Finding Victims for Trump Budget Cuts

A Washington Post story today about one of President Trump’s budget cuts reflects what can be called victim journalism. The story focuses on the proposed ending of federal funding for the Appalachian Regional Commission (ARC), which provides subsidies for economic development in selected states. The reporter presents an interesting narrative about some ARC beneficiaries, but does not provide the balance needed to judge the overall value of the program.

The story presents individuals in Appalachia as victims, and federal money as the only savior. It does not focus on personal responsibility, local government policies, or federal program failures. The reporter does not mention any studies examining the ARC’s overall effectiveness, or whether auditors have done a benefit-cost analysis to see whether the program’s benefits outweigh the costs.

However, the main problem with the Post story is a lack of appreciation for the federal structure of American government. Statements like this bewilder me: “The federal funding [for ARC] often goes toward repairing essential services rural towns cannot afford on their own, such as fixing broken sewer systems…”

Sewer systems are indeed an essential local service. As such, they should receive a high priority in state and local budgets. If sewers in Appalachia are not being fixed, then state and local governments are failing at a core responsibility. Reporters should ask why that is.

The ARC sprinkles about $150 million a year across 13 states, from New York to Mississippi. Combined state and local spending in those states (excluding federally funded spending) is more than $800 billion a year. So the supposedly crucial ARC spending represents less than 0.02 percent of the region’s own government spending. If the ARC were eliminated, those governments could easily fill the small void with their own money.


Addendum

Let’s drill down on Kentucky, which was the focus of the Post story and is in the center of the ARC region. If all the ARC money were spent just in Kentucky, it would still be only 0.5 percent of the roughly $30 billion in state/local spending in that state.

The Post story claims “so much of the Appalachian commission’s budget — $146 million in 2016 — goes toward infrastructure projects…” Assuming that is true, why doesn’t Kentucky have room in its own budget for infrastructure such as sewers? Looking at Census data for state and local governments in Kentucky suggests why. Total capital spending on sewers and solid waste was $234 million in 2014, but spending on “public welfare” was $8 billion and spending on government worker salaries was $10 billion.