NCPA - National Center for Policy Analysis

Cut Spending By…Cutting Spending

November 20, 2013

House and Senate budget conferees have begun meeting in an attempt to head off another potential government shutdown when the latest continuing resolution expires, on January 15. In theory, the committee is supposed to report no later than December 13, but few on Capitol Hill expect them to come up with a deal by that deadline. As usual, the two parties are at loggerheads over taxes and spending, says Michael Tanner, a senior fellow at the Cato Institute.

Tanner lays out a plan that balances the budget without tax increases and reduces our dangerously high debt burden, by cutting $3 trillion over the next 10 years. It builds on good ideas from both Republicans and Democrats, liberals and conservatives, to expand individual freedom and reduce the burden of government.

  • Cut Corporate Welfare: Among the worst examples are agricultural subsidies, included in the "farm bill" currently making its way through a conference committee and energy subsidies, including such notorious boondoggles as Solyndra. Phasing out farm and energy subsidies would save $160 billion over the next 10 years.
  • More Privatization. Privatizing things done today by the government such as Amtrak, the Corps of Engineers, federal dams, airport screening and air-traffic control would save at least $110 billion.
  • Trim the Intelligence Budget: Cutting intelligence spending by 25 percent would not make us more vulnerable, and we'd save $110 billion.
  • End the Drug War: Experts across the political spectrum increasingly recognize that the War on Drugs has been as big a failure as the War on Poverty. Ending the federal drug war and returning drug policy to the states, where it belongs, would save $110 billion.
  • Reform Social Security: We should move to a system of personal accounts for retirement and disability. Meanwhile, the country could save $640 billion by indexing benefits to prices instead of wages, modestly raising the retirement age and trimming the disability rolls by 25 percent.
  • Stop Subsidizing State Governments, Especially for Education: Phasing out federal subsidies for K-12 schools would save $180 billion and free states to improve the quality of their own education systems.
  • Reform and Reduce Welfare: Programs such as food stamps should be turned over to the states. Phasing out just this one welfare program (federal food stamps) over 10 years would save $400 billion.
  • Reform Medicare: Restructure the program by directing payments to enrollees, not insurers or providers. Raising premiums and increasing cost-sharing would save $330 billion.

Tanner also recommends ending U.S. military outreach, which would save at least $200 billion, and block-granting Medicaid, which would save $760 billion if the grants' growth was limited to 5 percent a year.

Source: Michael Tanner, "Cut Spending by...Cutting Spending," National Review, November 6, 2013.


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