RSC Spending Plan a Good Start, More is Needed

From the diaries by Erick

The Republican Study Committee, the conservative House caucus, released a bill this week to cut $2.5 trillion in spending over the next 10 years.  This plan, which is summarized in a two page document, includes cuts in specific Obama programs, as well as the elimination of old programs and subsidies.

The main objective of the RSC plan is to pass a CR that caps non defense/security discretionary spending for the remainder of FY 2011 to 2008 spending levels.  Then, beginning in 2012, this bill would slash discretionary spending to 2006 levels and would eliminate automatic increases for inflation.  The Spending Reduction Act of 2011 also calls for cuts in federal employees and their salaries, the privatization of Freddie Mac and Fannie Mae, and the sequestering of the remaining stimulus funds.  Finally, the plan calls for the elimination of 56 programs, mandates, or subsidies that will save an additional $330 billion over 10 years.

While the RSC plan is a bold and prudent beginning, there is much more work to be done.  It’s important to note that recent budget deficits have skyrocketed to a gargantuan $1.3-$1.4 trillion.  This budget plan would only shave off an average of $100 billion per year.  Here are some other programs that should be eliminated as we aim for a balanced budget.  Many of these cuts will probably be included in the new Welfare Reform Act that the RSC plans to unveil in the coming days.

These figures represent annual budget cuts from eliminating or restructuring programs that were identified and compiled by Brian Riedl of the Heritage Foundation.  I highlighted the suggestions that were already adopted by the RSC in their Spending Reduction Act.

Spending Cuts for FY 2012
(in millions of dollars)
Replace farm subsidies with Farmer Savings Accounts and improved crop insurance.
Eliminate the Foreign Agriculture Service.
Merge all four agriculture outreach and research agencies and cut their budget in half.
Fund the Food Safety and Inspection Service with user fees.
Eliminate business subsidies from the National Institute of Standards and Technology.
Community Development
Eliminate the Community Development Block Grant program.
Eliminate the Rural Utilities Service.
Eliminate the Economic Development Administration.
Eliminate NeighborWorks America (formerly the Neighborhood Reinvestment Corporation).
Consolidate the Rural Housing and Development Programs and convert them into block grants.
Eliminate the Appalachian Regional Commission.
Eliminate the Denali Commission.
Eliminate the Minority Development Business Agency.
Eliminate the Delta Regional Authority.
Return Pell Grants to their 2009 funding level of $24 billion, which is still double the 2007 level.
Trim Head Start by $2 billion and convert it into vouchers.
Scale back the Education Department bureaucracy.
Eliminate dozens of small and duplicative education grants.
Eliminate state grants for Safe and Drug-Free Schools and Communities.
Energy and the Environment
Reduce energy subsidies for commercialization and some research activities.
Block grant and devolve Environmental Protection Agency grant programs.
Restructure the Power Marketing Administrations to charge market-based rates.
Eliminate the Science to Achieve Results Program.
Government Reform
Halve federal program payment errors by 2012, especially by reducing Medicare errors and earned income tax credit errors.
Tighten oversight by spending $5 billion on new resources, such as updated computer systems, and then recover $49 billion in payment errors.
Rescind unobligated balances after 36 months.
Halve the $25 billion spent to maintain vacant federal properties.
Cut the federal employee travel budget to $4 billion (half of FY 2000 spending).
Freeze federal pay until it can be reformed.
Suspend acquisition of federal office space.
Trim the federal vehicle fleet by 20 percent (a reduction of 100,000 vehicles).
Cut the House and Senate budgets back to the 2008 level of $2.2 billion.
Eliminate the Presidential Election Campaign Fund.
Tighten controls on federal employee credit cards and cut down on delinquencies.
Require federal employees to fly coach on domestic flights.
Health Care
Reform Medigap.
Repeal Obamacare (larger savings in later years).
Require Medicare home health co-payments.
Eliminate the Maternal and Child Health Block Grant.
Eliminate Health Professions grants.
Eliminate Title X Family Planning.
Eliminate the National Health Service Corps.
Repeal Rural Health Outreach and Flexibility grants.
Homeland Security
Eliminate most homeland security grants to states and allow states to finance their own programs.
Income Security
Better enforce eligibility requirements for food stamps.
Open the coastal plain of the Arctic National Wildlife Refuge to leasing.
(The savings are leasing revenues, which are classified as negative spending in the federal budget.)
Suspend federal land purchases.
Eliminate the Development Assistance Program.
Eliminate the State Department’s education and cultural exchange programs.
Eliminate the International Trade Administration’s trade promotion activities or charge the beneficiaries.
Eliminate the Democracy Fund.
Eliminate the International Trade Commission and transfer oversight of intellectual property rights to the Treasury Department.
Eliminate the Trade and Development Agency.
Eliminate the Overseas Private Investment Corporation.
Eliminate the East–West Center.
Eliminate the United States Institute of Peace.
Eliminate the Japan–United States Friendship Commission.
Eliminate all Justice Department grants except those from the Bureau of Justice Statistics and the National Institute of Justice,
thereby empowering states to finance their own justice programs.
Eliminate the Legal Services Corporation.
Eliminate the Justice Department’s Community Relations Service.
Eliminate the duplicative Office of National Drug Control Policy.
Reduce funding for the Justice Department’s Civil Rights Division by 20 percent
because of its policy against race-neutral enforcement of the law.
Eliminate the State Justice Institute.
Eliminate failed federal job training programs.
Eliminate the ineffective Job Corps.
Eliminate the Senior Community Service Employment Program.
National Science Foundation
Reduce National Science Foundation funding to 2008 levels.
Eliminate National Science Foundation spending on elementary and secondary education.
Devolve the federal highway program and most transit spending to the states. (partially addressed in RSC plan)
Privatize Amtrak.
Eliminate grants to large and medium-sized hub airports.
Eliminate the Maritime Administration.
Eliminate the Essential Air Service Program.
Eliminate the additional child refundable credit.
Eliminate the Community Development Financial Institutions Fund.
Cap increases in Department of Veterans Affairs health care spending.
Reduce Veterans’ Disability Compensation to account for Social Security Disability Insurance payments.
Cross-Agency and Other
Repeal unspent stimulus spending.
Switch to using the “Superlative CPI” in funding calculations.
Repeal the Davis–Bacon Act.
Eliminate Federal Communications Commission funding for school Internet service.
Ban project labor agreements on all federally funded construction projects.
Eliminate the Small Business Administration, which unnecessarily intervenes in free markets.
Eliminate the National Community Service programs, such as AmeriCorps.
Eliminate the Institute of Museum Services and Library Services.
Eliminate the National Endowment for the Humanities.
Eliminate the National Endowment for the Arts.
Eliminate Army Corps of Engineers funding for beach replenishment projects.
Eliminate the Commission of Fine Arts.
Eliminate the National Capital Planning Commission.
Eliminate the Advisory Council on Historic Preservation.
$343,207 million

