Six Steps to A Smaller, Leaner Government

One of the biggest and most unfortunate outcomes of the liberal welfare state which, according to Obama’s inaugural speech is his vision of America, is the growth of bureaucracy. The Washington Post recently ran an article titled, “The One the Republicans Let Get Away,” which was about former Indiana governor Mitch Daniels. While steeling the state against the recession, Daniels managed to cut taxes, attract businesses and jobs, turn a budget deficit into a surplus and create a $2 billion “rainy day fund” while decreasing the government bureaucracy by 19%. If it can be done in Indiana, many of these ideas can be transported to the national stage.

While many point to Roosevelt’s policies under the New Deal as the start of the problem, a better starting point is Johnson’s Great Society. The rise of the public sector in the 1960s and 1970s had three distinct features: (1) the assumption of vast authority by the US government, (2) regulation becoming the typical activity of government and (3) Congress assuming an administrative function. Under Johnson’s Great Society, the American government assumed responsibility for the social and economic well-being of every American. Therefore, it had to introduce programs for managing these relations. From 1964 to 1974, government greatly expanded. The number of just commercial regulatory agencies increased from 50 to 72. Thirty-five of those original 50 agencies were “reformed.” Because these agencies regulated society-wide issues, after 1975 government’s primary role was to regulate, not necessarily legislate which is a clear abrogation of it’s constitutional responsibilities.

After 1964, we see the growth of the government workforce resulting in vast public expenditures and a burgeoning national debt. In 1960, there were 2.35 million federal workers which grew to 2.91 million by 1970 and then dropped slightly to 2.83 million by 1980. However, when ancillary agencies and private contractors are factored in, the total number approaches 13 million. The number of “off-budget” employees has increased under both Democratic and Republican leadership. This consuming expansion of the federal government comes at an incredible price- the domination of the Federal government over state and local governments. This was never, ever the intent of our Founding Fathers.

Several areas were never historically the purview of the Federal government. Public education is a perfect example and the bulk of innovation and administration occurred at the local level. Unlike many state constitutions, the US Constitution does not mandate public education. It is the estimated that the average school district budget receives about 9% of its funding from the Federal government, but that same government exerts about 30% control. For that minimal financial contribution, local schools are saddled with unfunded mandates and regulations. Practically every mile of every sewer line in this country requires EPA approval. About 50-90% of a state’s policing power in workplace safety is overlapped by OSHA. From this, three trends are discernible. First, very few enterprises can exist in this country without authorization from some Federal, central authority. Second, these entities exert tremendous authority in relation to their financial contribution. And third, a central power cannot foresee all problems and promulgate regulations quick enough to address these “problems.” That is because, as Alexis de Toqueville observed long ago, that was never the purpose of the federal government.

While Liberals and Democrats decry gridlock, they need only look in the mirror for creating the morass which exists. According to the agenda of Democrats dating back to 1964, local and parochial interests were to be subordinated to the national interest. In fact, this subordination never materialized and the local, parochial interests came to the national center instead. Unfortunately, the only way to break through this gridlock is not through compromise, as the Constitution almost demands, but through deal-making. Instead of encouraging consensus to address matters of truly national importance, everything (to liberals and Democrats) is of national importance. Sometimes, what may be “local” interests are legitimately of national importance. For example, the systemic and pervasive discrimination that was Jim Crow was a “local” problem (primarily the South) which required a national solution (the Civil Rights Act of 1964). Admittedly, that law has its flaws and racial discrimination was and is not unique to the South.

The result of this move towards bureaucracy is that regulations soon replaced laws. Instead of Congress passing laws, they are often reacting to regulations. The recent decision by the EPA to regulate carbon dioxide as an air pollutant is a perfect example. Through this grant of power to unelected officials, Congress now needs to scramble to undo this ridiculous idea. And the bulk of the modern Congress, especially since 2006, is expanding the bureaucracy and expanding the powers of the existing bureaucracy. Just look at the monstrosity that is Obamacare and Frank-Dodd. There are two guarantees from this “legislation:” (1) the bureaucracy will expand and (2) they will not solve a single problem.

Unfortunately, the Democratic Party is still addressing the problems of the Great Depression using Great Society thinking. They are using the same regulatory paradigm that has proven to be a failure in the past. Look and examine their responses and their priorities- health care, financial reform, clean air, poverty, childhood nutrition, ad nauseum. You name the problem and liberals and Democrats will make it a national problem. Conversely, true conservatives have stayed relatively on target regarding national priorities- national defense and the national economy vis-a-vis tax and regulatory policy.

An unmentioned problem with this trend to nationalize every problem is that of government expenditures. An unpaved road in Mississippi or an over-burdened interchange in California becomes a national problem when you have a Transportation Department. Decay in cities like Detroit or Newark become a national problem when you have a Housing and Urban Development Department. A low scoring set of students in Alabama becomes a national problem when you have an Education Department. A displaced factory worker in Seattle becomes a national problem when you have a Labor Department. And on it goes.

