Republicans Propose $2.5 Trillion Spending Cuts
The Republican Study Committee has come up with some significant budget cuts.
$2.5 trillion is a lot of money, even by federal government standards.
Dave Weigel reports that Rep. Jim Jordan (R-Ohio)’s Republican Study Committee is introducing something called the Spending Reduction Act. Weigel summarizes the cuts thusly:
The proposal does what Republicans have been talking about for two years — “repeal” of remaining stimulus funds (now $45 billion), privatizing Fannie and Freddie ($30 billion), repealing Medicaid’ FMAP increase ($16.1 billion), and what they estimate at $330 billion in discretionary spending cuts. Highlights of these projected annual savings:
– Cutting the federal workforce by 15 percent through attrition, and do this by allowing only one new federal worker for every two who quit.
– Killing the “fund for Obamacare administrative costs” for $900 million
– Ending Amtrak subsidies for $1.565 billion
– Ending intercity and high speed rail grants for $2.5 billion
– Repealing Davis-Bacon for $1 billion
– Cutting annual general assistance to the District of Columbia by $210 million, and cutting the subsidy for DC’s transit authority by $150 million.Reforms that go after their own perks:
– Cutting the Federal Travel Budget in half, for $7.5 billion
– Cutting the Federal Vehicle Budget by 1/5, for $600 million
– Halve funding for congressional printing – $47 million annual savings
– Ending the death gratuity for members of CongressAnd cuts that get revenge for Juan Williams: $445 million from the Corporation for Public Broadcasting, $167.5 million from the NEA, and $167.5 million from the NEH.
I haven’t studied these cuts, so don’t have any useful analysis of what privatizing Fannie and Freddie, repealing FMAP, or eliminating “Obamacare administrative costs” would mean. For all I know, these could be brilliant or suicidal.
Having grown up in the South, I always thought Amtrack was stupid. Living now in the DC area, where Amtrak is actually a great idea because of the population density and relative compactness of the Boston-New York-Washington corridor, I think it’s merely poorly implemented. (I’ve only taken Amtrak to NYC once and was less than impressed. With the trains, that is. NYC is nice.) Regardless, I’ve come to think of rail as infrastructure to be funded along with roads, rather than something that should be independently profitable. (Our roads don’t “pay for themselves” either.) But it may simply be too late to change America’s habits and accommodate high speed rail given the way we’ve built up.
As to DC subsidies, Congress has to decide whether to treat the District as a creature of the capitol or an independent metropolis with a tiny federal carveout. If the former, then it has to be heavily subsized. If the latter, it has to have the freedom to fund itself via taxes, just like any other city. As much as I despise the idea of a commuter tax — talk about taxation without representation! — it’s the only way DC will be able to meet its needs, since most of the affluent people who work there take their money home to Maryland and Virginia.
The cuts for printing and travel aren’t radical enough. The federal government should be leading the way in going paperless and encouraging telecommuting and teleconferencing.
I’ll refrain from joking about dead congressmen in the interests of taste, especially in light of the Tucson shootings.
I happen to like NPR. But I can’t figure out any reason the masses need to subsidize its affluent audience. So, sure, make this token cut.
Your analysis is lacking in the same way most are. You evaluate the merit by your personal opinion instead of focusing on whether the item is a valid, constitutional expense.
Admittedly, much more would be cut if that was the true measure.
And as a side note, I’d love it if Congress would stop estimating all budget changes with 10 year totals. Damn you, CBO.
@CG: That ship sailed decades ago, I’m afraid. SCOTUS basically says everything is interstate commerce, so therefore it’s constitutional for Congress to spend on anything. (That’s a bit oversimplified. But only a bit.)
Dave has given a complete list of the proposed cuts:
Unless indicated otherwise, the estimate is for annual savings.
