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Yes, Mr. President, You Can Cut Spending

Posted By Kathryn Nix On June 8, 2010 @ 7:00 pm In Economics | Comments Disabled

Today, White House Chief of Staff Rahm Emanuel and budget director Peter Orszag released a joint memo asking government agencies to create lists of ineffective programs with the intention of enacting future budget cuts of 5 percent.

This initiative follows in the footsteps of proposed legislation that would give the president greater power to cut spending by requiring Congress to vote on line-item spending rescissions requested by the president.  To have a significant impact on federal deficits, larger steps will need to be taken, but both ideas take small steps towards making Washington more efficient.

There’s plenty of waste to go after.  In 2004, Heritage budget expert Brian Riedl [1] listed duplicative programs that could, but have not yet been, eliminated.  These include 343 economic development programs, 130 programs serving the disabled, 130 programs serving at-risk youth…the list goes on.  Riedl explains that “having several agencies perform similar duties is wasteful and confuses program beneficiaries who must navigate each program’s distinct rules and requirements.”  Moreover, duplicity in government programs makes it more difficult for each one to achieve its goal.

Wasteful spending doesn’t stop at program redundancy, either.  In Heritage’s 2010 edition of Federal Spending by the Numbers [2], Riedl points to plenty of areas where lawmakers could make painless cuts.  For example, Washington spends $25 billion each year to maintain unused or vacant federal properties, and $92 billion on corporate welfare.  Then there’s the less costly but no less absurd $2.6 million that Washington spends to train Chinese prostitutes to drink more responsibly.

In the last five years, Government audits have shown that 22 percent of all federal programs fail to show any positive impact towards their intended objectives yet cost taxpayers $123 billion annually.

However, this should be seen as just the beginning.  To have a profound impact, more drastic changes will be needed.  This proposal alone would create at most $20 billion in savings, addressing just 2 percent of the federal deficit.  The next step should be deep impact reforms such as repealing the stimulus and the trillion plus health care bill, and enacting major entitlement reform, targeting the unfunded liabilities created by Medicare, Medicaid, and Social Security.

Finally, the White House’s budget cuts wouldn’t require agencies to report on expendable programs until September 13, and effects wouldn’t occur until 2012.  If the White House is serious about cutting spending, they could—and should—start right now.  The Impoundment Control Act of 1974 gives the president the ability to rescind enacted spending by sending a message to Congress with directions, which a Member can then introduce in a bill.  Since 1974, presidents have submitted 1,178 rescissions totaling $76 billion.  Since Republicans expressed their desire for the president to offer a rescission package, an immediate request from the president would be almost sure to come to a vote in the House.

Baby steps towards fiscal responsibility are a positive turn for the administration, but to show the American people they mean business, the White House should also begin cutting spending immediately and pursue reform with larger impact on the federal deficit.


Article printed from The Foundry: Conservative Policy News from The Heritage Foundation: http://blog.heritage.org

URL to article: http://blog.heritage.org/2010/06/08/yes-mr-president-you-can-cut-spending/

URLs in this post:

[1] Heritage budget expert Brian Riedl: http://www.heritage.org/Research/Reports/2004/03/How-to-Get-Federal-Spending-Under-Control

[2] 2010 edition of Federal Spending by the Numbers: http://www.heritage.org/Research/Reports/2010/06/Federal-Spending-by-the-Numbers-2010

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