Sharpen the Hatchets

Unless I missed it, President Barack Obama, in his State of the Union address, boasted of $20 billion in cuts that he was able to make in the past year as he went "line by line" through the budget. Elizabeth MacDonald of the Fox Business Channel has done a bit better, identifying as much as $1.5 trillion in cuts that could be made in the federal budget (article here). Granted, much of this is in the form of assets that the federal government owns, but has no use for, but even without that there is upwards of $300 billion in cuts that could be made nearly immediately. Here are some of the highlights:

--Health and Human Services: $55.1 billion, or 9.4%. Includes overpayment rates of 7.8% and 15.4% in the Medicare fee for service and Advantage programs, respectively.

--Labor: $12.3 billion, or 9.9%. Almost all of the overpayments were in the unemployment insurance program.

--Treasury: $12.3 billion, or 25.5%. All of it was attributed to overpayments in the earned income tax credit.

--Social Security Administration: $8 billion, or 1.2%, in overpayments.

--Agriculture: $4.3 billion in overpayments, or 5.9% of total department spending. Much of it was in the food stamp, federal crop insurance and school meals programs.

--Transportation: $1.5 billion, or 3%. Much of it was in the Federal Highway Administration planning and construction program.

--Veterans Affairs: $1.2 billion, or 2.7%. That included overpayments in the pension and other compensation programs.

--Housing and Urban Development: $1 billion, or 3.5%. All attributed to public housing and rental assistance.

--Defense: $849 million, or 0.5%.

--Homeland Security: $644.5 million, or 3.7%. Much of it was in the Homeland Security grant program as well as Disaster Relief Fund Vendor Payments.

--Education: $599 million, or 2.1%.

It is interesting to note that, of the agencies listed that overpayed, the Department of Defense, long lampooned for things such as the $600 toilet seat, was actually, by this metric, the best stewards of our money, both in terms of total dollars ($849 million - behind only Homeland Security and Education) and percent of overpayments (0.5%). The total for all these overpayments is a whopping $98 billion - nearly 5 times the $20 billion the President seemed so proud of.

Another $123.5 billion could be cut from the budget by merely eliminating programs that don't work.

The OMB has something called the Program Assessment Rating Tool. It found 218
government programs that were either inadequate or ineffective virtually
throughout the entire government--programs run by the Departments of
Agriculture, Commerce, Defense, Education, HHS, Homeland Security, HUD,
Interior, Justice, Labor, Transportation, Treasury, the VA, Army Corps of
Engineers, the EPA, the CFTC, EEOC, and the FCC.

Of course, this is the Fox Business channel - FOX for Pet's sake. Of course FOX is going to be able to find programs to cut. According to MacDonald, though, "these are items that government officials say should be cut." The question, then, is why they haven't been cut yet. When government officials say that government should be cut, it goes without saying that it should be cut.

So, that was more than $200 billion in cuts, but it pales in comparison to the $1.2 trillion in unused federal assets. Now, when I first saw that number, I assumed that this was the amount that could be raised if these assets were sold, but apparently this is not the case.

One alarming example of the government’s wasteful holdings is Chicago’s Old Main Post Office, a 2.5 million-square-foot abandoned structure that has been vacant since 1997 and costs $2 million to maintain annually, (the government recently moved to unload it, after spending more than $26 million to maintain it, government sources note).

So, not only do we, the people, own property that we do nothing with, but we pay for the privilege.

Those on the left often pay lip service to the idea of budget cuts, but like to say that what is needed is "a scalpel, not a hatchet." In this case, however, I think it is time for use to break out the hatchets.