Budget Hawks, Enviro Doves Offer Budget Cuts
As the U.S. Congress prepares to weigh a new round of massive budget cuts mandated by this summer's deal on the deficit, some odd bedfellows offer a suite of suggestions for saving green by being green.
The Heartland Institute and Friends of the Earth don't agree on much of anything. Heartland, based in Chicago, is a free-market think tank widely viewed with suspicion by environmentalists. Friends, as its name suggests, is a progressive environmental advocacy group that's fought for action on climate change. Neither of them, though, can stand the federal government's flood insurance program.
It spends billions of dollars offering insurance to property owners at rates much kinder than they'd find on the private market. And it encourages the development of watersheds where no one should be living or farming in the first place.
The program is, in short, bad for taxpayers and the environment.
Uncle Sam's ledger is in fact full of similar initiatives that sit within the overlapping crosshairs of organizations that would otherwise never be caught on the same conference call — green groups, tax hawks and free-market hard-liners. Friends of the Earth, along with Taxpayers for Common Sense, has been compiling a list of such programs for 16 years. Their regular manifesto is called the Green Scissors report.
Wednesday, they released the latest version, produced with the added buy-in of the Heartland Institute and left-leaning consumer advocacy group Public Citizen. And this year, the report carries new significance. Think of it, said Ryan Alexander, president of Taxpayers for Common Sense, as a "memo to the congressional super-committee."
The groups have identified $380 billion in savings over five years that could come from eliminating subsidies they say are both fiscally and environmentally irresponsible.
"This is a full quarter of the savings the new congressional super-committee has to find, and we do it in less time," Alexander said on an affable conference call that also included, in addition to all these groups, Democratic Rep. Earl Blumenauer of Oregon and former Republican Rep. Robert Inglis of South Carolina. "These are common-sense cuts and should represent really the lowest-hanging budget fruit. Outside of the Beltway, these are things people agree don't make sense."
And if half of Washington can't agree on these cuts when the Heartland Institute and Friends of the Earth can, that's a pretty bad sign.
These targets hold out the intriguing possibility that the country could actually benefit from some well-placed budget cuts — a notion far removed from the idea that every dollar the super-committee comes up with must spell sacrifice for the poor, the elderly or the middle class.
"Cutting spending is not just a way of taking something away," said Eli Lehrer, vice president of the Heartland Institute, "but can improve the lives of people in the country and bring genuine benefits to the environment."
Among the subsidies that could be eliminated, many of which require taxpayers to pay the bill for pollution and assume the risk for failure: royalty-free oil and gas leases in federal waters ($53 billion), the corn ethanol tax credit ($6 billion), loan guarantees for nuclear power plant construction ($18.5 billion) and crop insurance ($30 billion).
The report didn't examine the potential job losses from eliminating any of these programs. But all of the groups insisted the changes would produce a net gain for the economy, in part because removing subsidies for older fossil fuels and technologies would open the door for innovation in new areas.
In the past, the report has had success targeting transportation projects and a credit for SUVs, as well as in prompting some reform of fossil fuel tax credits. Not coincidentally, Ben Schreiber of Friends of the Earth said those successes generally also came during leaner economic times.
The really big-ticket items — oil and gas and agriculture subsidies — have been in the report since its inception. Those subsidies live on anyway, not necessarily because they're smart policy, but because the groups vested in keeping them alive wield considerable influence in Washington.
"You don't get Congress to give you a subsidy if you're some weak, powerless group," Lehrer said. "The people who get the subsidies are often the biggest, most profitable, most powerful people in the economy. There's a direct correlation there."
Schreiber, a climate and energy tax analyst, said the report has always received a positive reception, if not corresponding action.
"The difference this time is that there are stark choices that are going to be made," he said. "We're talking about $600 billion in additional cuts for non-discretionary, non-defense spending on top of the $900 billion that have already been made. We're looking at potential cuts to Medicare, Medicaid, Social Security, or $600 billion in defense cuts. And so when you have those stark choices, there's suddenly a lot more appetite to take on the special-interest lobby."
If nothing else, the Green Scissors collation is setting an example for the kind of partnership of odd bedfellows that's eluded Washington all year.
"We've had plenty of fights with Heartland over many things," Schreiber said after the conference call. "But to be working together is empowering. It provides an opportunity to really see change."