Department of Commerce

Proposed Spending Cuts

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Chris Edwards and Tad DeHaven

May 2010

Department of Commerce business subsidies should be abolished, including technology subsidies, handouts to fishermen, and minority business aid. The private sector does not need government help to prosper, it just needs the government to provide a stable environment with low inflation, modest taxation, and limited regulation.

The department’s economic development funding should be eliminated. Since the 1960s, the Economic Development Administration has subsidized a range of activities that would be better funded by local governments and the private sector. By funding such activities through the EDA, members of Congress become preoccupied with delivering benefits to their hometowns, which diverts their attention from truly national issues.   

The International Trade Administration should be terminated. While trade plays a crucial role in America’s prosperity, the ITA carries out unneeded and sometimes damaging activities. To an extent, the agency operates under the mercantilist fallacy that exports should be supported by the government and imports should be blocked. The agency’s anti-dumping activities hurt U.S. consumers and businesses, generate huge fees for lobbyists, and encourage retaliation by other governments.

The table shows that federal taxpayers would save about $2 billion annually by terminating and privatizing these activities or devolving them to the states. Under the proposal, Commerce would retain responsibility for statistical functions, patents and trademarks, and various scientific and oceanic activities. Reforms could be pursued in those activities as well, but the table indicates some high priority cuts to begin overhauling the department.

Department of Commerce
Proposed Spending Cuts
Program
 
Spending in 2010
 
 
($ million)
Broadband Opportunities Program $889
Economic Development Administration $469
International Trade Administration $389
Manufacturing Extension Partnership $125
Technology Innovation Program $111
Pacific salmon state grants $74
Fisheries promotion $35
Minority Business Development Agency $25
Total proposed cuts $2,117
Total department outlays $16,714
Source: Estimated fiscal year outlays from the Budget of the U.S. Government, FY2011.

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