Is Efficient Government A Good Thing?

One of the behind-the-scenes initiatives of President Bush’s budget staff the past six years has been something called the Program Assessment Ratings Tool (PART) analysis. It’s an effort to measure the “effectiveness” and “efficiency” of nearly 1,000 federal programs. Each program is graded on how well it achieves its “goals,” with marks ranging from “effective” (the equivalent of an A grade) to “ineffective” (the equivalent of an F grade).

In Tuesday’s Investor’s Business Daily op-ed section, Ernest Christian and Gary Robbins take a look at the results to date of the effort:

Congress is about to wave its wand over nearly $1 trillion of additional "discretionary" spending that will, among other things, perpetuate or increase funding for nearly 500 expenditure programs that are not even "moderately effective," according to the Office of Management and Budget. This includes more than 200 expenditure programs that have failing grades of D or F.

By our calculations, the OMB study, called Program Assessment Ratings Tool (PART), further reveals that on average more than half of all federal expenditure programs are falling about 50% short of their stated goals.

This means that out of every dollar spent, 50 cents may possibly be accomplishing something worthwhile, but the remaining 50 cents might as well have been poured down a rat hole. In these cases alone, the cost of government incompetence is over $250 billion per year.

The list of programs with the lowest grades might make any supporter of limited government point wildly and say, “Told you so!” This rogue’s gallery includes the Department of Housing and Urban Development’s pork-filled Community Development Block Grants, the Department of Education’s Even Start literacy program, and Amtrak.

But what about the ones that received the equivalent of an A or B grade – those programs that are “effective” or “moderately effective”? That list includes homeless assistance grants, agricultural export subsidies, Indian housing loan guarantees, the non-insured crop assistance program, and corporate welfare programs like the Trade and Development Agency which subsidizes overseas demand for the products of various corporations.

The main activity these programs are really “efficient” at is spending your money in new and interesting ways on things they shouldn’t be spending your money on in the first place.

Take the non-insured crop assistance program, for instance. This program subsidizes farmers who aren’t holding a federal crop insurance policy in the event of a crop-damaging natural disaster. What did it do to earn the honor of being listed as “moderately effective”? It became very good at increasing the number of crops eligible for subsidies.

Sure, knowing when the government is losing money to fraud or mismanagment is important. But it makes more sense to determine whether these programs should exist at all before deciding what they should be “efficient” at doing. Besides, an efficient but unjustified wealth-redistribution program might actually be worse than an inefficient one. The former will likely be better at finding innovative ways of expanding the scope of its operations.

Slapping the “efficiency” label on certain federal programs is a bit like putting lipstick on a pig. You can dress up Leviathan, but it’s still Leviathan.