Today, President Obama called for $100 million in budget cuts. Out of a $4 trillion in spending this year, this is the rounding error of a rounding error:
· It is 1/40,000 of the federal budget;
· It is 1/7,830 the size of the recent “stimulus” bill;
· It would close 1/1,845 of this year’s budget deficit;
· It is the amount the federal government spends every 13 minutes; and
· For a family earning $40,000 annually, it is the equivalent of cutting $1 from their family budget.
So why bother? Because it may enhance the president’s “budget-cutter” image. Seriously. President Obama has reportedly been working closely with noted behavioral economists, and their studies have shown that most people are “insensitive to scope,” meaning they are not very good at putting large numbers in their proper context. People will react about the same to a policy proposal whether the cost/benefit is $10 million, $10 billion, or $10 trillion. Consequently, the $100 million cut may seem huge to many voters. (Note to conservative lawmakers: This is why the tiny 2005 reconciliation spending cuts were just as difficult to enact as the substantially larger 1990s reconciliation spending cuts. So if you are going to propose spending cuts, you may as well go big).
Conservatives should welcome converts, and ask President Obama to not stop at a measly $100 million. Why not come together to cut:
· At least $55 billion in annual program overpayments;
· $60 billion for corporate welfare;
· $25 billion in unused federal property
· $123 billion for programs for which government auditors can find no evidence of success;
· $140 billion in potential budget savings identified in the CBO’s “Budget Options” books; and
· Massive program duplication, such as the 342 economic development programs?
– Brian Riedl is Grover M. Hermann fellow in Federal Budgetary Affairs at the Heritage Foundation.