So, what is the solution? We cannot turn back the hands of time and just wish away every agency, commission, department or bureaucracy. But we can, at a minimum, eliminate duplicate programs and functions. We can and should refuse funding for programs that are not effective or that have outlived their usefulness. We can begin the slow transition of these functions back to state and local governments where they rightfully belong. At the national level, if the funding flow-through to education is 9%, then the regulatory burden should be 9%. One can go through every department and effectively phase out the growth in recent years. For example, within the Interior Department, partial privatization of national parks is a worthy idea. In the Labor Department, transferring job training programs to the states is a good idea. Likewise, many HHS programs can revert to the states through block grants. Housing and urban development should be a local or state program exclusively. Congress should set specific parameters with the Executive branch agencies and then stick to those parameters, mandates, and funding. And, of course, earmarking and pork barrel spending needs to eradicated. Despite the incredible federal investment in areas like education, welfare, urban affairs and transportation it has not eradicated poor test scores, poverty, urban blight and flight, or created a top notch transportation system. Too often, the solution has been knee-jerk creation of yet another bureaucracy and both sides are guilty.

The best government is that which is closest to the people. That is basic civics 101. Local governments can solve problems more efficiently than the national government. Let the national government take care of truly national problems- defense, international affairs and the national economy via tax and regulatory reform. Some may argue that this is kicking the problem down the food chain, including the finances. The solution during the transitional period is block grants to the states. And there will be hardships, but they are hardships that would have enormous rewards down the road.

Pay freezes as a way to decrease the bureaucracy through attrition is simply window dressing and something Obama supposedly did. But it does little to solve the problem in the short term and does not address the long-term institutional problems. The federal government must be cognizant of the fact they compete with the private sector for workers. Instead of offering unsustainable benefit packages, innovative recruitment programs need to be considered. In order to meet a “labor need,” the best program the federal government has with respect to recruitment is the military’s ROTC program. It can serve as a template for expansion into other areas.

There needs to be a blanket moratorium on the creation of new bureaucracies. Obamacare and Frank-Dodd would fail this threshold. The “logical” solution for a Democrat is to create another bureaucracy. In fact, they have suggested a bureaucracy to study how to decrease bureaucracy.

All federal programs need to be thoroughly reviewed, better coordinated or eliminated. Research indicated that this was proposed and studied in 1995. The GAO determined that $350 billion was spent annually on redundant or antiquated programs. We spend over $20 billion annually on 165 job training programs spread across 15 agencies. We have over 300 economic development programs run by 13 agencies. Over $100 billion is spent annually on over 750 educational programs administered by 49 agencies of which 30% of that spending is for overhead alone. The drug war costs $15 billion annually on 70 programs run by 57 agencies. The US Geologic Survey was formed in 1879 to map the nation’s natural resources. After over 300,000 maps produced, they have done their job. But Congress maintained funding and changed their task- to monitor temperature stations in order to justify global warming. Of course, NOAA, the National Weather Service and NASA do the same, not to mention the millions of thermometers on porches across the country.

The list goes on. The Rural Utilities Service was formed to bring electricity and telephone service to rural areas- check! The TVA actually had to turn away unwanted funds one year. There are 14 programs for foreign study abroad, 20 programs to eradicate invasive plant and animal species, 17 offender re-entry programs (five agencies; over $250 million a year), and nine programs dedicated to biofuels costing $300 million a year. Printing the Congressional Record- a service available on-line- costs $28 million a year. The government owns over 55,000 unused or under-utilized buildings valued at $96 million that we spend $18 million a year to maintain. The GAO estimates that the government spends $123 billion annually on programs that have NO effect on the targeted population. Cost over-runs on weapons systems in the Defense Department cost $295 billion in just one three-year period.

The larger the bureaucracy, the greater the chance for waste, fraud, and abuse. No amount of Congressional oversight and speech-giving will do a damn thing until the bureaucracy is reduced. One can almost predict that “savings from fraud and abuse” will be figured into any spending reduction strategy as this year progresses. That is a song we have heard before. The solution has six prongs. First, programs should be diverted to the states with funding through block grants, especially where the federal program overlaps with duplicate state programs. Second, certain programs should be directed to the private sector who can more efficiently run these programs. A perfect example: the National Park Service once spent $600,000 per unit to build housing for employees at Yosemite National Park. If done by a private entity, the estimated cost would have been $102,000 per unit. The federal government subsidizes Amtrak to the tune of $47 per rider annually.

Third, for programs maintained by the Federal government, strict rules for eligibility that affect the targeted population needs to be enforced. It is estimated that the federal government wastes $72 billion annually through improper payments. Fourth, outdated and unnecessary programs and agencies must be eliminated outright (example: the US Geologic Survey). Fifth, duplicate programs must be merged, simplified or just plain eliminated. When all this achieved, then and only then can the 6th prong- the elimination of fraud, abuse, and mismanagement- be put into place. Using a mechanism along the lines of the Base Realignment and Closing Commission- if Congress likely lacks the political fortitude- is a worthy idea.

Make no mistake that this would take political courage and likely create some hardships along the way. No doubt, people like Katy Couric and Brian Williams will fall over each other to highlight these hardships as if the exception IS the norm as they try to “put a face” on these hardships. Rachel Maddow and Ed Schultz will come through your television set decrying the evil Republican policies. Some liberal commentators may actually self-combust, although Chris Matthews will be trying to get that tingle out of his leg. But, no one said it better than the man who demonstrated that it can be done, Mitch Daniels (and I paraphrase): “You’d be surprised how little government people really need.”

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