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Msg  3722 of 3781  at  2/15/2020 11:34:41 AM  by

jerrykrause


Why government canít cut spending

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Why government can’t cut spending

Samuelson, Robert J.The Washington Post (Online), Washington, D.C.: WP Company LLC d/b/a The Washington Post.
 

If the past is any guide — and it certainly will be — President Trump's ambitious attempts to cut federal spending will almost certainly come to naught. The historical record is clear. As a practical matter, once government programs are created, they're virtually impossible to kill, even if they've outlived their usefulness.

Veterans of past budget wars (including me) going back to at least the Reagan administration in the 1980s will recognize many of the same agencies now being proposed for elimination or drastic cutbacks: Amtrak, the Corporation for Public Broadcasting (CPB), the National Endowment for the Arts (NEA) and the Small Business Administration. Their budgets might have been squeezed in the past, but they survived to fight another day.

All federal programs acquire protection from some combination of beneficiaries, lawmakers and bureaucrats. Even if Congress adopted Trump's entire list of recommendations, which also include deep cuts in health programs for the poor and the near-poor, the effect on the budget would be modest. Altogether, Trump's plan would cut $4.4 trillion of spending in the "baseline" budget (essentially, the status quo) over the next decade. This seems a lot — and is. But the amount shrivels compared with total projected spending of about $60 trillion over the decade. Trump's cuts would represent about 7 percent of the total.

The political stalemate is familiar. To simplify slightly, there are two types of programs: First, they're so small that even eliminating them would barely change the budget outlook. Amtrak, the CPB and the NEA are good examples. In 2020, Amtrak's estimated spending is $2 billion, according to Trump's budget. The CPB's is $465 million.

To ordinary people, these are (again) huge amounts. But eliminating them would not perceptibly reduce the federal budget deficits, which are now running at about $1 trillion annually. Meanwhile, politicians who try to organize against Amtrak or public-media subsidies risk antagonizing voters. Why bother? The politics don't compute. Politically, it's all pain and no gain.

So, it's difficult to eliminate small programs, even though the case for doing so is often strong. For example, Amtrak — though subsidized by government — is hardly an essential transportation network. Compared with other forms of transportation, it moves a trivial number of passengers, creates a negligible amount of greenhouse gases and relieves only a tiny amount of traffic congestion.

Similar observations apply to the CPB. In a world overrun with communications networks — the Internet, cable channels — do we really need government to underwrite yet another outlet? If, as seems likely, public-broadcasting audiences are mostly upper-middle class, is government subsidizing the tastes of people who don't need subsidizing?

Eliminating small programs is hard. But eliminating large programs — or dramatically reducing their spending — is even harder. They have millions of beneficiaries, and their purposes are often praiseworthy or essential. When Trump released his budget, it inevitably evoked a strong reaction.

The budget "would increase the ranks of the uninsured, severely cut basic assistance for low-income families and cut an array of other non-defense programs," wrote Paul N. Van de Water in an analysis for the Center on Budget and Policy Priorities, a left-leaning research and advocacy group.

The result is a political deadlock. The immense budget deficits that we're now running are a political, not an economic, phenomenon. There must be symmetry in sacrifice. Because spending can't be cut, taxes can't be raised. Doing nothing is more appealing than any of the other plausible outcomes.

There are two ways in which this paralysis can be broken: consensus — the left and right bargain together, each having decided that allowing the deficits to continue uncontrolled raises too many hazards. Or crisis — events take on a life of their own and force leaders to react.

The election ought to be about these two paths. It probably won't be.

 


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