After months wrangling with the budget in committees and in back rooms and on the floor of the House and Senate, your representatives in Washington gloriously managed to cut all the fat they felt they could for a grand total of about $42 billion as a special Christmas present last week, presented in the form of the Budget Reconciliation Act, which will theoretically put the Fiscal Year 2006 Budget in its final form to be voted on in January.
The White House and your representatives are heralding that as a major achievement. What they seem to have missed is that the budget is still enormously larger than it ought to be at a whopping total of over $2.5 trillion which continues to include a deficit of almost $300 billion.
Not everyone is as happy as the Washington fat cats. Some on the left are crying that we should end the war in Iraq and repeal ‘tax cuts for the rich’ to save money. Some on the right are pointing out that over half the budget goes to social programs for senior citizens, though I don’t think they’re ready for the logical solution of euthanasia parlors quite yet. What neither side seems willing to do is make the simple, obvious cuts which would balance the budget and do little or no harm – some might even help the economy.
To give credit where it is due, the reconciliation bill has some meaningful cuts in it – or at least a few million here and there. Plus President Bush did his best to cut the budget when he first sent it to Congress, with $20 billion in savings already in the mix from over 200 budget cuts and 99 entirely meaningless programs completely eliminated.
One of the best cuts is the elimination of the Byrd Amendment subsidies, a huge piece of pork put into the federal budget in 2000 by Senator Robert Byrd (D-WV) which takes money from import duties on certain products and actually pays the money to the uncompetitive US companies the duties protect. So far it’s redirected over a billion dollars to only 5 companies, with the vast majority going to a single company. Another good cut is the long delayed elimination of the famous $230 million Bridge to Nowhere, a pet project of Senator Ted Stevens (R-Alaska) to build a bridge to an island with 50 inhabitants who didn’t want a bridge in the first place, putting a local ferry service out of business in the process. They also axed another less well known bridge to a sparsely inhabited island in Alaska at about the same price.
But the truth is that although these pet projects and little bits of pork are numerous – 5800 of them at last count – they add up to only $2.4 billion, less than .1% – that’s 1/10th of one percent – of the total budget. Even cutting all of them would make almost no difference at all, though it is nice to see some of them go for purely symbolic reasons.
But here are five cuts which could balance the budget and do very little harm.
• Farm Subsidies – A total of $120 billion is being paid to farmers not to grow crops. Everyone has known we need to cut subsidies for decades. Even the Europeans are considering cutting their farm subsidies. Yet the total value of these subsidies has risen by a factor of 400% during the Bush administration. That’s beyond ridiculous. Most of these subsidies go to huge agrobusinesses who may contribute mightily to our food supply, but don’t need the money. The entire program was originally conceived to help out the small farmer, but the fact is that small farmers have a very hard time qualifying for any of the major subsidies, and the big agrobusinesses which get the subsidies are given an unfair advantage and are forcing the few remaining small farmers into bankruptcy. This program needs to end now While we’re at it, let’s also cut the $500 million a year in milk subsidies going to a very small number of giant milk producers. Savings: $120 billion.
• Medicare – The reconciliation bill actually makes some modest cuts in Medicaid, but leaves this much more bloated program untouched. Medicare accounts for $385 billion in the budget, and that is a huge increase over last year, mostly because of the confusing new prescription drug benefit which carries substantial administrative costs and costs for the actual drug subsidies. This new addition to an already overblown program should never have been passed and needs to be gotten rid of. Some method of bringing pressure to bear on drug companies to lower prices for seniors, such as opening up access to foreign drug sources to encourage competition is a more practical solution to providing reasonably priced phamaceuticals to seniors. Savings: $53 billion.
• Social Security – Screw the old folks. Something has to be done about it. I don’t really hate old people, but every old person benefiting from the current system is making things worse for generations of old people yet to come, and they’re all equally deserving of our support. Social Security is the single biggest problem in the budget this year and it’s goig to be an even bigger problem with every coming year, ballooning as time passes. In the current budget it’s $546 billion. That needs to be cut by a minimum of 5% per year for the next 10 years, which can be accomplished by offering the opportunity to opt out of the system to younger citizens who will give up all of their past payments into the system and half of their future payments into the system in order to be able to invest the remaining half of their future payments in approved mutual funds. This will make the system solvent in about 20 years. Savings: $27 billion.
• Corporate Welfare – Corporate welfare takes a number of forms, adding up to a total of over $120 billion dollars, but at least $80 billion of that is payments direct to companies to underwrite certain types of research projects, develop particular products or to encourage them to do business in particular ways. Some of that may be necessary, but an awful lot of it can be cut. The administration actually has a remarkably good record on trying to cut corporate welfare, but whenever they propose a set of cuts (usually about 10% in each budget) the money gets added back in by legislators. The worst examples of corporate welfare are subsidies to pharmaceutical companies to research drugs they could develop for profit anyway, to inherently profitable businesses like the Import-Export Bank, and to research grant programs like the Small Business Innovative Research Program and the Advanced Technology Program. If something is worth researching there ought to be a profit to be made from the fruits of that research. The threat of cuts to their subsidies and grants might persuade pharmaceutical companies to lower their prices for seniors, and a minimum overall 20% cut to corporate welfare programs of all sorts seems like a bare minimum to start with, and it ought to be scaled up every year. Savings $24 billion.
• The War on Drugs – It does nothing but harm to individuals and society. It’s time to end it. Since it was started coca production in South America has increased tenfold, more drugs are available cheaper on our streets than ever before, and enormous amounts of money have been wasted. Cut every single program associated with the war on drugs, from the ONDCP on down to subsidies for local law enforcement. Savings $50 billion.
So, there you’ve got $274 billion in additional budget cuts with little or no real harm done – no negation of the economic recovery by raising taxes and no death camps for old people. Add that to the $42 billion cut by Congress and you’ve got $316 billion. Yikes, that’s $2 billion more than the projected deficit. I think I just created a budget surplus. Go me!
Now why don’t the geniuses we keep sending back to Washington year after year have the brains or the guts to do the same thing?
Excellent guide to proposed Budget Cuts: Reconciiation Guide.
Congressional Budget Office Budget Projections
Citizens Against Government Waste Statement on Budget Reconciliation
Overview of Final Reconcilliation Bill in the Detroit Free Press
Actual Text of Budget Reconciliation Act