Tag: downsizing government

This Week in Government Failure

Over at Downsizing Government, we focused on the following issues this week:

  • A high priority for the new Congress should be to privatize the Federal Aviation Administration.
  • It seems clear that allowing the private sector to play a greater role in space is ideal, especially given NASA’s history of fiscal mismanagement.
  • Earmarking is a symptom of the problem. The problem is the existence of programs that enable the federal government to spend money on parochial activities.
  • The Beltway class will be starting the New Year off in better shape than the rest of the country.

Thank you to everyone who has helped make the Downsizing Government website a success this year. Now it’s time to get cocked, locked, and ready to rock with the new Congress.

This Week in Government Failure

Over at Downsizing Government, we focused on the following issues this week:

  • Downsizing Government was featured on C-SPAN.
  • Unfortunately, because government has come to dominate road construction, most citizens probably don’t stop to consider that the private sector can provide superior alternatives.
  • Evidence that higher education subsidies are counterproductive handouts.
  • The omnibus abomination makes it easy to understand why Congress’s approval rating is at a new low.
  • The United States is #1!  We now have the highest corporate tax rate among the 34 wealthy nations of the Organization for Economic Cooperation and Development.

This Week in Government Failure

Over at Downsizing Government, we focused on the following issues this week:

Bright Spots in Fiscal Commission Report

President Obama’s Fiscal Commission has produced a serious and sobering analysis of the government’s budget mess, and it provides some of the needed solutions. Three of the report’s main themes are on target: the need to make government leaner, the need to cut business taxes to generate economic growth, and the need to impose tighter budget rules to discipline spending.

The report rejects the view of many Democratic leaders that the welfare state built over the last 80 years must be defended against any and all budget cuts. “Every aspect of the discretionary budget must be scrutinized, no agency can be off limits, and no program that spends too much or achieves too little can be spared. The federal government can and must adapt to the 21st century by transforming itself into a leaner and more efficient operation.” How lean the government should be, and how many agencies to eliminate, will be the central fiscal debate in coming years. Downsizing government is the order of the day.

The report recognizes the need to spur economic growth, particularly by cutting the corporate tax rate. “The corporate income tax, meanwhile, hurts America’s ability to compete… statutory rates in the U.S. are significantly higher than the average for industrialized countries … and our method of taxing foreign income is outside the norm…. the current system puts U.S. corporations at a competitive disadvantage against their foreign competitors.” The report recommends cutting the 35 percent federal corporate tax rate to 28 percent or less to respond to the Global Tax Revolution and to “make America the best place to start a business and create jobs.”

Finally, the report suggests that Congress impose new procedures to enforce budget restraint. However, the rules suggested by the commission are complex and not tight enough. It would be simpler and more powerful to impose a cap on overall federal spending. For example, a law could require that the government’s overall budget not grow faster than general inflation each year else the president would sequester spending across-the-board. Such a cap would be easy for the public to understand and enforce.

In sum, the report provides a useful menu of reform options that incoming members of a more conservative Congress can pursue next year. We need bigger spending cuts than the commission has laid out—as I’ve outlined in this balanced-budget plan—but the commission deserves credit for spurring a national discussion on how to downsize the federal government.

Rep. Kingston’s Spending Cut Plan

An indicator of the incoming House Republican majority’s seriousness about cutting spending will be which members the party selects to head the various committees.

Many of the members in line to chair committees leave a lot to be desired from a limited government perspective (see here and here). In particular, the top candidates in line to chair the critical House Appropriations Committee, Reps. Jerry Lewis (R-Calif.) and Hal Rogers (R-Ky.), are about as inspiring as re-heated meatloaf when it comes to their potential for pushing serious spending reforms.

According to the Wall Street Journal, appropriator Jack Kingston (R-Ga.), is eyeing the chairman’s gavel even though he’s only fifth in line in terms of seniority. Kingston has put together a spending restraint plan in PowerPoint for consideration by the 26 member Republican Steering Committee, which will decide on committee chairs.

Although the Journal notes that Kingston is “no spending virgin,” there is a lot to like about his plan, which is promisingly entitled “Changing the Culture: A New Vision for the House Appropriations Committee.”

Here are my thoughts on the plan’s contents:

  • One slide shows a list of “Big Stuff” and places at the top “State Addiction to the Federal Government.” The language is perfect and indicates that Kingston recognizes that federal aid to the states is a significant issue that needs to be addressed. Reinstituting “fiscal federalism” is one of the chief principles of reform addressed on the Downsizing Government website.
  • The same slide acknowledges the trillion dollar cost of the wars in Afghanistan and Iraq. This inclusion perhaps signals that Kingston is prepared to get serious about reining in defense spending, unlike many Republicans.
  • Kingston proposes new spending caps that would work to eventually reduce total federal spending to 18 percent of GDP. He notes that “This approach would require Congress to focus on the actual problem of spending, as opposed to deficits, which are a symptom.” Only interest on the debt would be off limits from sequestration should Congress fail to adhere to the spending caps.
  • Kingston calls federal grants “the new earmarks” and singles out the $7.2 billion broadband grant program for criticism, noting that it “pay[s] companies to do what they would do on their own.” As I recently explained, eliminating earmarks but keeping the federal grant programs that fund the same activities would amount to a Pyrrhic victory.
  • Kingston calls for more “budget hawks” on the appropriations committee, and singles out spending reformer Rep. Jeff Flake (R-Ariz.) for inclusion on the committee. He also calls for getting “members off subcommittees in which they are unable to take hard votes.” Amen. If Republicans want to cut spending, then they need to put members on the committees who will actually vote to do it.

The Journal explains that the GOP leadership, in particular incoming House Speaker John Boehner, had better take Kingston’s candidacy seriously:

Officially, committee chairs are selected by the 26 or so person GOP Steering Committee, but Mr. Boehner has five votes on the panel and he can block anyone from getting the nod. A Steering Committee decision can be overturned by a vote of the full GOP House conference, and the leadership should worry that selecting someone like Mr. Rogers could lead to a rank-and-file revolt.

Republicans claim to be the party of fiscal probity and that they’ve learned from their demise in 2006. Mr. Kingston’s proposals are the kind of creative thinking that Republicans are going to need to carry out the principles and agenda they say they believe in.

When tea party voters helped give the Republicans a second chance at reining in government spending, they didn’t have in mind re-heated meatloaf – they want steak. Boehner and the House GOP leadership would be wise to oblige, or else these voters might dine elsewhere in 2012.

Five Ways to Cut Military Spending Today

The U.S. military has an important purpose, protecting Americans, but that purpose has been distorted over the years. Here are five military spending cuts Congress and the President can make today while they undertake the harder task of rethinking the true purpose of the military and then restraining its use. These recommendations are derived from the report, “Budgetary Savings from Military Restraint.”


This Week in Government Failure

Over at Downsizing Government, we focused on the following issues this week:

  • For its final report, Obama’s fiscal commission’s staff might look to Clinton’s budgets for guidance.
  • The U.S. Postal Service announces a net loss of $8.5 billion for fiscal 2010.
  • A new Cato policy analysis eviscerates the “one industry [that] has unquestionably been socialistic for decades: urban transit.”
  • Benjamin Franklin wrote that “in this world nothing can be said to be certain, except death and taxes.” Were he alive today, Franklin might add to the list corruption in federal housing programs.
  • The president who has brought us regime uncertainty, more regulations, more government intrusion into the economy, more debt, and is proposing to raise taxes on productive businesses and individuals wants to celebrate National Entrepreneurs’ Day?