Federal cost-cutting should be a central focus of the next president. One effort that should be bipartisan is overhauling the government’s out-of-control procurement system. Federal contractors routinely get away with outrageous cost overruns at taxpayer expense. From today’s Wall Street Journal:
News of the intellectual demise of the Republican Party comes almost daily. In its coverage of the bipartisan vote in favor of the farm bill (which overrode a well-deserved Bush veto) the Washington Post included this reaction:
The latest Rasmussen national survey “found that 62% of voters would prefer fewer government services with lower taxes. Nearly a third (29%) disagrees and would rather have a bigger government with higher taxes. Ten percent (10%) are not sure.”
No doubt that if Downsizing the Federal Government were on college reading lists, support for reform would jump from 62% to at least 90%.
Still, no matter how well-informed the public becomes, Congress poses a barrier to reform. The magic of Congress is its ability to consistently transmogrify the long-standing public preference for smaller government into ever larger budgets. Part of the trick is that members always claim that they support budget restraint in general, while arguing at the same time that each particular program, when it is up for a vote, desperately needs to be expanded.
How then can we realign congressional procedures to better reflect the 62 percent support for government downsizing? Part of the answer is to impose a cap on growth in the overall federal budget, allowing it to grow no more than the average family budget each year.
USA Today reporter Dennis Cauchon is an expert at distilling complex data about governments down to bite-size pieces. Today he finds that:
Taxpayers are on the hook for a record $57.3 trillion in federal liabilities to cover the lifetime benefits of everyone eligible for Medicare, Social Security and other government programs, a USA TODAY analysis found. That’s nearly $500,000 per household.
When obligations of state and local governments are added, the total rises to $61.7 trillion, or $531,472 per household. That is more than four times what Americans owe in personal debt such as mortgages.
Kudos to USA Today for running such hard-data stories on the front page. Too many newspapers opt for the ”human interest” angle when reporting on government economic policy.
Cauchon’s data raises many questions. For one, how could governments have gotten away with imposing $62 trillion of unfunded obligations on young Americans?
At the state and local level, taxpayers have been sleeping as union-backed politicians have jacked-up compensation levels for the nation’s 16 million state and local workers.
You don’t have to be a libertarian to be amazed at the way the government’s many tentacles often work at cross-purposes. The Wall Street Journal reports today on the U.S. milk industry:
Yesterday I blogged about a Washington Post column by Shankar Vedantam that began: “About 35 million Americans regularly go hungry each year, according to federal statistics.” I looked up the federal data, and the real number appears to be about 9 million.
I queried the Post about the discrepancy, and Shankar kindly pointed me to this study produced by academic health scholars and the Sodexho Foundation. (I appreciate the prompt replies by both Shankar and the Post’s ombudsman).
The Sodexho study is a classic example of program advocates apparently inflating the size of a problem in order to prompt “Congress to expand existing programs,” as it proposes. I am not a health specialist, but it seems to me that Sodexho using 35 million for the number of Americans going hungry is a huge exaggeration.
On page 10 and 11 of the Sodexho study, the authors admit that they are including both those people who occasionally go hungry and those who are “food insecure,” which is a far larger group. As I noted yesterday, the USDA puts the narrower group (those sometimes going hungry) at only about 9 million people.
While the Sodexho authors admit that they are using the broader group, they do not tell readers how vastly narrower the actual hunger group is. (The table on page 11 only shows the broader measure).
Senator John McCain and other budget reformers are right to rail against the institutionized corruption of federal “earmarking.” Earmarks are, however, just a small part of the massive bloat in the federal budget. Earmark reform is needed, but presidential candidate McCain needs to propose more fundamental budget reforms in the coming months.
Representatives John Campbell (R-CA) and Jeb Hensarling (R-TX) have just introduced an idea that McCain could champion: A constitutional cap on the overall federal budget. You can read the proposed amendment here, but essentially these House budget experts propose that annual federal spending growth should not exceed the long-run average growth in the U.S. economy, except with a two-thirds vote or a declared war.
Either way, the point for Mr. McCain (or Mr. Obama, if he is so inclined) is to promote some sort of overall cap on the budget to drive home that the government’s budget should not grow any faster than the average family’s budget.
Here are some notes on the federal budget released by the Bush administration today:
Here are some bullet points regarding the new federal budget to be released on Monday:
- The Bush administration will introduce yet another irresponsible federal budget, which this year features a huge $400 billion deficit and spending that tops $3 trillion. Amazingly, President Bush was also in office when federal spending topped $2 trillion (back in 2002).
- President Bush promises once again that the budget will be balanced sometime down the road, but he again uses phony accounting to make that claim. For one thing, he hasn’t accounted for future relief from the alternative minimum tax (AMT), which Congress will surely provide. Also, Bush has not included all the likely future Iraq war costs in his budget.
- To his credit, President Bush proposes some savings to Medicare and Medicaid, two of the largest and fastest growing federal programs.