The public is conflicted about a tax cut. An overwhelming majority want one but an equally overwhelming majority want to use the projected surplus to pay down the national debt. Here's a way to have our tax cut cake and eat it, too: Cut spending, along with taxes.
Everyone understands and opposes wasteful spending. From childhood, most of us were taught to clean our plates and not waste food. Why shouldn't the same apply to government spending?
Citizens Against Government Waste (CAGW) will soon publish its annual "Pig Book,'' a compilation of what it sees as wasteful and unnecessary spending. If government has fewer programs on which to spend our money, it will need less money.
CAGW has calculated that if all of its recommendations are implemented, taxpayers would save a staggering $1.2 trillion over the next five years, an amount approximating President Bush's proposed $1.6 trillion tax cut.
First, some little things. A 1996 Farm Bill gave farmers the freedom to grow almost anything except peanuts, according to the CAGW Web site. "Only farmers who own or lease a production quota can legally grow peanuts to be sold for edible use,'' CAGW says. The government supports peanut prices with $610 per ton of our money, compared to the world price of $350 per ton, creating a domestic peanut price 74.3 percent higher than the world market price. This is really a peanut tax costing American consumers as much as $500 million annually.
In 1997, President Clinton announced the America Reads program to combat illiteracy. The program recruits work-study college students to help children read by the end of third grade. It costs $260 million a year but has had a small response. There are already 14 other literacy programs (not to mention those within our subsidized public schools), costing taxpayers $8 billion, says CAGW. That's reason enough to eliminate America Reads.
Now for some bigger things. Why should the American steel industry continue to receive $500 million a year in subsidies through a program inaugurated in 1979¿ In addition, the protectionist policies of the government force consumers to pay billions in inflated costs. The steel industry has effectively shut out foreign competition.
The Economic Development Administration (EDA) should be scrapped. Begun in 1965 to generate new jobs and stimulate growth in economically distressed areas, many of those cities-- such as Raleigh-Durham and Fort Worth -- now have unemployment figures below the national average. CAGW says that one of the more outrageous grants ($500,000) in 1995 went "to help the NFL's Carolina Panthers build a practice facility at the private Wofford College in Spartanburg, S.C. -- a city located in what the local newspaper has called 'the most economically booming county in the state.'''
Multi-million dollar payments continue to subsidize U.S. companies like Burger King, Dole, Purina and Sunkist to expand their market share overseas. There is no evidence that the Market Access Program works. Why should taxpayers pay expenses for commercial companies? If eliminated, the estimated savings, according to CAGW: $348 million over five years.
The Rural Utilities Service continues to subsidize telephone and electrical services in such "depressed'' areas as Vail, Colo., Hilton Head, S.C., and Potomac, Md., where the rich live and play. The initial mission of this agency was to assist the nation's rural areas with the development of utility infrastructure. This mission has been accomplished but, like so many government programs, success (or failure) does not mean a program will end.
Many energy programs could be privatized, including the Tennessee Valley Authority, saving $2.5 billion over five years. The power marketing administrations, established in the 1930s to provide remote areas of the country with access to electricity, which is sold at below market rates with the government paying the difference, should be scrapped. As we have seen in California, such an approach upsets the laws of supply and demand, sometimes leading to energy crises and reducing incentives for customers to use electricity wisely.
There are scores of other examples of wasteful or unneeded spending that could be slashed. They are available on the CAGW Web page (http://www.govt-waste.org/). A tax cut will go down easier with voters (though less with politicians who have constituencies for all of this spending) if the government beast is put on a diet.