Cut Spending Now, While There is Still a Mandate

Now that the Republicans have won control of the House of Representatives, where all spending must originate, we have an excellent opportunity for serious spending reduction.  Our friends at Cato posted a list of different spending plans that reduce spending by between $120 and $476 billion per year.

The plan by the National Taxpayers Union is vague and not very aggressive at only $600 billion over 5 years. Its biggest item at $354 billion is the old “eliminate waste/make government more efficient.” I personally believe there’s a lot more than that, but have yet to see any evidence that anyone is serious about actually capturing any savings from that avenue.

Heritage offers many more specifics and appears much more serious, offering savings of $343 billion per year. Their plan includes privatizing some government activities, devolving other activities to the states, and substituting vouchers for direct subsidies. It also eliminates or sharply reduces several other programs.

The “Committee for a Responsible Federal Budget” reduces and eliminates several programs, has some nebulous “across the board” spending reductions, but raises taxes on carbon emissions.

Esquire commissioned a plan that includes spending cut, etc., but lots of “revenue enhancements”. Most of its spending cuts appear fairly nonserious until you get to their “other spending” category. Even there, the plan seems vague at times (e.g., reduce farm subsidies) or eliminates pretty small amounts of money.

When reading these, I asked myself what I would do.

• Eliminate all programs created and spending increases made since 2007. My thought is that the Republic survived for well over 200 years without these expenditures, so we can surely continue without them.
• Reduce the Federal workforce by 10% in every agency and department by the end of FY2011. This doesn’t mean merely reducing headcount by 10%, it means reducing Federal payroll by 10%. Uniformed military would be exempt.
• Freeze salaries and benefits for the remaining Federal workforce for a period of at least five years and cap its growth to the same rate of inflation used for Social Security COLAs.
• Eliminate the Federal Department of Education. Cut the USDA by half (personnel and budget).
• Cap welfare programs to a maximum of two years in any ten year period for all able-bodied recipients.
• Implement a national sales tax at a rate that would match current income tax receipts. Failing that, institute a minimum 5% income tax rate on all workers, leaving other rates intact.
• Eliminate all “Community Development” activities.
• Eliminate all subsidies.
• Charge the beneficiaries of all “trade promotion” programs amounts greater than the expenditures.
• Repeal Davis-Bacon.
• Eliminate all “arts” programs.

These measures may not be easy and I don’t know how much money they might save, but they are certainly well within the expense reduction parameters private industry has generally had to live with. I have seen large companies make significantly greater reductions (on a proportional basis) several times in my career. The time has come for everyone to realize that we cannot continue spending at this rate for very long before we turn into a banana republic.