The Case for Across-the-Board Spending Cuts

April 4, 2013

Given the dire state of the U.S. fiscal situation, a combination of tax reform and spending cuts will encourage economic growth. While many have proposed targeted cuts, only across-the-board cuts will make a realistic impact on spending, says Jeff Bergner of the Mercatus Center.

  • Across-the-board spending cuts can occur in two forms, either as a specific dollar amount decrease to a budget or as a percentage reduction in a budget.
  • The latter is preferable, because a flat $100 billion cut would harm some programs more than others, depending on size, while a 10 percent cut would be more equitable.
  • The cuts can apply to actual spending or curb growth.

Opponents of across-the-board cuts claim that even the slightest cut to some programs would do great harm, even though virtually every government program, from defense to Social Security, has grown by an average of 35 percent between 2008 and 2013.

  • Opponents also believe that across-the-board cuts are unfair because some programs don't deserve to be cut while others do, though there is no consensus on which programs qualify for cuts.
  • Across-the-board cuts have also been painted as ineffective because they do not touch entitlement programs, but there is no reason why they can't be extended to Medicare or Medicaid.
  • Others argue that the proposed cuts are difficult to implement because of the legislative process, but applying the cuts to broad budget categories and allowing committees to decide which programs receive deductions would solve that problem.

Targeted reductions will not work because many laws or programs that are currently in place have been supported by constituencies who lobbied to have them created and pushed to have them expanded. If targeted cuts were easy to achieve, lawmakers would have already made the necessary cuts. The reality is that for any targeted cut, there will be a constituency unhappy with the proposed cut.

For this reason, across-the-board cuts are not "thoughtless" or "draconian," but the only cuts that would prove the most equitable and the most feasible.

Source: Jeff Bergner, "The Case for Across-the-Board Spending Cuts," Mercatus Center, March 26, 2013.

 

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