Taxes & Spending

Seven Rules for Cutting Government Spending

President Bush next week will release his 2006 budget, requesting slightly more than $2.6 trillion in spending. That’s $2,600,000,000,000. If a Democrat proposed a budget this big, Republican fiscal hawks would squawk to the top of the Capitol dome. For fiscal conservatives, the biggest question about Bush’s second term is whether the reckless spending spree this President launched four years ago will continue. To the contrary, the goal of this Congress, which has the largest Republican majorities of any period in my lifetime, should be to reduce government spending in real terms. This is achievable. If Bush and Congress make it their goal, they can still make the President’s tax cuts permanent and cut the budget deficit in half by four years from now (which is what President Bush promised during the campaign). At a recent Heritage Foundation retreat, I spoke to newly elected members of the House and Senate. My topic: “Seven Strategies to Tame the Beast of the Budget.” Among conservatives, the speech received a hearty endorsement. Here is what I said: 1. Adopt a Taxpayer Bill of Rights that caps the rate of federal spending in any year to the growth of inflation plus population growth. Colorado and many other states do this. Why not Uncle Sam? 2. Make corporate welfare cuts a priority. Cato Institute estimates the federal corporate welfare budget to exceed $100 billion a year. Corporate welfare makes businesses wards of the state and has led to massive rip offs of tax dollars. Congress should cut corporate welfare in half, starting by eliminating the Department of Commerce. 3. Require financial audits of every federal agency, and deny spending increases to agencies that fail the audits. The Government Accountability Office reports that agencies lose tens of billions of dollars through waste, fraud, and overpayments. 4. Eliminate all federal spending subsidies to individuals or corporations with an income of more than $1 million. Walter Williams and I have been promoting this idea for years. Even Democrats should like this proposal. 5. Pass programs back to the states. This nation is based on federalism: States are supposed to be laboratories of democracy. The last major turn-back of programs to the states was welfare. It worked. States experimented. Welfare rolls were reduced by more than half. Why not do the same with Medicaid, environmental programs, and transportation projects? 6. Defund the Left. Hundreds of programs fund leftwing activities and advocacy. These include the Legal Services Corp., the National Endowment for the Arts, and AmeriCorps. How can Republicans expect to retain their majorities when they fund the groups trying to undermine their ability to govern? 7. Read the Constitution and enforce it. This is most important of all. The first thing every member of Congress does is swear to uphold the Constitution. Well, Article I, Section 8 enumerates the powers of Congress to spend money. These powers include money for roads, courts, national defense, a postal service, and not much else. The Constitution does not give Congress authority to spend money on schools, urban transit systems or the Dr. Suess Museum. All of these measures together would start a fiscal revolution. One is very much needed. With the cost of Iraq now expected to exceed $180 billion in 2005, obsolete and counterproductive domestic programs must be chopped. President Bush’s guns-and-butter budgets are no longer affordable.

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