so-draconian after all. In fact, it’s often the case that reporters are talking about smaller spending increases rather than real spending cuts. Other times, the cuts are likely to only be temporary or come after years and years of increases.

In today’s example, a National Journal article reports that the “unthinkable” could happen: the fiscal 2013 sequestration cuts–just reduced and postponed by the fiscal cliff deal–might actually go into effect March 1st as scheduled:

Republicans and Democrats in the Senate appear to be coming to the same conclusion on spending, namely that once unthinkable, draconian cuts designed to force a more reasonable compromise may be much harder to undo than anyone ever imagined.

How “draconian” would these “unthinkable” cuts be? About $85 billion. To put that in context, the federal government will spend around $3,500 billion ($3.5 trillion) this year. The deficit alone is likely to approach or exceed $1 trillion (the federal government has run a deficit in excess of $1 trillion for four straight years).

If that’s draconian, what would the press call cutting enough spending just to balance the budget?

As we’ve been trying to demonstrate at DownsizingGovernment.org, spending cuts would be good for the country. I encourage journalists who cover federal policy to check out the site to see what real spending cuts are all about. It might cause you to have to find new adjectives to use to describe what Republicans and Democrats are really doing, but your readers would be better served–especially the wild-eyed optimists like me.

Scott Walker’s Reforms Are a Good Start

All eyes are on Wisconsin today to see whether Governor Scott Walker’s budget and public-sector union reforms will be validated by the voting public. I applaud Walker’s reforms. But his reforms should be just the first step. Virginia took the next step two decades ago and completely repealed collective bargaining in the public sector.

I happened to hear conservative radio talker Chris Plante this morning discussing his support of Walker, but saying something like “But I’m not against collective bargaining rights in either the private sector or the public sector.”

Too many conservatives, and maybe even some libertarians, seem to buy the labor union line that collective bargaining is somehow a fundamental “right,” like the freedom of speech. It isn’t. Collective bargaining in both the private and government sectors is monopoly unionism. It represents a violation of the freedom of association.

Here’s what Charles Baird says on www.DownsizingGovernment.org:

The ideas embodied in the federal union laws of the 1930s make no sense in today’s dynamic economy. Luckily, constant change and innovation in the private sector has relegated compulsory unionism to a fairly small area of U.S. industry. But the damage done by federal union legislation is still substantial. Many businesses and industries have likely failed or gone offshore because of the higher costs and inefficiencies created by federal union laws, while other businesses may not have expanded or opened in the first place. So the damage of today’s union laws is substantial, but often unseen, in terms of the domestic jobs and investment that the laws have discouraged.

Davis-Bacon, the Norris-LaGuardia Act, and the National Labor Relations Act serve the particular interests of unionized labor rather than the general interests of all labor. These laws abrogate one of the most important privileges and immunities of American citizens—the rights of individual workers to enter into hiring contracts with willing employers on terms that are mutually acceptable. …

The principle of exclusive representation [collective bargaining], as provided for in the NLRA, should be repealed. Workers should be free on an individual basis to hire a union to represent them or not represent them. They should not be forced to do so by majority vote. Unions are private associations, not governments. For government to tell workers that they must allow a union to represent them is for government to violate workers’ freedom of association. Restrictions on the freedom of workers to choose who represents them should be eliminated.

House Appropriations Chairman Behind Military Pork

After the Republicans took back control of the House following the November 2010 elections, the GOP leadership went with Kentucky Rep. Hal Rogers—a.k.a. “The Prince of Pork”—to chair the powerful House Appropriations Committee. I wrote at the time that “The support for Rogers from House Republican leaders is a slap in the face of voters who demanded change in Washington.”

I haven’t changed my mind.

A recent article in the New York Times offers up another reminder that the 30-year House veteran’s priority is to funnel taxpayer money back to his district—not downsize the federal government:

In the 1980s, the military had its infamous $800 toilet seat. Today, it has a $17,000 drip pan. Thanks to a powerful Kentucky congressman who has steered tens of millions of federal dollars to his district, the Army has bought about $6.5 million worth of the “leakproof” drip pans in the last three years to catch transmission fluid on Black Hawk helicopters. And it might want more from the Kentucky company that makes the pans, even though a similar pan from another company costs a small fraction of the price: about $2,500…The Kentucky company, Phoenix Products, got the job to produce the pans after Representative Harold Rogers, a Republican who is now the chairman of the House Appropriations Committee, added an earmark to a 2009 spending bill. While the earmark came before restrictions were placed on such provisions for for-profit companies, its outlays have continued for the last three years.

According to the Times, Phoenix Products’ president and his wife have been “frequent contributors” to Rogers’s political committee and the company has spent at least $600k on a DC lobbying firm since 2005. Those efforts apparently haven’t gone unrewarded as Rogers “has directed more than $17 million in work orders for Phoenix Products since 2000.”

Readers should keep this story in mind the next time a Republican member of Congress calls for a Balanced Budget Amendment, complains about the growth in government under Obama, and then argues against “dangerous defense cuts.” The bedtime story that Americans often hear is that the federal government must spend gobs of money on defense in order to “keep us safe from our enemies.” I once believed that story—and then I spent some time in the U.S. Senate watching policymakers treat military spending like any other pot of taxpayer money.

[See here for more on downsizing the Department of Defense.]