Politics & Policy

Common Sense Cuts

Our deficit-averse politicians should target waste.

There they go again: Rep. Charles Rangel (D., N.Y.) calls it “immoral.” Senate Minority Leader Tom Daschle says it would be a “painful sacrifice.”

The war in Iraq? Try the budget recently passed by the House Budget Committee, which seeks to increase government spending by only 4% next year. This is slightly slower growth than the budgets proposed by President Bush and the Senate, and substantially less than what several liberal critics such as Rangel and Daschle would like to spend.

So how come the House version is so low? It wants to eliminate $21 billion in waste, fraud, and abuse.

With the nation at war and the budget deficit approaching $400 billion, one would think that cutting government waste is an idea everyone could agree on. Yet congressional big spenders have united to resist the plans. Instead of reducing waste, some have proposed balancing the budget by repealing most of the 2001 tax cuts.

Their opposition is based on partisan politics, but it’s a shrewd strategy: Millions of Americans depend on programs like Medicare, Medicaid, veteran’s benefits, and student loans. Charging that conservatives on the budget committee are cutting benefits — instead of government waste — represents an easy way to scare seniors, veterans, and students, and consequently pick up their votes in the next election.

That strategy is also effective. Critics used the same tactics against President Reagan in the 1980s, and against congressional reformers in the mid-1990s when they attempted to reduce government waste. The result: Government waste has ballooned, leading to higher budget deficits, and eventually, higher taxes.

The long-term savings from reducing waste would be substantial. Trimming $21 billion of fat out of next year’s budget would save approximately $264 billion — about $2,500 per household — over the next decade.

Members of Congress wouldn’t have to look hard to find $21 billion in waste, fraud, and abuse to cut. They could read recent Heritage Foundation studies, which have found:

Poor Accounting. In what has been become an annual problem, government officials couldn’t even account for more than $17 billion spent in 2001. They don’t know who spent it. Nor do they know what was bought. Officials bury this embarrassing waste deep in government auditing documents, calling it “unreconciled transactions.”

Reducing payment errors. Any Medicare savings this year would likely come from the $12 billion in annual payment errors. Payment errors also cost the food-stamp program more than $1 billion per year. Perhaps the worst offender is the Department of Housing and Urban Development, with payment errors totaling 10% of its total budget.

Frivolous defense spending. Remember those $400 hammers? The military is still squandering its scarce resources. A recent audit revealed military personnel used their government-funded travel cards to charge more than $293,000 for entertainment events, gambling, cruises, strip clubs, and prostitutes.

Cutting pork. Here’s some classic pork-barrel spending that could be cut: $725,000 for the Please Touch Museum in Philadelphia; $90,000 for the Cowgirl Hall of Fame in Fort Worth, Texas; $273,000 to help Blue Springs, Mo., combat teenage “goth culture”; and $1 million for Birmingham, Ala., to build a statue of the Roman god Vulcan. Cutting off the funds for thousands of projects like these would save $20 billion per year.

End duplication. Washington also could consolidate its many duplicative functions. For example, there are 342 separate economic development programs, 130 programs serving the disabled, 130 programs serving at-risk youth, and 72 safe-water programs. This overlap not only wastes billions in administrative overhead, it confuses those needing federal assistance who must navigate through the morass of programs.

End corporate welfare. The $90 billion spent on corporate welfare should also be eliminated. There’s no justification for taxing waitresses and welders to subsidize Fortune 500 CEOs. Furthermore, most corporate-welfare programs, such as the Advanced Technology Program, provide little or no economic value to justify their enormous costs.

Eliminating the wasteful spending listed above would save as much as $200 billion per year — nearly 10 times as much as the House Republican leaders are seeking to reduce. Liberal critics may call it “immoral” or say it will cause “painful sacrifice.” But they’re not saying what the plan really is: common sense.

— Brian Riedl is the Grover M. Hermann Fellow in federal budgetary affairs at The Heritage Foundation.


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