Deficit Death by a Thousand Cuts
The U.S. government’s deficit was created piece by billion-dollar piece. The bipartisan debt commission’s suggestions offer specific incremental steps to reverse that process.
Most proposals out of Washington to rein in the deficit have been maddeningly unspecific. Politicians talk about freezing discretionary spending, although exactly what they mean by “discretionary” is often up to interpretation. They trot out “waste, fraud and abuse,” as if there were a few trillion dollars hiding there. Most often, they pitch vague ideas about cutting everything but, of course, the important things, which invariably turn out to be the most expensive.
Within the past week, however, some folks have finally been getting down to real specifics. Not surprisingly, these plans don’t come from currently elected officials skittish about offering painful solutions. A draft strategy to curb the deficit was released last week by the President’s National Commission on Fiscal Responsibility and Reform, and two other reports have since been published by the Peterson-Pew Commission on Budget Reform and the Bipartisan Policy Center’s Debt Reduction Task Force.
Their ideas may never come to pass; writing reports is always easier than acting on them. But just by floating concrete details, these reports spur a valuable national thought exercise: Would you be willing to accept, say, these hard choices, all offered by the President’s commission?
1. Establish co-pays at VA hospitals. The co-chairs of the president’s commission propose increasing the out-of-pocket expenses for some veterans who currently pay no fees for in-patient or out-patient care at VA hospitals, saving $700 million by 2015. The fee would apply to veterans who do not have service-related disabilities.
2. Eliminate Office of Safe & Drug-Free Schools. This cut would save $1.8 billion by 2015. The co-chairs argue that the office hasn’t produced hoped-for results, and, anyway, “While school safety should be protected, violence and drug abuse are problems that occur far less on school grounds than elsewhere.”
3. Eliminate Rural Utilities Service programs. This idea would save $500 million in 2015 by cutting some grants and loan guarantees to rural communities that have public-private partnerships where typical utilities won’t serve them. While the RUS is now trying to expand rural broadband access, some programs — the Local Television Loan Program? — may be outdated.
4. Cut funding to Smithsonian and National Parks. The commission proposes offsetting these cuts ($300 million by 2015) by creating or raising visitor’s fees. About 30 million people visited the 19 Smithsonian museums and National Zoo last year for free. Charging about $7.50 per person — considerably less, the commission points out, than comparable museums — the Smithsonian could have made $225 million off these visitors in 2009.
5. Eliminate funding for Corporation for Public Broadcasting. The government would save $500 million by 2015 by cutting funding for the CPB, currently at its highest level ever. The CPB primarily supports PBS and NPR stations. The president’s commission doesn’t suggest how those organizations should replace the money. More pledge drives?
6. Eliminate private-sector space investment. The president’s future plans for NASA rely heavily on private companies developing space shuttles and flight transportation that the government will eventually purchase from them. The president’s fiscal commission suggests the opposite: scrap the $6 billion NASA is planning to invest in private-sector space development over the next five years.
7. Cut research funding for fossil fuels. This idea would cut off new funding to the Department of Energy’s applied research on fossil fuels, a program the commission argues was created back when the development of such technology was stunted. Now, much of this work is also being duplicated by private companies. The move would save $900 million by 2015 (but note: no one is suggesting that money go instead to research algae or solar cells).
8. Make food-processing facilities pay for their own inspection. A USDA inspector must be on site at all times to test and sample products at meat and poultry slaughterhouses. If the plants had to pay a fee to finance the inspections, the government would save $900 million a year.
9. Acquire less land under the Land and Water Conservation Fund. The fund usually gets between $250 million and $450 million a year to acquire (but not maintain) new land for federal and state land management agencies, “while many argue,” the co-chairs write, “that the federal government and states have difficulty managing the land they already own.” The government would save $300 million a year by halting new land purchases while it deals with its maintenance backlog.
10. Freeze non-combat military pay. By halting pay at 2011 levels for three years, the government could save $9.2 billion by 2015 ($7.6 billion in compensation and $1.6 billion in later retirement payouts). This pay includes housing and subsistence allowances. Similarly freezing the salaries and compensation for civilian DoD workers would save another $5.3 billion.