These Spending-Cut Proposals Are Meaningful

by Samuel R. Staley

The Spending Reduction Act of 2011 appears at first glance to be a meaningful step in the right direction. It’s important not to get too carried away with big numbers, though: $2.5 trillion is a lot of money, but spread out over ten years it averages $250 billion. In FY 2008, the feds spent $3 trillion, so the cuts represent less than 10 percent of total spending before the fiscal debacle over the past two years.

Still, the proposed reductions in future spending are meaningful. Most of the “savings” get us back to the FY 2008 levels, and most of this will come from imposing macro limits on future spending by eliminating automatic increases in appropriations due to inflation, resetting the budget baselines to FY 2008 levels, and reducing the federal payroll by not filling vacancies created by attrition. These aren’t trivial changes. Without establishing FY 2008 as baseline, the effective political baseline will be FY 2010, which would accept and embed the much bigger government established during the recession.

The plan also claims to cut or eliminate 100 other programs. Alas, many of these programs have been on the chopping block since the Reagan administration — Legal Services Corporation, USAID, Amtrak subsidies, Davis-Bacon repeal — and have survived.

Nevertheless, even if this plan does little more than establish a baseline for fiscal restraint leading up to the next presidential election, it will serve a valuable purpose. This is a menu of waste and a set of budgetary benchmarks and milestones that can be used to score Democrats and Republicans.

I worked with Rep. Jim Jordan, chair of the Republican Study Committee, when he was in the Ohio Senate, and he was one of the few elected officials willing to spend political capital on political principle. One always worries if the political process inevitably corrupts the best among us. This plan appears to signal that he is serious about creating a better political environment for conservative fiscal principles. Let’s hope he and his colleagues can stay the course and gather momentum for real change.

— Samuel R. Staley is Robert W. Galvin Fellow and Director of Urban & Land Use Policy at the Reason Foundation.