The Battle of Budget Ideas Rages On

Veronique  de Rugy
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Posted: Jun 01, 2017 12:01 AM
The Battle of Budget Ideas Rages On
Love it or hate it, the recently proposed 2018 federal budget is dead on arrival. Some say that's because it's unrealistic. Some contend that it's too harsh on discretionary spending and/or too soft on calling for needed reform to some mandatory programs. And others say Republicans are never serious about cutting spending. Nonetheless, this budget, as bad as it is, should get credit for proposing a long list of targeted program cuts alongside justification for the requests.

The battle of ideas is important. If Nobel Prize winner Milton Friedman had never made the case and fought for school choice, many kids today would still be stuck in their falling public schools. If Nobel laureate Ronald Coase didn't defend his idea that we should auction the airwaves, there would be less innovation in the wireless telecom sector today. If no one had fought for marijuana legalization and marriage equality, neither of these battles would have been won, either. Of course, winning the battle of ideas takes time, decades even. But it starts with fighting and making the case for what you believe.

I'm not equating cuts on the discretionary side of the budget to halting incarceration for smoking pot. But no battle is too small to fight. There are so many programs paid for at the federal level that should be left to state and private actors, and many more programs simply fail to accomplish their goals. It's a big mess.

So as bad as this budget is -- with its leniency toward Medicare and Social Security, its overall overspending, its military buildup, its whimsical growth assumptions and its frankly problematic revenue projections -- I'm glad it initiates the hard battle of calling for the end of or cuts to some federal programs. Here are a few examples:

The rural business and cooperative service programs in the U.S. Department of Agriculture would be eliminated. As the budget correctly states, "these programs have not been able to demonstrate that they meet the broader goals of reducing rural poverty, out-migration, or unemployment." In addition, the Government Accountability Office and the USDA's own inspectors general have been repeatedly warned about duplication, inefficiency and severe management failures. The whole department should be eliminated for its rampant cronyism, but let's start with these programs.

The Economic Development Administration in the Department of Commerce would be terminated. If you can't get rid of the whole department, the EDA is a good start. A fiscal black hole and a relic of the 1960s, the program opened the gates of federal intervention into local affairs. Its grants are highly duplicative of grants extended by other agencies. Its spending is driven by politics rather than merit or need. And it's legendary for fraud and waste. Many GAO reports have found EDA job creation claims to be meritless or, at best, inconclusive. It needs to go.

The Department of Homeland Security's Transportation Security Administration law enforcement grants would be eliminated. Created to incentivize state "and local law enforcement entities to provide law enforcement at airports by partially reimbursing those entities," these grants are no long needed, as state "and local jurisdictions have had plenty of time to adjust and reprioritize resources," the budget explains.

Occupational Safety and Health Administration training grants at the Department of Labor would also be terminated. These grants are supposed to promote safety training for workers, even though there is no evidence that they do. OSHA should be eliminated along with these grants. The Cato Handbook for Policymakers notes, "The rate of workplace fatalities has been falling for more than a half century; workers' compensation laws and liability lawsuits are a greater incentive than OSHA rules."

The Overseas Private Investment Corp. would be nixed, too. (Yea!) The crony agency distorts the capital market and displaces the private sector to encourage some exporters to invest in emerging markets at the expense of everyone else. I only wish the budget had slated the Export-Import Bank for termination, too.

Contributions to international organizations would be cut by $780 million. This makes me particularly happy because it's a chance to keep the Organization for Economic Cooperation and Development bureaucrats from continuing their anti-tax competition and anti-privacy propaganda, which is all paid for by American taxpayers.

There are many more worthy terminations and cuts in this budget. It is an otherwise-disappointing budget, but because I'm in an optimistic mood today, I'll say that it's a small step in the right direction to fight the battle of ideas against wasteful federal spending. Let's hope that the next time around, the budget will extend this exercise to defense spending and Medicare.