Managing Federal Spending

MAKING GOVERNMENT RESPONSIBLE means . . . spending federal money only on problems of real national concern . . . demanding accountability and spending money to solve problems, not just support activities.
 
MAKING GOVERNMENT RESPONSIBLE also means . . . NOT spending money we don’t have . . . NOT spending money on programs we don’t need . . . NOT using federal money to solve State and local problems . . . NOT giving taxpayer money away to buy voter loyalty

POSITION SUMMARY:  

We can, and must, reduce the cost of government by eliminating programs that have failed to achieve their objectives or outlived their usefulness.

We can, and must, stop arbitrarily increasing “entitlement” program benefits just to satisfy the desires of certain voters.

We can, and must, stop subsidizing businesses – such as large corporate farms -- that have no need for financial assistance.

We can, and must, end “pork” spending.

DISCUSSION:

In 1980, the budget deficit was approximately $200 billion dollars. By the end of the Clinton administration, the budget actually had a surplus. But today the budget deficit--independent of "emergency" stimulus spending--exceeds $500 billion.

In 1980, the National Debt was only about $1 trillion, virtually none of which was held by held by other countries). Today, the national debt is approaching $11 trillion (almost half of which is held by foreign countries).

Annual payments on the national debt consume between 20% and 25% of the federal budget. That's more than the budgets for the Departments of Education, Homeland Security, Labor, Commerce, Energy, Housing and Urban Development, State and Agriculture combined.

We must reduce government spending.
We must contain the federal deficit.

Every politician promises to reduce taxes and cut government spending. But the problem is not that Government spends too much. The problem is that Government spends money irresponsibly:

Every politician promises to reduce taxes and curtail government spending. But the problem is not that Government spends too much. The problem is that Government spends money irresponsibly:

We spend too much on the wrong things -- and too little on the things we should be spending on.

We spend too much satisfying the demands of constituents -- and too little solving real problems.

We spend too much to promote political ideologies -- and too little on programs that serve the national interest.

The federal budget is in shambles for two simple reasons:

Members of Congress do not think or act like businessmen--because it's not their money

Members of Congress spend our money freely--because we let them get away with it

Congress needs to stop enacting programs that merely do something and start requiring programs to actually accomplish something—and spend OUR money accordingly.

Wasteful and Inefficient Spending:

There are many different kinds of wasteful spending.

Spending money to maintain programs and agencies that have outlived their usefulness is wasteful.

Spending money on imagined problems, just to satisfy constituencies, is wasteful.

Spending money on activities that do not actually solve problems is wasteful.

Spending too little money on programs is also wasteful. Spending a little bit of money on a lot of different programs keeps constituents happy.  However, unless a program has sufficient funding to solve a problem, the problem will continue and the drain on the Treasury will not end.

If a problem is worthy of federal action, it is worthy of being solved.

Congress should either fund a program sufficiently to sole the problem, or not enact the program at all.

The federal government should spend taxpayer money on only the problems it can actually solve.

If a problem cannot be solved, we are wasting taxpayer money addressing it.

Federal [taxpayer] money should be spent on solving problems -- not supporting bureaucracies.

Problems get solved where services are delivered--not in bureaucracies. Every dollar spent on administration is a dollar that does not go to solving the problem.

Entitlement Spending:

Almost half the federal budget (exclusive of the federal debt) isrepresented by "entitlements"--socil security, medicare, welfare. WE MUST RORM THESE PROGRAMS.

Social Security: We have made promises to everyone who paid into the social security system. These promises have to be honored. However, our only national obligation is to provide the benefits promised when retiree’s paid into the system. There is no inherent need, or justification, for automatic annual increases in Social Security benefits for all recipients. For those who have no other resources and rely on Social Security alone, we have other programs—and some of them should be expanded. But the burden placed on the Social Security System itself must be contained.

Medicare: The mere fact that we can treat all the medical conditions that affect our senior citizens does not mean that we, as a nation, have an obligation to provide every senior citizen with access to even the most advanced and expensive treatments that are available. Basic needs must be met, but not every need must be met with government funds. Some benefits must be eliminated.

Welfare: There is a big difference between a social safety net and socialism. We cannot ignore the needs of the neediest among us. We cannot ignore the needs of the homeless and the hungry. There are those who cannot provide for themselves, and we have a moral duty to provide for them in a reasonable and appropriate way. For all other, it is in our national interest to provide them with every reasonable opportunity to improve their circumstances.

