How to Cut $1 Trillion

Spending cuts that should be supported by the Left and Right.

At least it’s a start. While the Congressional “Super Committee” assigned to find $1.5 trillion in deficit reductions surely may butt heads until its deadline Nov. 23, a non-partisan financial study has recommended reductions of more than $1 trillion with appeal across the political divide.

The U.S. Public Interest Research Group (USPIRG) and the National Taxpayers Union (NPU), although holding widely different views on tax and spending issues, joined to combine their financial know-how to identify programs that both Democrats and Republicans should see as wasteful and inefficient.

Obama has made it even more difficult with his plan to cut more than $3 trillion off the debt. Close to half of the president’s pay-down plan would come from taxes on high–income earners and corporations. Specifically, just those who could help solve the unemployment quagmire. Obama would also cut deductions for charitable giving and mortgage interest deductions for those evil high-income earners.

Obama’s petty hatred of petroleum producers and drug companies called for taking $52 billion from oil and gas producers by changing their accounting rules and snatching some $52 billion from pharmaceutical firms.

Federal workers and retirees, along with veterans, would pay more toward their pensions. Air travelers would pay higher fees, which would raise about $25 billion. Stuck on his view of the villainy of corporate jet owners, Obama would have them pay their “fair share” by charging $100 a flight to bring in $16 billion.

Meanwhile, the NPU and the USPIRG put their fingers on 54 specific reductions in federal spending. They included:

  • $214.9 billion in savings by crossing out wasteful subsidies to agribusiness firms and other corporations.
  • $428.8 billion in savings by ending low-priority and unneeded military programs.
  • $232.3 billion in savings from improvements in government operations.
  • $132.1 billion in savings from reforming major entitlement programs.

Study co-author Andrew Moylan, government affairs vice president of the National Taxpayers Union, said that through the din of partisan rancor, “there is actually a large amount of agreement between watchdog groups, both right and left, about where the waste is in the budget.” Co-author Dan Smith, Tax and Budget expert with USPIRG, said, “These recommendations correct years of inside lobbying that has benefited narrow interests...”

“Each recommendation,” the two organization said in their study, includes a ten-year estimate “backed up by such authoritative sources such as the Congressional Budget Office, Government Accountability Office, Office of Management and Budget, or bipartisan working groups.”

In the first category of spending cuts are: Elimination of the crop insurance program, which “distorts the insurance market...for commodity crops by encouraging overplanting;" elimination of the tax credit for ethanol; ending direct payments for the ten largest commodity crops; reducing fossil energy research and development grants; and reducing biological and environmental research, which should be conducted, instead, with private dollars.

Next: Reduce subsidies for the nuclear power industry -- the nuclear industry itself should fund such production; restructure the Power Marketing Administration to charge market-based rates; eliminate the Hollings Manufacturing Extension Program, which spends millions to subsidize profitable businesses; reduce funding for the Economic Development Administration, which is fraught with inefficiencies; eliminate the Feedstock Flexibility Program, which raises the domestic price of sugar.

Furthermore, we should eliminate: the market loan assistance subsidy program; several programs that provide funding to trade and exports; biomass research and development programs that should be paid for with private money; ultra-deep natural gas and petroleum federal research that should be conducted by private industry; USDA funding for dairy management that business should pay for; and biodiesel fuel education programs that should be run privately.

On the subject of military spending, the study authors said, “[W]e have relied on authoritative recommendations from officials and independent experts from across the political spectrum[.]”

In this area, the study suggested the US should: Implement reforms identified by the bipartisan Congressional Defense Acquisition Reform Panel; adopt former Secretary Robert Gates’s efficiency and streamlining recommendations; cancel the F-35 Joint Strike Fighter and replace it with cheaper alternatives; cancel the Navy/Marines F-35 Strike fighter; reduce spending for other procurement; reduce V-22 Osprey purchases and replace with other helicopters; terminate the Medium Air Defense System to provide a mobile air defense system; use less expensive military repair services at central facilities; cancel the C-27J joint cargo aircraft; and reform ordering and tracking of spare parts and supplies.

Regarding savings from reforms to major entitlement programs, the savings experts recommended:

Better align Medicare payments to teaching hospitals with actual costs; reduce Medicare payments across the board in high-spending areas; reform “Medical Quality Improvement Organizations” to improve efficiency; prevent improper payments for non-covered chiropractic services; and remove the ceiling for collection of overpayments from the Supplemental Security Income program.

As for execution of government programs, these recommendations were listed:

Close up to 800 of the 2,100 federal data centers and take advantage of network-based computing technology; reduce the backlog of 55,500 buildings owned by the federal government that are not used or underutilized; reform airport improvement grants; require DOD and the VA to jointly buy prescriptions drugs to save costs; end wasteful Army Corps of Engineers projects that encourage development in flood-prone areas; reduce by 20 percent the fleet of 662,000 federally-owned or leased cars; eliminate air service programs at facilities serving few passengers and are near major airports; eliminate payments for abandoned mine restoration; end excessive “double-dipping" for reemployed annuitants; reduce funding for timber sales that lose money.

Also: End funding for the National Drug Intelligence Center, which GAO says duplicates drug enforcement; Livestock Protection Program should be ended and paid for with private sources; eliminate funding for Woodrow Wilson International Center for Scholars, which has its own assets of $100 million; do away with the Small Community Air Service Development Program, most of which projects fail; stop Space Flight Awareness Program, which pays for lavish events for private contractors.

With a bit of fortitude, Congress and the administration could have made these same cuts all by themselves.