NCPA - National Center for Policy Analysis

Administration Efforts on Line-By-Line Budget Review

October 28, 2011

The United States' deep and structural financial imbalances are the result of decades of overpromising and overspending.  With a near-stagnant economy, an already heavy debt burden and the looming explosive growth of programs such as Medicare, Social Security and Medicaid, Washington must take significant steps to get spending under control.  While President Obama repeatedly promised on the campaign trail in 2008 that he would perform a line-by-line review of the federal budget, eliminating waste and cutting excess programs, it does not appear that any such process has yet taken place.  When it does, however, a few principles can help to guide the process that will ensure that the review is effective and comprehensive in addressing the nation's budgetary woes, says Veronique de Rugy, a senior research fellow at the Mercatus Center.

  • First, a reviewing committee must target and eliminate the most obvious examples of wasteful spending. These include duplicated programs or those that perform the same function, such as the 47 job training and 56 financial literacy programs that exist throughout the federal government.
  • Second, serious scrutiny must be given to those programs and agencies that are either unable or unwilling to assess their own effectiveness and impact.
  • Third, the government should recognize functions that it currently performs that can easily be passed onto the private sector. The Office of Management and Budget estimates that about half of all federal employees perform tasks that are not "inherently governmental," lending credence to the claim that government has expanded far beyond the realm of public necessity.
  • Finally, spending cuts should include cuts to federal programs that ought to be left to state and local governments. This encourages state-centric solutions, locally tailored policies that take advantage of region-specific circumstances and greater fiscal discipline.

These four principles together offer a comprehensive strategy for tackling the federal budget and implementing the necessary cuts to reverse the current direction of federal finances.

Source: Veronique de Rugy, "Administration Efforts on Line-By-Line Budget Review," Mercatus Center, October 5, 2011.

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