RSC Spending Plan a Good Start, More is Needed

The Republican Study Committee, the conservative House caucus, released a bill this week to cut $2.5 trillion in spending over the next 10 years.  This plan, which is summarized in a two page document, includes cuts in specific Obama programs, as well as the elimination of old programs and subsidies.

The main objective of the RSC plan is to pass a CR that caps non defense/security discretionary spending for the remainder of FY 2011 to 2008 spending levels.  Then, beginning in 2012, this bill would slash discretionary spending to 2006 levels and would eliminate automatic increases for inflation.  The Spending Reduction Act of 2011 also calls for cuts in federal employees and their salaries, the privatization of Freddie Mac and Fannie Mae, and the sequestering of the remaining stimulus funds.  Finally, the plan calls for the elimination of 56 programs, mandates, or subsidies that will save an additional $330 billion over 10 years.

While the RSC plan is a bold and prudent beginning, there is much more work to be done.  It's important to note that recent budget deficits have skyrocketed to a gargantuan $1.3-$1.4 trillion.  This budget plan would only shave off an average of $100 billion per year.  Here are some other programs that should be eliminated as we aim for a balanced budget.  Many of these cuts will probably be included in the new Welfare Reform Act that the RSC plans to unveil in the coming days.



These figures represent annual budget cuts from eliminating or restructuring programs that were identified and compiled by Brian Riedl of the Heritage Foundation.  I highlighted the suggestions that were already adopted by the RSC in their Spending Reduction Act.

 Spending Cuts for FY 2012

(in millions of dollars)

Agriculture
$15,000	Replace farm subsidies with Farmer Savings Accounts and improved crop insurance.
$2,033	Eliminate the Foreign Agriculture Service.
$1,500	Merge all four agriculture outreach and research agencies and cut their budget in half.
$1,000	Fund the Food Safety and Inspection Service with user fees.
Commerce
$500	Eliminate business subsidies from the National Institute of Standards and Technology.
Community Development
$6,000	Eliminate the Community Development Block Grant program.
$598	Eliminate the Rural Utilities Service.
$523	Eliminate the Economic Development Administration.
$480	Eliminate NeighborWorks America (formerly the Neighborhood Reinvestment Corporation).
$200	Consolidate the Rural Housing and Development Programs and convert them into block grants.
$73	Eliminate the Appalachian Regional Commission.
$48	Eliminate the Denali Commission.
$31	Eliminate the Minority Development Business Agency.
$8	Eliminate the Delta Regional Authority.
Education
$8,000	Return Pell Grants to their 2009 funding level of $24 billion, which is still double the 2007 level.
$2,000	Trim Head Start by $2 billion and convert it into vouchers.
$2,000	Scale back the Education Department bureaucracy.
$1,500	Eliminate dozens of small and duplicative education grants.
$298	Eliminate state grants for Safe and Drug-Free Schools and Communities.
Energy and the Environment
$6,500	Reduce energy subsidies for commercialization and some research activities.
$600	Block grant and devolve Environmental Protection Agency grant programs.
$200	Restructure the Power Marketing Administrations to charge market-based rates.
$63	Eliminate the Science to Achieve Results Program.
Government Reform
$44,000	Halve federal program payment errors by 2012, especially by reducing Medicare errors and earned income tax credit errors. Tighten oversight by spending $5 billion on new resources, such as updated computer systems, and then recover $49 billion in payment errors.
$20,000	Rescind unobligated balances after 36 months.
$12,500	Halve the $25 billion spent to maintain vacant federal properties.
$10,000	Cut the federal employee travel budget to $4 billion (half of FY 2000 spending).
$3,000	Freeze federal pay until it can be reformed.
$1,000	Suspend acquisition of federal office space.
$600	Trim the federal vehicle fleet by 20 percent (a reduction of 100,000 vehicles).
$300	Cut the House and Senate budgets back to the 2008 level of $2.2 billion.
$215	Eliminate the Presidential Election Campaign Fund.
$100	Tighten controls on federal employee credit cards and cut down on delinquencies.
$70	Require federal employees to fly coach on domestic flights.
Health Care
$6,200	Reform Medigap.
$5,000	Repeal Obamacare (larger savings in later years).
$3,700	Require Medicare home health co-payments.
$673	Eliminate the Maternal and Child Health Block Grant.
$414	Eliminate Health Professions grants.
$327	Eliminate Title X Family Planning.
$150	Eliminate the National Health Service Corps.
$98	Repeal Rural Health Outreach and Flexibility grants.
Homeland Security
$2,700	Eliminate most homeland security grants to states and allow states to finance their own programs.
Income Security
$500	Better enforce eligibility requirements for food stamps.
Interior
$1,500	Open the coastal plain of the Arctic National Wildlife Refuge to leasing. (The savings are leasing revenues, which are classified as negative spending in the federal budget.)
$200	Suspend federal land purchases.
International
$2,636	Eliminate the Development Assistance Program.
$625	Eliminate the State Department’s education and cultural exchange programs.
$321	Eliminate the International Trade Administration’s trade promotion activities or charge the beneficiaries.
$183	Eliminate the Democracy Fund.
$68	Eliminate the International Trade Commission and transfer oversight of intellectual property rights to the Treasury Department.
$56	Eliminate the Trade and Development Agency.
$29	Eliminate the Overseas Private Investment Corporation.
$19	Eliminate the East–West Center.
$17	Eliminate the United States Institute of Peace.
$2	Eliminate the Japan–United States Friendship Commission.
Justice
$7,334	Eliminate all Justice Department grants except those from the Bureau of Justice Statistics and the National Institute of Justice, thereby empowering states to finance their own justice programs.
$398	Eliminate the Legal Services Corporation.
$32	Eliminate the Justice Department’s Community Relations Service.
$30	Eliminate the duplicative Office of National Drug Control Policy.
$26	Reduce funding for the Justice Department’s Civil Rights Division by 20 percent because of its policy against race-neutral enforcement of the law.
$4	Eliminate the State Justice Institute.
Labor
$4,300	Eliminate failed federal job training programs.
$2,000	Eliminate the ineffective Job Corps.
$576	Eliminate the Senior Community Service Employment Program.
National Science Foundation
$1,700	Reduce National Science Foundation funding to 2008 levels.
$86	Eliminate National Science Foundation spending on elementary and secondary education.
Transportation
$45,000	Devolve the federal highway program and most transit spending to the states. (partially addressed in RSC plan)
$1,900	Privatize Amtrak.
$1,009	Eliminate grants to large and medium-sized hub airports.
$554	Eliminate the Maritime Administration.
$125	Eliminate the Essential Air Service Program.
Treasury
$26,646	Eliminate the additional child refundable credit.
$103	Eliminate the Community Development Financial Institutions Fund.
Veterans
$2,500	Cap increases in Department of Veterans Affairs health care spending.
$1,930	Reduce Veterans’ Disability Compensation to account for Social Security Disability Insurance payments.
Cross-Agency and Other
$60,000	Repeal unspent stimulus spending.
$8,000	Switch to using the “Superlative CPI” in funding calculations.
$6,000	Repeal the Davis–Bacon Act.
$2,250	Eliminate Federal Communications Commission funding for school Internet service.
$2,000	Ban project labor agreements on all federally funded construction projects.
$1,000	Eliminate the Small Business Administration, which unnecessarily intervenes in free markets.
$736	Eliminate the National Community Service programs, such as AmeriCorps.
$253	Eliminate the Institute of Museum Services and Library Services.
$140	Eliminate the National Endowment for the Humanities.
$133	Eliminate the National Endowment for the Arts.
$61	Eliminate Army Corps of Engineers funding for beach replenishment projects.
$10	Eliminate the Commission of Fine Arts.
$8	Eliminate the National Capital Planning Commission.
$5	Eliminate the Advisory Council on Historic Preservation.
Total
$343,207 million