John C. Stennis Center subsidy: $430,000
Mohair subsidies: $1 million
Exchange programs for Alaska, native Hawaiians, and their trading partners in Mass: $9 million
Subsidies to UN panel on climate change: $12.5 million
USDA sugar program: $14 million
International Fund for Ireland: $17 million
Woodrow Wilson Center subsidy: $20 million
Heritage Area Grants and Statutory Aid: $24 million
Save America’s Treasures Program: $25 million
Ready to Learn TV program: $27 million
Halving funding for congressional printing: $47 million
Energy Star program: $52 million
US Trade Development Agency: $55 million
National Organic Certification cost-share program: $56.2 million
Technology Innovation Program: $70 million
Appalachian regional commission: $76 million
Subsidy to OECD: $93 million
Beach replenishment: $95 million
Manufacturing Extension Partnership program: $125 million
Subsidy for DC’s WMATA: $150 million
NEA: $167.5 million
NEH: $167.5 million
FreedomCAR and fuel partnership: $200 million
Market Access Program: $200 million
Assistance to District of Columbia: $210 million
Hope VI program: $250 million
Aid to Egypt: $250 million
Economic development administration: $293 million
Title X family planning: $318 million
Legal Services Corporation: $420 million
Corporation for Public Broadcasting subsidy: $445 million
DOE grants for weatherization: $530 million
20% cut to federal vehicle budget: $600 million
Presidential campaign fund: $775 million over 10 years
Federal office space acquisition: $864 million
“Obamacare administrative costs”: $900 million
Collect unpaid taxes from federal employees: $1 billion
Repeal of Davis-Bacon: “More than $1 billion”
Programs under National and Community Services Act: $1.15 billion
Prohibit union activities by federal employees: $1.2 billion
Applied research at DOE: $1.27 billion
Eliminating duplicative education programs: $1.3 billion
USAID: $1.39 billion
Amtrak subsidies: $1.565 billion
Introducing IRS direct deposit: $1.8 billion
New Starts Transit: $2 billion
Intercity and high speed rail grants: $2.5 billion
Community Development Fund: $4.5 billion
Halving federal travel budget: $7.5 billion
Selling off excess federal property: $15 billion
Repealing Medicaid FMAP increase: $16.1 billion
Privatizing Fannie and Freddie: $30 billion
Eliminating the rest of the stimulus: $45 billion
“Privatizing Fannie and Freddie: $30 billion”
This has to be an accounting trick. Freddy and Fannie are huge, and I’ve read that they are the only ones buying mortgage backed securities right now. At the same time, they sit on a huge pile of toxic assets. This only semi-works because of the now implicit government guarantees.
A truly privatized Fannie and Freddie would crash in short order. If you keep the government guarantees, they aren’t privatized. They are only able to make private profit while government holds the risk. That’s what happened last time. That was the reason for all those Fannie and Freddie scandals.
Now, the way to wind down Fannie and Freddie, if we have the guts for it, is just to cut off new loan originations, and new MBS purchases. New loans would go to private banks, and as Fannie and Freddie loans matured or were other retired the organizations would fade away.
The sad thing is, if you do halt new Fannie and Freddie originations, you can probably look at another 30-50% down in the housing market … because no one else will be willing to make a 30 year fixed mortgage, and especially not at such good terms.
BTW, I would wind down Freddie and Fannie. I’d keep them government owned, but I’d tell them to reduce originations by 10% of current levels, each year, for 10 years. At the end of 10 years no new loans and they enter contraction and fade-away phase.
Hmmm…..many of these cuts may be wise, some of them aren’t, some of them are foolish. But there is a lot of stuff missing.
We can cut Amtrak subsidies, but we can’t cut the “faith-based initiative?”
We can prohibit federal employees from union activities, but we can’t review the multi-billion dollar contracts with the contractors that now do many of our federal functions?
This stuff strikes me as just grinding away at the ole hobby horse. A plan for the next ten years? Yeah, if we’re going to spend the next ten years deluding ourselves about the extent of our fiscal problem.
Looks like a pretty good start to me. Moving a mountain starts with the first shovel full and this is more than a shovel full. If there are more cuts you like to see, bring them forth. A review of contracts would be good as well. Another way to cut down the cost of many of those contracts is to greatly reduce the bureaucracy and bogus requirements that go with them. For example the cost of fuel during the Iraq invasion could have greatly been reduce by allowing any decently workable blend of fuel to be used instead of “very” specific ones.
Even if there is a constitutional right to spend money on something it doesn’t mean you have to. I agree that the federal government has abused the “commerce clause” and taken too much power.
Like I said in the other threat, there’s a lot of “penny wise, pound foolish” cuts in here. Cuts that will force the government to spend more money in the long run to save money in the short term.
Stupid, stupid, stupid.
Clearly this is about cutting stuff the GOP does not like from the budget, not getting the budget under control. And Alex is right about the downstream consequences of the cuts possibly costing more than the cuts save.
Gotta spend money to save money? That’s been overused by public agencies intent on bigger budgets. It’s old, it’s tired,and it’s rarely true.
Actually, what gets old is people refuting specifics with platitudes…
Fair enough, James.
I realize talking about budget cuts in Congress is like discussing abstinence in a whore house.
Doesnt mean we can’t at least acknowledge to right and true principles that should be the focus. 🙂
“Your analysis is lacking in the same way most are. You evaluate the merit by your personal opinion instead of focusing on whether the item is a valid, constitutional expense.”
“Your analysis is too subjective. It should be objective, like I have decided mine is.”
They missed the huge savings in bringing troops back from Afghanistan and Iraq … I’m sure that’s just an oversight that they will add in an addendum.
George is right – that is about $5 billion a month in current spending not to mention long term costs. bring them home and we don’t have to cut so many other programs in the short term.
If the plan is to reduce the Federal work force by 15 %, is there a corresponding plan to reduce what the Federal government does, so that it requires fewer workers?