The Personal Responsibility and Work Opportunity Act of 1996 did away with the cash-assistance entitlement aspect of the "welfare" system and replaced it with a system providing limited-duration benefits, limited assistance and a requirement to take any available minimum wage job -- regardless of the person's willingness and ability to be trained for a decent paying job. We can do better.

 

I will support any program that assists those who are truly in need and cannot provide for themselves, AND I will support any program that will help people who are willing to take advantage of it to overcome their circumstances

We must also address fundamental inefficiencies in the welfare system to reduce the cost of services and assure that those programs and services we choose to offer are accessible to those in need in the least burdensome and most cost-effective way.

Military Spending:

Military spending, and related defense and national security related spending (including Homeland Security, Veterans Administration, NASA and related agencies) accounts for more than 50% of the federal budget.

We can all agree that national security and national defense are the first responsibilities of the federal government. But how much military spending is enough—and how much is too much. We have the mightiest military on the face of the earth. How much mightier do we have to be?

Yes. We need to continue to engage in research and the development of advanced weapon system. But we do not have to deploy all of them immediately? We need to have the proven technology of an F-22, but we do not have to replace every fighter in the Air Force, Navy and Marine Corps with new F-22’s—at a cost of billions and billions of dollars. The massive U.S. military buildup of the 1980’s is generally credited with being a major cause of the final collapse of the Soviet Union. Sooner or later, our own economy will suffer the same fate if we do not curtail our military spending.

Furthermore, when we do decide to deploy new weapons etc, we have to change the way we buy them. Military suppliers have no incentive to economize because they generally operate on cost-plus contracts—the more they spend, the more they earn. Consequently, military contractors are geared to cost maximizing rather than cost minimizing. Sole-source, no-bid contracts are unjustifiable.

It is also time that Congress stopped making military spending decisions. Congress should limit itself to appropriating funds for the military and let the Pentagon decide where to spend the money. I'm sick and tired of Congressmen using the Pentagon budget to promote themselves by directing military spending to their districts for things the military does not even want.

"Pork" Spending:

Ninety percent of all earmarks never appear in the versions of the appropriations bills passed by the House and Senate. Rather, they are inserted in the bill by the House-Senate conferees shortly before the bill is sent to the President. The U.S. Office of Management and Budget has an online database of more than 13,000 congressional “pork” earmarks totaling over $20 billion.

The Federal Funding Accountability and Transparency Act [FFATA] requires the full disclosure to the public of all entities or organizations receiving federal funds. However, there is no requirement that the sponsor of the identified spending be identified. The FFATA should be amended to require disclosure of: (a) the Congressman requesting the “pork” appropriation and, where applicable, (b) all business relations between the Congressman and how much the recipient organization or contributed to the Congressman’s campaign.

Corporate Welfare:

American business opposes regulation in any form.  But corporations are quick to seek government assistance to subsidize their activities and rescue them from the consequences of their own bad decisions. The litany of misdirected government policies is far in excess of what can be discussed here, but a few examples illustrate the problem.

Corporate Bailouts: An economy is very much analogous to a forest. Periodic forest fires are necessary because they clean away weak growth and debris accumulated on the forest floor and make way for new growth. Actions that perpetually delay forest fires do more harm than good. By analogy, a periodic shake-up in the economy is necessary to clean out the weak and inefficient businesses and enable new business to take hold. Federal actions that prop up weak and inefficient businesses or industries do not do any favor for the economy.

Congress holds all the cards,
and ir still gives away the national treasury.

Federal support for corporations should be provided in the form of loan guarantees--not direct federal loans. If a loan goes bad, the later federal payment of the amount guaranteed does no more harm to the Treasury than a direct loan (or capital infusion) in the beginning. However, in the meantime, the federal government will not have borrow funds to make the bailout--so it will not increase the federal debt and it will not have been paying interest on the money borrowed from the public.

Agriculture Subsidies: Agricultural subsidies are generally justified with the argument that they are necessary to stabilize the incomes of poor family farmers who are at the mercy of unpredictable weather and crop prices. If that were the case, the federal government could bring the income of every full-time farmer in America up to 185 percent of the federal poverty level (slightly over $33,000 for a family of four) for just $4 billion per year. In reality, however, the government spends nearly $20 billion annually on programs that target large farms and agribusinesses. The continuation of agricultural subsidy programs cannot be justified based on any purported benefit they provide.

Tax subsidies: Tax deductions and tax credits are little more than disguised spending. The only difference is that the government does not collect the money first and then return it. Whatever label we put on them, they represent a drain on the federal Treasury and must be examined in the context of federal spending policies. [My views on tax reform are discussed in detail in a separate topic under “Issues.”]

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