The GOP Challenge--Creating A Culture of Cuts

Lurita Doan

2/14/2011 3:55:51 PM - Lurita Doan

Smoke and mirrors management seems to be the usual Washington way to address the need for reduced federal spending. GOP leaders in congress have begun well, proposing $100 billion in cuts, but with national debt over $14,000,000,000,000.00, that's not really enough, not by a long shot.

Last November, voters made it clear that the country is tired of spending-as-usual in DC and that they are watching legislators in DC carefully to see what they are doing to trim the fat. During the past week, the White House floated some of their proposed budget cuts, but since these cuts are accompanied by proposals for two times the amount in spending, it doesn't look as if the White House got the message.

Budget cuts to the FY12 federal budget do not curtail current FY11 budget shortfalls. Furthermore, neither the GOP, nor Dems, in congress have addressed sufficiently what they plan to do about the $787 billion from the 2009 stimulus that has been absorbed into the baseline of the federal budget. Until all traces of that bloated buffet of earmarks is eliminated, it's hard to claim that congress is serious about cutting spending.

Much of the responsibility for fiscal discipline and budget cuts remains with the Office of Management and Budget. OMB's responsibility is to assist federal agencies prepare the comprehensive budget that the President submits, each year, to Congress. But, many agency heads are inexperienced with developing budgets. Many have no understanding of their agency's budget until the congressional budget-hearing briefing book is handed to them with the White House approved talking points.

Our nation's current budget development system is one of "incremental" budgeting. Agencies only document the need for increases over the previous year's budget, in a process that assumes that Congressional approval of a previous year's funding is sufficient justification to form the base funding of the upcoming year. There is little consideration of whether the funding was judiciously spent or if the program was successful.

The current format of the federal budget tends to be filled with projects--both old and new--siphoned from wish lists of federal, state and local officials, as well as the wish lists from well-positioned lobbying groups. Most dangerous of all, our current budgetary system does not account easily for one-time expenditures. As a result, today's benefit often becomes tomorrow's entitlement.

More than anything else, what is most needed now is for Congress and the White House to create a culture of cuts within the federal government. There are three critical steps that GOP and Dems need to adopt.

1. OMB needs to simplify the process. OMB needs to make it easier for agencies to understand how to cut programs and return money to the federal Treasury. Last year's memo from OMB on the federal budget, Circular A-123, was oblique in the extreme, and so lengthy, that it is unlikely than many in the federal government read, much less implemented, its statutes. Which may well have been OMB's intention.

2. Stop the pretense. President Obama has become the Posturer-In-Chief, preening and posturing and talking a good story about budget cuts, but doing little to show he is serious. Worse yet, old ambitions to reward political supporters and liberal faithful have merely been disguised as “investments”. In the recent State of the Union address, for example, the president made the mandatory noises about the deficit and "winning the future", but his speech was filled with hundreds of billions of dollars of additional expenditures to be paid for by American taxpayers.

3. It is especially important for legislators and the White House to champion those in the Administration who propose cuts, especially cuts of non-performing programs. No matter how small the amount, drip drop fills the pot, and, after all, the goal is to reduce spending over all of the government.

The good news is that both Congress and the White House know that American taxpayers are watching what they do on the budget, as never before. They also know that come November 2012, American taxpayers will have a way to make their displeasure known, if it seems as if the President or congress have just kicked the budget can further down the road and delayed the hard choices that everyone knows have to be made.