As you can see, the Republican plan has touched upon many of the suggested cuts by the Heritage Foundation.  There are also some cuts that are mentioned in the RSC plan that generally cover some other programs that are listed above.  However, there are still billions of dollars in cuts that need to be made, especially in the realm of welfare and “tax credit” handouts to those who don’t pay taxes.  There are also several agencies in the Departments of Agriculture, Education, Energy, and Labor that need to be ameliorated or eliminated.  We look forward to RSC Chairman Jim Jordan’s welfare reform bill which promises to be a second act of this budget proposal.

Unfortunately, even if we take the scythe to every gratuitous component of discretionary spending, we will never balance the budget unless we enact entitlement reform.  Discretionary spending will only account for $1.3-$1.4 trillion of the estimated $3.7 trillion in total FY 2011 outlays.  In other words, the budget deficit is roughly as large as the sum total of all discretionary spending including defense, homeland security, and veterans expenses.  We simply must deal with the $2.3 trillion in annual entitlement spending if we are going to achieve any budget solvency.

Although many Republicans blithely shy away from entitlement reform, now is the time to push for privatization of Social Security and Medicare and the complete overhaul of Medicaid.  We need to stop the left and the media from framing it as “cuts in SS and Medicare”.  That disingenuous portrayal of entitlement reform  implies that seniors will be denied a percentage of their benefits even while contributing the same amount.  Instead, we need to advocate the empowerment of the individual through private ownership of their own destiny.  We must certainly honor all of the obligations to those who paid into the system.  But there must be a way out of this government control of retirement for younger workers.  When an American worker keeps, controls, and invests 100% of his retirement money at his own discretion, it is not a cut in benefits.  It is a restoration of private property to its rightful owner.

There is no better time to enact entitlement reform than now.  Here are the latest polling numbers from Rasmussen on all of the major policy issues:

Surveys of 1,000 Likely Voters
January 11-14, 2010

Issue Democrats Republicans
Economy 39% 48%
Health Care 38% 52%
Education 38% 40%
Iraq 37% 45%
Immigration 37% 48%
Social Security 36% 46%
Afghanistan 36% 44%
Government Ethics 35% 43%
National Security 35% 50%
Taxes 33% 52%

I don’t recall a time when Republicans were leading Democrats on issues such as Social Security, Health Care, and Education.  If we are not willing to tackle entitlement spending (which cuts to the core of our constitutional belief in private ownership), then we will never balance the budget.  If we fail to do it now, we will never have the intransigence to implement such reforms in the future.  Godspeed, House conservatives!

Cross-posted to Red Meat Conservative

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