NCPA - National Center for Policy Analysis

Plenty Of Room For Spending Cuts

August 9, 1996

Critics say Bob Dole's tax cuts will reduce federal revenues and increase the federal deficit unless federal spending is cut. By some estimates, Dole's plan would reduce federal revenues by $550 billion over six years.

Budget analysts find plenty of places for savings, without even touching entitlements and military spending:

  • Save $20 billion by eliminating the Commerce Department and shifting the Census Bureau, the Patent and Trademark Office and a few other functions elsewhere.
  • Save $30 billion by terminating the Department of Energy, moving some atomic energy defense work to the Pentagon.
  • Realize $90 billion by slicing the Education Department's budget by at least one-half (even the liberal Washington Post noted in a 1994 editorial that America's schools aren't noticeably better because the department was created).
  • Although the Department of Housing and Urban Development could be completely eliminated, merely halving it would save $95 billion.

Killing HUD and Education outright would save $185 billion more.

These are certainly not the only areas ripe for reduction. We could save another $50 billion by bringing home and demobilizing just half of our 100,000 troops in Europe. Ending foreign aid would save $70 billion. In addition, we could:

  • Help restore a free market in agriculture and save $120 billion by eliminating at least the one-third of the Department of Agriculture's budget that goes for farm subsidies.
  • End corporate subsidy programs in the Department of Transportation and realize $70 billion in savings.
  • Sell $20 billion a year in federal assets -- including some of the one-third of all U.S. lands the government owns -- for $120 billion in six years.
  • Save $3 billion by eliminating the Small Business Administration, which benefits fewer than one-half of 1 percent of U.S. small businesses.

These savings do not include interest savings from lower deficits, nor any increased revenue from the supply-side effect of cuts in marginal tax rates.

Source: Dean Stansel (Cato Institute), "Can We Afford the Dole Tax-Cut Plan? Investor's Business Daily, August 9, 1996.


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