The Daily Caller asked me which federal department or agency I would most like to see eliminated. If I actually had the power to eliminate one department or agency, I would choose the Department of Health & Human Services, which houses two key pillars of the federal welfare state (Medicare and Medicaid). However, I decided to choose the Community Development Block Grant program for the purpose of bringing attention to the desirability of eliminating federal subsidies to state and local government:
Having to choose one department or agency to eliminate is like going into the world’s largest candy store and being asked to pick only one item. Therefore, I’ll choose something symbolic: the Community Development Block Grant program in the Department of Housing & Urban Development.
The $8 billion CDBG program, which funds local development activities, epitomizes the breakdown in the boundaries the Constitution erected between the federal government and the states. Adjusted for inflation, federal subsidies to state and local government have skyrocketed 75 percent in just the past decade.
CDBG funds are initially handed out to state and local governments, but the ultimate beneficiaries are usually private businesses and organizations working on particular projects, such as shopping malls, parking lots, and swimming pools. Recent examples include funds for renovations to a wine bar in Connecticut and money for a brewery in Michigan to expand its facilities.
Local government officials love this program because they get to spend money coerced from taxpayers across the fifty states instead of having to ask their own constituents to pony up. While the lunch might be free for local officials, it comes at a cost to the country because the resources to pay for these projects have to be taxed or borrowed out of the economy. Those costs have a negative ripple effect on the economy, just as proponents will argue that the benefits have a positive ripple effect.
Ineffectiveness, waste and abuse, politicization, and excessive bureaucracy are just a few of the problems with the CDBG program. Most importantly, this program represents a morally dubious redistribution of resources from federal taxpayers to parochial interests.