As you can see, the Republican plan has touched upon many of the suggested cuts by the Heritage Foundation.  There are also some cuts that are mentioned in the RSC plan that generally cover some other programs that are listed above.  However, there are still billions of dollars in cuts that need to be made, especially in the realm of welfare and "tax credit" handouts to those who don't pay taxes.  There are also several agencies in the Departments of Agriculture, Education, Energy, and Labor that need to be ameliorated or eliminated.  We look forward to RSC Chairman Jim Jordan's welfare reform bill which promises to be a second act of this budget proposal.

Unfortunately, even if we take the scythe to every gratuitous component of discretionary spending, we will never balance the budget unless we enact entitlement reform.  Discretionary spending will only account for $1.3-$1.4 trillion of the estimated $3.7 trillion in total FY 2011 outlays.  In other words, the budget deficit is roughly as large as the sum total of all discretionary spending including defense, homeland security, and veterans expenses.  We simply must deal with the $2.3 trillion in annual entitlement spending if we are going to achieve any budget solvency.

Although many Republicans blithely shy away from entitlement reform, now is the time to push for privatization of Social Security and Medicare and the complete overhaul of Medicaid.  We need to stop the left and the media from framing it as "cuts in SS and Medicare".  That disingenuous portrayal of entitlement reform  implies that seniors will be denied a percentage of their benefits even while contributing the same amount.  Instead, we need to advocate the empowerment of the individual through private ownership of their own destiny.  We must certainly honor all of the obligations to those who paid into the system.  But there must be a way out of this government control of retirement for younger workers.  When an American worker keeps, controls, and invests 100% of his retirement money at his own discretion, it is not a cut in benefits.  It is a restoration of private property to its rightful owner.

There is no better time to enact entitlement reform than now.  Here are the latest polling numbers from Rasmussen on all of the major policy issues:

Surveys of 1,000 Likely Voters
January 11-14, 2010

Issue	Democrats	Republicans
Economy	39%	48%
Health Care	38%	52%
Education	38%	40%
Iraq	37%	45%
Immigration	37%	48%
Social Security	36%	46%
Afghanistan	36%	44%
Government Ethics	35%	43%
National Security	35%	50%
Taxes	33%	52%

I don't recall a time when Republicans were leading Democrats on issues such as Social Security, Health Care, and Education.  If we are not willing to tackle entitlement spending (which cuts to the core of our constitutional belief in private ownership), then we will never balance the budget.  If we fail to do it now, we will never have the intransigence to implement such reforms in the future.  Godspeed, House conservatives!